ACTIONS PENDING THE MERGER
4.1 Forbearances of FSB.
From the date hereof and until the Effective Times, except as expressly contemplated or permitted by this Agreement or as Previously
Disclosed, without the prior written consent of BMT, FSB will not, and will cause each of its Subsidiaries not to:
(a) Ordinary Course.
Conduct its business other than in the ordinary and usual course consistent with past practice and in compliance with all laws and prudent
business and banking practices, or fail to use commercially reasonable best efforts to preserve its business organization, keep available
the present services of its employees and preserve for itself and the other parties the goodwill of its customers and others with whom
business relations exist.
(b) Capital Stock. (i) Issue,
sell or otherwise permit to become outstanding, or authorize the issuance of or creation of, any additional shares of stock or any Rights
or permit any shares of stock to become subject to grants of employee or director stock options or other Rights, (ii) adjust, split,
combine or reclassify any capital stock, (iii) enter into any agreement, understanding or arrangement with respect to the sale or
voting of common stock, or (iv) directly or indirectly redeem, purchase or otherwise acquire any shares of capital stock or equity
interests or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or
the occurrence of certain events) into or exchangeable for any shares of capital stock or equity interests.
(c) Dividends. Make,
declare, pay or set aside for payment any dividend on or in respect of, or declare or make any distribution on, any shares of its capital
stock.
(d) Compensation; Employment
Agreements; Etc. Enter into, amend, renew or accelerate the vesting or payment under, any employment, consulting, severance, change
in control, bonus, salary continuation or other similar agreements, arrangements or benefit plans with any current or former director,
officer or employee or grant any salary or wage increase or award any incentive or other bonus payment or increase any employee benefit
(including incentive or bonus payments), except (i) for other changes that are required by applicable law, (ii) to satisfy
contractual obligations existing as of the date hereof as Previously Disclosed, or (iii) normal annual merit salary increases made
in the ordinary course of business consistent in amount and timing with past practices to employees (other than executive officers),
but not exceeding 3.0% for any individual employee or more than 3.0% in the aggregate for all employees (based upon salaries in effect
as of September 30, 2021), and (iv) normal annual 2021 employee performance bonuses for which the expense amounts have already been
accrued and are scheduled to be paid by FSB on or about March 2022.
(e) Hiring. Hire any
person as an employee or promote any employee, except (i) to satisfy contractual obligations existing as of the date hereof as Previously
Disclosed or (ii) to fill any vacancies arising after the date hereof and whose employment is terminable at will and who are not
subject to or eligible for any severance or similar benefits or payments that would become payable as a result of the transactions contemplated
hereby or the consummation thereof.
(f) Benefit Plans. Enter
into, establish, adopt, amend or terminate, or make any contributions to a FSB Benefit Plan, in respect of any current or former director,
officer or employee or take any action to accelerate the vesting or exercisability of any compensation or benefits payable thereunder,
other than actions related to the transactions contemplated by this Agreement, except (i) as may be required by applicable law;
(ii) to satisfy contractual obligations existing as of the date hereof as Previously Disclosed; or (iii) in accordance with annual
renewals consistent with past business practices and as Previously Disclosed.
(g) Dispositions. Sell,
transfer, mortgage, license, encumber or otherwise dispose of or discontinue any of its assets, rights, deposits, business or properties
outside the ordinary course of business in a transaction that (i) individually is greater than $50,000 or (ii) together with
all other such transactions is greater than $100,000; provided, however, no such transactions shall be permitted with any
of its Affiliates.
(h) Acquisitions. Acquire
(other than by way of foreclosures or acquisitions of control in a bona fide fiduciary capacity or in satisfaction of debts previously
contracted in good faith, in each case in the ordinary and usual course of business consistent with past practice), all or any portion
of the assets, business, securities (other than as permitted by Section 4.1(r)), deposits or properties of any other Person, including
by merger or consolidation, purchasing any equity interest in or making any investment in a partnership or joint venture.
(i) Capital Expenditures.
Make any capital expenditures other than capital expenditures in the ordinary course of business consistent with past practice in amounts
not exceeding $25,000 individually or $100,000 in the aggregate.
(j) Governing Documents.
Amend the FSB Articles, FSB Bylaws, or any other governing documents of FSB or any of its Subsidiaries or (except as provided for herein
to adopt the New FSB Articles), enter into a plan of consolidation, merger, share exchange or reorganization with any Person, or a letter
of intent or agreement in principle with respect thereto.
(k) Accounting Methods.
Implement or adopt any change in its accounting principles, practices or methods, other than as may be required by changes in laws or
regulations or GAAP.
(l) Contracts. Terminate,
cancel or request any change in, or agree to any change in, or enter into any contract or agreement that calls for one-time or aggregate
annual payments of $50,000 or more and is not terminable at will or on 30 days or less notice without payment of a premium or penalty;
provided, that, BMT’s consent shall not be unreasonably withheld and such consent shall be deemed granted if FSB does not
receive BMT’s consent thereto (via e-mail, fax or otherwise in writing) within five Business Days after BMT’s receipt of
written notice of FSB’s written request by FSB for such consent.
(m) Claims. Enter into
any settlement or similar agreement with respect to any action, suit, proceeding, order or investigation to which it is or becomes a
party after the date of this Agreement, which settlement, agreement or action involves payment of an amount which exceeds $25,000 in
excess of amounts contributed by insurance and/or would impose any material restriction on its business.
(n) Banking Operations.
Enter into any new line of business; introduce any new products or services; change its lending, investment, underwriting, pricing, servicing,
risk and asset liability management and other material banking and operating policies, except as required by applicable law, regulation
or policies imposed by any Governmental Authority, or the manner in which its investment securities or loan portfolio is classified or
reported; or file any application or enter into any contract with respect to the opening, relocation or closing of, or open, relocate
or close, any branch, office servicing center or other facility.
(o) Marketing. Introduce
any new marketing campaigns or any new sales compensation or incentive programs or arrangements.
(p) Derivatives Contracts.
Enter into any Derivatives Contract.
(q) Indebtedness. Incur
any indebtedness for borrowed money (other than deposits, escrow balances, federal funds purchased, cash management accounts, and FHLB
advances which, in each case, have a maturity of less than one year and are incurred in the ordinary course of business consistent with
past practice); or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other Person,
other than with respect to the collection of checks and other negotiable instruments in the ordinary course of business consistent with
past practice; provided, that, BMT’s consent shall not be unreasonably withheld and such consent shall be deemed granted
if FSB does not receive BMT’s consent thereto (via e-mail, fax or otherwise in writing) within four Business Days after BMT’s
receipt of written notice of FSB’s written request by FSB for such consent.
(r) Investment Securities.
Acquire or otherwise invest in (other than by way of foreclosures or acquisitions in a bona fide fiduciary capacity or in satisfaction
of debts previously contracted in good faith, in each case in the ordinary course of business consistent with past practice) any (i) Equity
Investment, or (ii) debt security other than in the ordinary course of business consistent with past practice.
(s) Loans. Make any loan,
loan commitment, letter of credit or other extension of credit (collectively, “Loans”) or renewal or extension thereof
to any Person which, when aggregated with all outstanding Loans, commitments for Loans or renewals or extensions thereof made to such
Person or any affiliate or immediate family member of such Person, exceeds $3,000,000, without first submitting complete loan package
information, customarily submitted to the FSB Board or the loan committee thereof in connection with obtaining approval of such action,
to BMT’s chief executive officer for review at least two full Business Days prior to taking such action; provided, that,
if BMT reasonably objects (via e-mail, fax or otherwise in writing) to such Loan or renewal or extension prior to the end of that second
Business Day, then FSB shall not make such Loan or renewal or extension thereof, except that FSB may extend the term of any existing
Loan for a period of up to ninety days on terms that are identical or more favorable to FSB (as compared to the terms in effect on the
date hereof) without compliance with the foregoing restrictions.
(t) Loan Modifications.
Make any modification to any outstanding Loan to any Person, which exceeds $3,000,000, without first submitting complete loan package
information, customarily submitted to the FSB Board or its loan committee in connection with obtaining approval of such action, to the
chief executive officer of BMT for review at least two full Business Days prior to taking such action and if BMT reasonably objects (via
e-mail, by fax or otherwise in writing) to such modification prior to the end of that second Business Day, then FSB shall not make such
modification.
(u) Investments in Real
Estate. Make any investment or commitment to invest in real estate or in any real estate development project (other than by way of
foreclosure or acquisitions in a bona fide fiduciary capacity or in satisfaction of a debt previously contracted in good faith, in each
case in the ordinary course of business consistent with past practice).
(v) Adverse Actions.
Take or fail to take any action: (i) that is intended or may reasonably be expected to result in (A) any of its representations
and warranties set forth in this Agreement being or becoming untrue in any material respect at any time at or prior to the Effective
Times or (B) any of the conditions to the transactions contemplated hereby set forth in this Agreement not being satisfied, or (ii) which
would reasonably be expected to materially and adversely impair or delay consummation of the transactions contemplated hereby beyond
the time period contemplated by this Agreement.
(w) Payments. Accelerate
the payment of any material liabilities or obligations (absolute, accrued, contingent or otherwise), except in the ordinary course of
business consistent with past practice; provided, that, BMT’s consent shall not be unreasonably withheld and which consent
shall be deemed granted if BMT has not provided FSB (via e-mail, fax or by other means) a written objection to such action within five
Business Days after BMT’s receipt of a written request by FSB for such consent.
(x) Taxes. Make or change
any material Tax election or method of Tax accounting, settle, compromise or otherwise finally resolve any material Tax liability, or
file any amended Tax Return with respect to a material amount of Taxes up to and including the Closing Date.
(y) Antitakeover Statutes.
Take any action (i) that would cause this Agreement or the transactions contemplated hereby to be subject to the provisions of any
state antitakeover law or state or territorial law that purports to limit or restrict business combinations or the ability to acquire
or vote shares, or (ii) to exempt or make not subject to the provisions of any state antitakeover law or state law that purports to limit
or restrict business combinations or the ability to acquire or vote shares, any Person or any action taken thereby, which Person or action
would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom.
(z) Affiliate Transactions.
Enter into any transaction, commitment, arrangement or other activity with a related entity, Affiliate or Subsidiary, except for transactions
that are in the ordinary course of business consistent with past practice.
(aa) Interest on Deposits.
Increase the rate of interest paid on interest-bearing deposits or on certificates of deposit, except in a manner and pursuant to policies
consistent with past practices and otherwise consistent with general economic and competitive conditions in such party’s market
area.
(bb) Commitments. Enter
into any contract with respect to, or otherwise agree, authorize or commit to take, or publicly recommend, propose or announce an intention
to take, any of the foregoing actions.
4.2 Forbearances of BMT.
From the date hereof and until the Effective Times, except as expressly contemplated or permitted by this Agreement or as Previously
Disclosed, without the prior written consent of FSB, BMT will not, and will cause each of its Subsidiaries not to:
(a) Ordinary Course.
Conduct its business other than in compliance with all materials law and prudent business practices, or fail to use commercially reasonable
best efforts to preserve its business organization, and preserve for itself and the other parties the goodwill of its customers and others
with whom business relations exist.
(b) Adverse Actions.
Take or fail to take any action: (i) that is intended or may reasonably be expected to result in (A) any of its representations
and warranties set forth in this Agreement being or becoming untrue in any material respect at any time at or prior to the Effective
Times or (B) any of the conditions to the transactions contemplated hereby set forth in this Agreement not being satisfied, or (ii) which
would reasonably be expected to materially and adversely impair or delay consummation of the transactions contemplated hereby beyond
the time period contemplated by this Agreement.
(c) Commitments. Enter
into any contract with respect to, or otherwise agree, authorize or commit to take, or publicly recommend, propose or announce an intention
to take, any of the foregoing actions.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Disclosure Schedules.
On or prior to the date hereof, FSB has delivered to BMT, and BMT has delivered to FSB, a confidential schedule (the “Disclosure
Schedule”) setting forth, among other things, items the disclosure of which is necessary or appropriate either in response
to an express disclosure requirement contained in a provision hereof or as an exception to one or more representations or warranties
contained in Article V or to one or more of its covenants contained in Article IV or Article VI. Any information
set forth in any one section of a party’s Disclosure Schedule shall be deemed to apply to each other applicable section or subsection
of that party’s Disclosure Schedule if its relevance to the information called for in such section or subsection is reasonably
apparent on its face notwithstanding the omission of any cross-reference to such other section.
5.2 Representations and
Warranties of FSB. FSB hereby represents and warrants to BMT that, except as Previously Disclosed:
(a) Organization, Standing
and Authority. FSB is a corporation duly organized, validly existing and in good standing under the laws of the State of Washington.
FSB is duly authorized by the WDFI to conduct business as a commercial bank under the laws of state of Washington. Each other Subsidiary
of FSB is a corporation, limited liability company or other entity duly organized, validly existing and in good standing under the Laws
of the jurisdiction of its organization. FSB and each of its Subsidiaries is licensed or qualified to do business and is in good standing
in each jurisdiction where its ownership or leasing of property or assets or the conduct of its business requires it to be so licensed
or qualified, except where the failure to be so licensed or qualified would not have nor reasonably be expected to have a Material Adverse
Effect on FSB. FSB and each of its Subsidiaries has in effect all federal, state, local and foreign governmental authorizations necessary
for it to own or lease its properties and assets and to carry on its business as now conducted, except where the failure to be so authorized
would not materially impair the ability of FSB to perform its obligations under this Agreement or otherwise materially impede consummation
of the transactions contemplated hereby. The deposit accounts of FSB are insured by the FDIC, in the manner and to the maximum extent
provided by applicable law, and FSB has paid all deposit insurance premiums and assessments required by applicable laws and regulations.
The copies of the FSB Articles, FSB Bylaws and the other governing documents of FSB and its Subsidiaries which have been previously made
available to BMT are true, complete and correct copies of such documents as in effect on the date of this Agreement. The minute books
of FSB and its Subsidiaries contain true, complete and correct records in all material respects of all meetings and other corporate actions
held or taken by their respective boards of directors (including committees of their respective boards of directors), as well as the
shareholders of FSB and its Subsidiaries through the date hereof.
(b) Capital Structure.
(i) The authorized capital
stock of FSB consists of (A) 3,250,000 shares of FSB Common Stock, of which 3,154,568 are issued and outstanding, and (B) zero shares
of preferred stock, of which none are issued and outstanding. FSB does not have any other shares of capital stock authorized, designated,
issued or outstanding. All outstanding shares of FSB’s capital stock (1) have been duly authorized and validly issued and
are fully paid, non-assessable and not subject to preemptive rights or similar rights created by statute, the FSB Articles, the FSB Bylaws
or any agreement to which FSB is a party, and (2) have been offered, sold, issued and delivered by FSB in all material respects
in compliance with all applicable laws. There are no declared or accrued but unpaid dividends with respect to any shares of FSB capital
stock. The shares of FSB Common Stock to be issued pursuant to the Merger will be duly authorized and validly issued and, at the Effective
Times, all such shares will be fully paid, nonassessable and free of preemptive rights.
(ii) Other than the FSB Equity
Plan, FSB has never adopted, sponsored or maintained any stock option or equity incentive plan or any other plan or agreement providing
for equity compensation to any Person.
(iii) There are 95,000 FSB
Options issued and outstanding. Schedule 5.2(b)(iii) lists, for each FSB Option outstanding under the FSB Equity Plans, the registered
holder, the exercise price, the number of shares underlying such option, the vesting schedule and number of options vested, the grant
date, the exercise date and whether such option qualifies as an incentive stock option under the Code. Other than such options, there
are no Rights or agreements obligating FSB to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased
or redeemed, any FSB capital stock or any capital stock or equity or other ownership interest of FSB or obligating FSB to grant, extend,
accelerate the vesting of, change the price of, otherwise amend or enter into any such Right, whether issued under the FSB Equity Plan
or otherwise. There are no outstanding or authorized stock appreciation, phantom stock, profit participation, or other similar rights
with respect to FSB.
(iv) Except for the Support
Agreements, there are no (A) voting trusts, proxies, or other agreements or understandings with respect to the voting stock of FSB
to which FSB is a party, by which FSB is bound, or of which FSB has knowledge, or (B) agreements or understandings to which FSB
is a party, by which FSB is bound, or of which FSB has knowledge relating to the registration, sale or transfer (including agreements
relating to rights of first refusal, “co-sale” rights or “drag-along” rights) of any FSB capital stock.
(c) Subsidiaries. FSB
owns all of the issued and outstanding shares of, free and clear of all Liens. Schedule 5.2(c) of the Disclosure Schedule sets
forth each of FSB’s Subsidiaries, and the ownership interest of FSB in each such Subsidiary, as well as the ownership interest
of any other Person or Persons in each such Subsidiary. The outstanding shares of capital stock of each Subsidiary of FSB have been duly
authorized and are validly issued, fully paid and nonassessable, and are not subject to preemptive rights (and were not issued in violation
of any preemptive rights). There are no shares of capital stock of any Subsidiary of FSB authorized and reserved for issuance, no such
Subsidiary has any other Rights issued or outstanding with respect to such capital stock, and no such Subsidiary has any commitment to
authorize, issue or sell any such capital stock or Rights. Other than the Subsidiaries of FSB, FSB does not, directly or indirectly,
beneficially own any equity securities or similar interests of any Person or any interests of any Person or any interest in a partnership
or joint venture of any kind.
(d) Corporate Power.
Each of FSB and its Subsidiaries has the corporate power and authority to carry on its business as it is now being conducted and to own
all its properties and assets; and FSB has the corporate power and authority to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby, in each case, subject to receipt of all necessary approvals of Governmental
Authorities.
(e) Corporate Authority.
(i) This Agreement and the
transactions contemplated hereby have been authorized and approved by all necessary corporate action of FSB and its Subsidiaries on or
prior to the date hereof and will remain in full force and effect through the Closing. No other corporate or shareholder action, other
than receipt of the Requisite FSB Vote, is necessary or required to authorize and approve this Agreement or the transactions contemplated
hereby. FSB has duly executed and delivered this Agreement and, assuming due authorization, execution and delivery by BMT, this Agreement
is a valid and legally binding obligation of FSB, enforceable in accordance with its terms (except as enforceability 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).
(ii) The FSB Board, by a
unanimous vote thereof, has adopted resolutions (A) determining that this Agreement and the transactions contemplated herein, including
the Merger and the adoption of the New FSB Articles, are fair to, and in the best interests of, FSB and its shareholders, (B) approving
and declaring advisable this Agreement and the transactions contemplated hereby, including the Merger and the adoption of the New FSB
Articles and (C) recommending that FSB’s shareholders approve and adopt this Agreement and the New FSB Articles.
(f) Approvals. No consents
or approvals of, or waivers by, or notices to, or filings or registrations with, any Governmental Authority or with any third party are
required to be made or obtained by FSB or any of its Subsidiaries in connection with the execution, delivery or performance by FSB or
BMT Merger Sub of this Agreement or to consummate the transactions contemplated hereby, except for (i) filings of applications or
notices with, and approvals or waivers by, the FDIC, the WDFI and under the HSR Act, as required, (ii) filings with the SEC and
state securities authorities, as applicable, in connection with the solicitation of the Requisite BMT Vote, (iii) the registration
of FSB Common Stock with the FDIC under the Exchange Act, (iv) applications for the listing of FSB Common Stock and Assumed Warrants
on the Selected Exchange, (v) the filing of the BMT Certificate of Merger with the Secretary of State of the State of Delaware pursuant
to the DGCL, (vi) the filing of the FSB Certificate of Merger with the WDFI and the Secretary of State of the State of Washington pursuant
to the WBCA and the WCBA and (vii) the Requisite FSB Vote and (viii) the Requisite BMT Vote.
(g) No Conflict.
The execution and delivery by FSB of this Agreement and the consummation of the transactions provided for in this Agreement
(i) do not violate any provision of the FSB Articles, the FSB Bylaws, any provision of applicable federal or state law or any
governmental rule or regulation (assuming receipt of the required approval of any Governmental Authority and receipt of the
Requisite FSB Vote), and (ii) except as set forth in Schedule 5.2(g) of the Disclosure Schedule, do not require any
consent of any Person under, conflict with or result in a breach of, or accelerate the performance required by any of the terms of,
any material debt instrument, lease, license, covenant, agreement or understanding to which FSB or any of its Subsidiaries is a
party or by which any of them is bound, or any order, ruling, decree, judgment, arbitration award or stipulation to which FSB or any
of its Subsidiaries is subject, or constitute a default thereunder or result in the creation of any lien, claim, security interest,
encumbrance, charge, restriction or right of any third party of any kind whatsoever upon any of the properties or assets of FSB or
any of its Subsidiaries.
(h) FDIC Reports. FSB
has previously delivered or made available to BMT accurate and complete copies of the regulatory reports filed with the FDIC and WDFI
(the “FDIC Reports”) as of and for the years ended December 31, 2020, 2019 and 2018, which include the FSB financial
statements referenced in Section 5.2(i) below.
(i) Financial Statements;
Material Adverse Effect.
(i) FSB has previously delivered
or made available to BMT accurate and complete copies of the FSB Financial Statements. The FSB Financial Statements as of and for the
years ended December 31, 2020, 2019 and 2018 are accompanied by the audit reports of Moss Adams, LLP. The FSB Financial Statements
fairly present or, with respect to those as of any date or for any period ending after the date of this Agreement, will fairly present,
the financial condition of FSB as of the respective dates set forth therein, and the consolidated results of operations, changes in shareholders’
equity and cash flows (if applicable) of FSB for the respective periods or as of the respective dates set forth therein.
(ii) The FSB Financial Statements
have been or will be, as the case may be, prepared in accordance with GAAP consistently applied during the periods involved, except as
stated therein. The audits of FSB have been conducted in accordance with generally accepted auditing standards of the United States of
America.
(iii) Except as Previously
Disclosed, since January 1, 2021, FSB has not incurred any liability other than in the ordinary course of business consistent with
past practice.
(iv) Except as Previously
Disclosed, since January 1, 2021, (A) FSB has conducted its business in the ordinary and usual course consistent with past
practice, (B) FSB has not taken nor permitted or entered into any contract with respect to, or otherwise agreed or committed to
do or take, any of the actions set forth in Section 4.1 hereof, and (C) no event has occurred or circumstance arisen that,
individually or taken together with all other facts, circumstances and events (described in any paragraph of this Section 5.2
or otherwise), has had or is reasonably likely to have a Material Adverse Effect with respect to FSB.
(j) Legal Proceedings.
Except as Previously Disclosed, no litigation, arbitration, claim or other proceeding before any court or governmental agency is pending
against FSB or any of its Subsidiaries, individually or in the aggregate, that has had or could reasonably be expected to have a Material
Adverse Effect with respect to FSB, and, to the knowledge of FSB, no such litigation, arbitration, claim or other proceeding has been
threatened and there are no facts which could reasonably give rise to such litigation, arbitration, claim or other proceeding. Neither
FSB nor any of its Subsidiaries nor any of their respective properties is a party to or subject to any order, judgment, decree or regulatory
restriction that, individually or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect with respect
to FSB.
(k) Regulatory Matters.
(i) FSB and its Subsidiaries
have duly filed with the appropriate Governmental Authorities in substantially the correct form the monthly, quarterly and annual reports
required to be filed by them under applicable laws and regulations, and such reports were in all material respects complete and accurate
and in compliance with the requirements of applicable laws and regulations, and FSB has previously delivered or made available to BMT
accurate and complete copies of all such reports. Except as Previously Disclosed, in connection with the most recent examination of FSB
and its Subsidiaries by the appropriate Governmental Authorities, neither FSB nor any of its Subsidiaries was required to correct or
change any action, procedure or proceeding which FSB believes in good faith has not been now corrected or changed, other than corrections
or changes which, if not made, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect
on FSB.
(ii) None of FSB nor any
of its Subsidiaries nor any of their respective properties is a party to or is subject to any order, decree, directive, agreement, memorandum
of understanding or similar arrangement with, or a commitment letter or similar submission to, or extraordinary supervisory letter from,
nor has FSB or any of its Subsidiaries adopted any policies, procedures or board resolutions at the request or suggestion of, any Governmental
Authority. FSB and its Subsidiaries have paid all assessments made or imposed by any Governmental Authority.
(iii) Except as Previously
Disclosed, no Governmental Authority has initiated since January 1, 2019 or has pending any proceeding, enforcement action or, to
the knowledge of FSB, investigation or inquiry into the business, operations, policies, practices or disclosures of FSB or any of its
Subsidiaries (other than normal examinations conducted by a Governmental Authority in the ordinary course of the business of FSB and
its Subsidiaries), or, to the knowledge of FSB, threatened any of the foregoing.
(iv) The most recent regulatory
rating given to FSB as to compliance with the Community Reinvestment Act is “Satisfactory” or better. Since the last regulatory
examination of FSB with respect to Community Reinvestment Act compliance, FSB has not received any complaints as to Community Reinvestment
Act compliance, and no proceedings are pending, nor to the knowledge of FSB, threatened with respect to any violations of consumer fair lending laws or regulations.
(l) Compliance With Laws.
Each of FSB and its Subsidiaries:
(i) is and at all times since
January 1, 2019 has been in material compliance with all applicable federal, state, local and foreign statutes, laws, codes, regulations,
ordinances, rules, judgments, injunctions, orders, decrees or policies and/or guidelines of any Governmental Authority applicable thereto
or to the employees conducting such businesses, including, without limitation, Sections 23A and 23B of the Federal Reserve Act and regulations
pursuant thereto, the Equal Credit Opportunity Act, the Fair Housing Act, the Community Reinvestment Act, the Home Mortgage Disclosure
Act, the Bank Secrecy Act, the USA PATRIOT Act, all other applicable fair lending laws and other laws relating to discriminatory business
practices;
(ii) has and at all times
since January 1, 2019 has had all permits, licenses, franchises, authorizations, orders and approvals of, and has made all filings,
applications and registrations with, all Governmental Authorities (and has paid all fees and assessments due and payable in connection
therewith) that are required in order to permit it to own or lease its properties and to conduct its business as presently conducted;
and all such permits, licenses, franchises, certificates of authority, orders and approvals are in full force and effect and, to the
knowledge of FSB, no suspension or cancellation of any of them is pending or threatened;
(iii) has received, since
January 1, 2019, no notification or communication from any Governmental Authority (A) asserting that FSB or any of its Subsidiaries
is not in compliance with any of the statutes, regulations or ordinances which such Governmental Authority enforces and which have not
been corrected or (B) threatening to revoke any license, franchise, permit or governmental authorization (nor, to the knowledge
of FSB, do any grounds for any of the foregoing exist); and
(iv) has devised and maintains
a system of internal accounting controls sufficient to provide reasonable assurances regarding the reliability of financial reporting
and the preparation of its financial statements, (A) has designed disclosure controls and procedures to ensure that material information
is made known to its management on no less than a quarterly basis, and (B) has disclosed, based on its most recent evaluation prior
to the date hereof, to its auditors (1) any significant deficiencies in the design or operation of internal controls which could
adversely affect in any material respect its ability to record, process, summarize and report financial data and have identified for
its auditors any material weaknesses in internal controls and (2) any fraud, whether or not material, that involves management or
other employees who have a significant role in its internal controls.
(m) Material Contracts;
Defaults.
(i) Except as Previously
Disclosed, neither FSB nor any of its Subsidiaries is a party to, bound by or subject to any agreement, contract, arrangement, commitment
or understanding (whether written or oral) (A) with respect to the employment of any of its directors, officers, employees or consultants,
(B) which would entitle any present or former director, officer, employee or agent of FSB or any of its Subsidiaries to indemnification
from FSB or any of its Subsidiaries, (C) which is an agreement (including data processing, software programming, consulting and
licensing contracts) not terminable on 60 days or less notice and involving the payment or value of more than $50,000 per annum, (D) which
is with or to a labor union or guild (including any collective bargaining agreement), (E) which relates to the incurrence of indebtedness
(other than deposit liabilities, advances and loans from the FHLB and the Federal Reserve, and sales of securities subject to repurchase,
or similar obligation, in each case, in the ordinary course of business), (F) which grants any Person a right of first refusal,
right of first offer or similar right with respect to any material properties, rights, assets or business of FSB or any of its Subsidiaries,
(G) which involves the purchase or sale of assets with a purchase price of $50,000 or more in any single case or $100,000 in all
such cases, other than purchases and sales of investment securities and loans in the ordinary course of business consistent with past
practice, (H) which is a consulting agreement, license or service contract (including data processing, software programming and
licensing contracts and outsourcing contracts) which involves the payment of $50,000 or more in annual fees, (I) which provides
for the payment by FSB or any of its Subsidiaries of payments upon a change of control thereof, (J) which is a lease for any real
or material personal property owned or presently used by FSB or any of its Subsidiaries, (K) which materially restricts the conduct
of any business by FSB or any of its Subsidiaries or limits the freedom of FSB or any of its Subsidiaries to engage in any line of business
in any geographic area (or would so restrict FSB or any of its Subsidiaries after consummation of the transactions contemplated hereby)
or which requires exclusive referrals of business or requires FSB or any of its Subsidiaries to offer specified products or services
to their customers or depositors on a priority or exclusive basis, (L) which relates to a partnership or joint venture or similar arrangement,
(M) which relates to the settlement or other resolution of any legal proceeding in an amount in excess of $50,000 and that has any continuing
obligations, liabilities or restrictions, (N) which is with respect to, or otherwise commits FSB or any of its Subsidiaries to do,
any of the foregoing, or (O) which is a material contract (as defined in Item 601(b)(10) of Regulation S-K of the SEC) (all of the
foregoing collectively, “Material Contracts”).
(ii) Each Material Contract
is valid and binding on FSB or its Subsidiaries and is in full force and effect (other than due to the ordinary expiration thereof) and,
to the knowledge of FSB or its Subsidiaries, is valid and binding on the other parties thereto. None of FSB and its Subsidiaries or,
to the knowledge of FSB and its Subsidiaries, any other parties thereto, is in material default under any Material Contract and there
has not occurred any event that, with the lapse of time or the giving of notice or both, would constitute such a default. Except as provided
in this Agreement, no power of attorney or similar authorization given directly or indirectly by FSB or any of its Subsidiaries is currently
outstanding.
(iii)
All outstanding loans from FSB or any of its Subsidiaries to their respective officers and directors have been Previously Disclosed,
and except as Previously Disclosed, there has been no default on, or forgiveness or waiver of, in whole or in part, any such loan during
the two years immediately preceding the date hereof.
(n) No Brokers. Other
than FSB’s engagement of Keefe, Bruyette & Woods, Inc., no action has been taken by FSB that would give rise to any valid claim
against any party hereto for a brokerage commission, finder’s fee or other like payment with respect to the transactions contemplated
hereby.
(o) Employee Benefit Plans.
(i) Schedule
5.2(o)(i) lists all benefit and compensation plans, contracts, policies or arrangements that are maintained, sponsored, or
contributed to by FSB or any of its Subsidiaries or with respect to which FSB or any of its Subsidiaries has or may have any
liability, including, but not limited to, “employee benefit plans” within the meaning of Section 3(3) of ERISA, and
severance, employment, change in control, fringe benefit, deferred compensation, stock option, stock purchase, stock appreciation
rights, stock based, incentive and bonus plans, agreements, programs, policies or other arrangements (each, a “FSB Benefit
Plan”, and collectively, the “FSB Benefit Plans”). FSB has previously made available to BMT true and
complete copies of (A) all FSB Benefit Plans including, but not limited to, any trust instruments and insurance contracts
forming a part of any FSB Benefit Plans and all amendments thereto; (B) the most recent annual report (Form 5500), together
with all schedules, as required, filed with the Internal Revenue Service (“IRS”) or Department of Labor (the
“DOL”), as applicable, and any financial statements and opinions required by Sections 103(a)(3) and 103(e) of
ERISA with respect to each FSB Benefit Plan; (C) for each FSB Benefit Plan which is a “top-hat” plan, a copy of
filings with the DOL; (D) the most recent determination letter issued by the IRS (or, in the case of a FSB Benefit Plan
maintained pursuant to the adoption of a prototype or volume submitter document a copy of an opinion or notification letter issued
by the IRS to the sponsor of the prototype or volume submitter document upon which FSB is entitled to rely stating that the form of
the prototype or volume submitter plan document is acceptable for the establishment of a qualified retirement plan), for each FSB
Benefit Plan that is intended to be “qualified” under Section 401(a) of the Code; (E) the most recent summary plan
description and any summary of material modifications, as required, for each FSB Benefit Plan; (F) the most recent actuarial
report, if any relating to each FSB Benefit Plan; (G) the most recent actuarial valuation, study or estimate of any retiree
medical and life insurance benefits plan or supplemental retirement benefits plan; and (H) the most recent summary annual
report for each FSB Benefit Plan required to provide summary annual reports by Section 104 of ERISA. Schedule 5.2(o)(i) sets
forth for each FSB Benefit Plan, (1) a brief summary of the FSB Benefit Plan, (2) each participant in the FSB Benefit Plan, and (3)
the amounts paid or to be paid, or accrued or to be accrued by FSB in connection with this Agreement and the transactions
contemplated herein under each FSB Benefit Plan.
(ii) Each FSB Benefit Plan
has been established and administered to date in all material respects in accordance with the applicable provisions of ERISA, the Code
and applicable law and with the terms and provisions of all documents, contracts or agreements pursuant to which such FSB Benefit Plan
is maintained. Each FSB Benefit Plan that is intended to qualify under Section 401(a) of the Code is the subject of a favorable determination
or opinion letter issued by the IRS as to its tax-qualified status (or is maintained on an IRS-approved prototype or volume submitter
document), and no event has occurred since the date of issuance of such letter that would reasonably be expected to jeopardize the tax-qualified
status of such plan. There is no material pending or, to FSB’s knowledge, threatened litigation relating to the FSB Benefit Plans.
Neither FSB nor any of its Subsidiaries has engaged in a transaction with respect to any FSB Benefit Plan or Pension Plan that could
subject it to a tax or penalty imposed by either Section 4975 of the Code or Section 502(i) of ERISA in an amount which would
be material. There are no audits, investigations, or examinations pending before the IRS, DOL or other governmental agency with respect
to any FSB Benefit Plan.
(iii) Neither FSB nor any
of its Affiliates maintains, sponsors or contributes to any (A) “defined benefit plan” (as defined in Section 3(35) of ERISA),
(B) “pension plan” (as defined in Section 3(2) of ERISA that is subject to Title IV of ERISA or Sections 412 or 430
of the Code, or (iii) “multiemployer plan” (as defined in Section 3(37) of ERISA.
(iv) All contributions required
to be made under the terms of any FSB Benefit Plan have been timely made.
(v) Neither FSB nor any of
its Subsidiaries has any obligations for retiree health and life benefits under any FSB Benefit Plan, other than coverage as may be required
under Section 4980B of the Code or Part 6 of Subtitle B of Title I of ERISA, or under the continuation of coverage provisions of the
laws of any state or locality. FSB and its Subsidiaries may amend or terminate any such FSB Benefit Plan in accordance with and to the
extent permitted by their terms at any time without incurring any liability thereunder. No event or condition exists with respect to
a FSB Benefit Plan that could subject FSB or its Subsidiaries to a material tax under Section 4980B of the Code.
(vi) Except as Previously
Disclosed, neither the execution of this Agreement nor consummation of the transactions contemplated hereby, either alone or in connection
with a subsequent event, (A) entitle any employees or any current or former director or independent contractor of FSB or any of
its Subsidiaries to severance pay or any increase in severance pay upon any termination of employment after the date hereof, (B) accelerate
the time of payment or vesting or trigger any payment or funding (through a grantor trust or otherwise) of compensation or benefits under,
increase the amount payable or trigger any other material obligation pursuant to, any of the FSB Benefit Plans, (C) result in any
breach or violation of, or a default under, any of the FSB Benefit Plans, (D) result in any payment that would be a “parachute
payment” to a “disqualified individual” as those terms are defined in Section 280G of the Code, without regard to whether
such payment is reasonable compensation for personal services performed or to be performed in the future, or (E) result in any payment
or portion of any payment that would not be deductible by FSB under Section 162(m) of the Code when paid.
(vii) All
required reports and descriptions (including but not limited to Form 5500 annual reports and required attachments, Forms 1099-R, summary
annual reports, Forms PBGC-1 and summary plan descriptions) have been filed or distributed appropriately with respect to each FSB Benefit
Plan. All required tax filings with respect to each FSB Benefit Plan have been made, and any taxes due in connection with such filings
have been paid.
(viii) No FSB Benefit Plan
is or has been funded by, associated with, or related to a “voluntary employee’s beneficiary association” within the
meaning of Section 501(c)(9) of the Code, a “welfare benefit fund” within the meaning of Section 419 of the Code, a
“qualified asset account” within the meaning of Section 419A of the Code or a “multiple employer welfare arrangement”
within the meaning of Section 3(40) of ERISA.
(ix) Each FSB Benefit Plan
which is a “nonqualified deferred compensation plan” (within the meaning of Section 409A of the Code) has been operated in
compliance with Section 409A of the Code and the guidance issued by the IRS with respect to such plans.
(p) Labor Matters. FSB
and its Subsidiaries are not a party to or bound by any collective bargaining agreement, contract or other agreement or understanding
with a labor union or labor organization, nor is FSB or its Subsidiaries the subject of a proceeding asserting that it has committed
an unfair labor practice (within the meaning of the National Labor Relations Act) or seeking to compel FSB or its Subsidiaries to bargain
with any labor organization as to wages or conditions of employment, nor is there any strike or other labor dispute involving it pending
or, to FSB’s or its Subsidiaries’ knowledge, threatened, nor is FSB or its Subsidiaries aware of any activity involving FSB’s
or its Subsidiaries’ employees seeking to certify a collective bargaining unit or engaging in other organizational activity. FSB
and its Subsidiaries have paid in full all wages, salaries, commissions, bonuses, benefits and other compensation due to its employees
or otherwise arising under any policy, practice, agreement, plan, program, statute or other law. To the knowledge of FSB, no employee
of FSB or any of its Subsidiaries is, in any material respect, in violation of any term of any employment contract, non-disclosure agreement,
non-competition agreement, or any restrictive covenant to a former employer relating to the right of any such employee to be employed
by FSB or any of its Subsidiaries because of the nature of the business conducted or presently proposed to be conducted by it or to the
use of trade secrets or proprietary information of others.
(q) Environmental Matters.
There are no legal, administrative, arbitral or other proceedings, claims, actions, causes of action, private environmental investigations,
remediation activities or governmental investigations of any nature seeking to impose on FSB or any of its Subsidiaries any liability
or obligation arising under any Environmental Laws pending or, to the knowledge of FSB, threatened against FSB or its Subsidiaries, which
liability or obligation could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on FSB. Except
as Previously Disclosed, to the knowledge of FSB, there is no reasonable basis for any such proceeding, claim, action, environmental
remediation or investigation that could impose any liability or obligation that could reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect on FSB. FSB and its Subsidiaries are in compliance in all material respects with applicable
Environmental Laws. Except as Previously Disclosed, to FSB’s knowledge, no real property (including buildings or other structures)
currently or formerly owned or operated by FSB or its Subsidiaries, or any property in which FSB or its Subsidiaries has held a security
interest, Lien or a fiduciary or management role (“FSB Loan Property”), has been contaminated with, or has had any
release of, any Hazardous Substance that has resulted, or could reasonably be expected to result, in a Material Adverse Effect with respect
to FSB. Neither FSB nor any of its Subsidiaries could reasonably be deemed the owner or operator of, nor has it participated in the management
regarding Hazardous Substances of, any FSB Loan Property or any property of FSB or its Subsidiaries which has been contaminated with,
or has had any release of, any Hazardous Substance that has resulted, or could reasonably be expected to result, in a Material Adverse
Effect with respect to FSB. Neither FSB nor any of its Subsidiaries has any liability for any Hazardous Substance disposal or contamination
on any third party property. Neither FSB nor any of its Subsidiaries nor, to FSB’s knowledge, any Person whose liability FSB or
any of its Subsidiaries has assumed whether contractually or by operation of law, has received any notice, demand letter, claim or request
for information alleging any material violation of, or material liability under, any Environmental Law. FSB and its Subsidiaries are
not subject to any order, decree, injunction or other agreement with any Governmental Authority or any third party relating to any Environmental
Law. To FSB’s knowledge, there are no circumstances or conditions (including the presence of asbestos, underground storage tanks,
lead products, polychlorinated biphenyls, prior manufacturing operations, dry-cleaning, or automotive services) involving FSB or any
of its Subsidiaries, any currently or formerly owned or operated property, any FSB Loan Property, or, to FSB’s knowledge, any Person
whose liability FSB or any of its Subsidiaries has assumed whether contractually or by operation of law, that could reasonably be expected
to result in any material claims, liability or investigations against FSB or any of its Subsidiaries, result in any material restrictions
on the ownership, use, or transfer of any property pursuant to any Environmental Law, or adversely affect the value of any FSB Loan Property
or property of FSB or any of its Subsidiaries. FSB has provided to BMT true and correct copies of all environmental reports or studies,
sampling data, correspondence and filings in its possession or reasonably available to it relating to FSB or any of its Subsidiaries
and any currently or formerly owned or operated property.
(r) Tax Matters.
(i) Neither FSB nor
any of its Subsidiaries has taken any action or failed to take any action, or is aware of any fact or circumstance, in each case, that
could reasonably be expected to prevent the Mergers from qualifying as a tax-free transfer to a controlled corporation under Section
351 of the Code.
(ii) FSB and each of
its Subsidiaries have timely filed all material Tax Returns required to have been filed, taking into account any properly granted extensions
of time to file, with the appropriate taxing authorities, such Tax Returns are true, correct and complete in all material respects and
none of such Tax Returns has been amended.
(iii) All material Taxes
required to be paid or remitted by FSB or any of its Subsidiaries on or before the date hereof have been so paid or remitted, including
all Taxes shown as due and owing on all Tax Returns.
(iv) FSB and each of
its Subsidiaries has complied in all material respects with all rules and regulations relating to the withholding of Taxes and the remittance
of withheld Taxes in connection with any amounts paid or owing to any employee, independent contractor, client, depositor, customer,
account holder, creditor, shareholder or other third party.
(v) Neither FSB nor
any of its Subsidiaries has waived any statute of limitations in respect of any material Taxes or agreed to any extension of time with
respect to a material Tax assessment or deficiency.
(vi) Neither FSB nor
any of its Subsidiaries has engaged in any transaction that would constitute a “reportable transaction” within the meaning
of Treasury Regulations Section 1.6011-4(b).
(vii) The unpaid Taxes
of FSB and each of its Subsidiaries (A) do not exceed the reserve for Tax liability (excluding any reserve for deferred Taxes established
to reflect temporary difference between book and Tax income) as shown on FSB’s balance sheet dated September 30, 2021 and (B) will
not exceed that reserve as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice
of FSB in filing its Tax Returns.
(viii) There are no
material liens for Taxes (other than Taxes not yet due and payable) upon any of the assets of FSB or any of its Subsidiaries.
(ix) There is no audit
or other proceeding with respect to Taxes by any Governmental Authority pending or being conducted with respect to FSB or any of its
Subsidiaries.
(x) Neither FSB nor
any of its Subsidiaries has received from any taxing authority (including jurisdictions in which FSB and its Subsidiaries have not filed
Tax Returns) any (A) written notice indicating an intent to open an audit or other review, (B) written request for information
related to Tax Matters or (C) written notice of deficiency or proposed adjustment for any amount of Tax, proposed, asserted or assessed
by any Governmental Authority against FSB or any of its Subsidiaries.
(xi) Neither FSB nor
any of its Subsidiaries is a party to or bound by any tax sharing agreement except with each other.
(xii) Neither FSB nor
any of its Subsidiaries has ever been a member of a group of corporations with which it has filed (or been required to file) consolidated,
combined or unitary Tax Returns other than any group of which FSB is the common parent.
(xiii) Neither FSB nor
any of its Subsidiaries is currently liable, nor does FSB or any of its Subsidiaries have any potential liability, for the Taxes of another
Person (A) under Treasury Regulations Section 1.1502-6 (or comparable provision of state, local or foreign law), (B) as transferee
or successor, or (C) by contract (other than a contract entered into in the ordinary course of business the primary purpose of which
is not related to Taxes) or indemnity or otherwise.
(xiv) Neither FSB nor
any of its Subsidiaries has ever been either a “distributing corporation” or a “controlled corporation” in connection
with a distribution of stock qualifying for tax-free treatment, in whole or in part, under Section 355 of the Code.
(xv) Neither FSB nor
any of its Subsidiaries has been a “United States real property holding corporation” within the meaning of Section 897 of
the Code during the five year period ending on the Closing Date.
(xvi) Neither FSB nor
any of its Subsidiaries will be required to include any item of income in, or exclude any item of deduction from, taxable income for
any taxable period (or portion thereof) beginning after the Closing Date, as a result of any: (A) change in method of accounting
for a taxable period ending on or prior to the Closing Date under Section 481 of the Code or similar state and local Tax law, (B) any
“closing agreement” as described in Section 7121 of the Code or similar state or local Tax law executed on or prior to the
Closing Date, (C) installment sale or open transaction disposition made on or prior to the Closing Date, (D) prepaid amount
received on or prior to the Closing Date, (E) any item having been reported on the completed contract method of accounting or the
percentage of completion method of accounting, (F) election under Section 108(i) of the Code, or (G) other action taken prior to the
Closing Date.
(xvii) Neither FSB nor
any of its Subsidiaries has (A) deferred the employer’s share of any “applicable employment taxes” under Section 2302
of the Coronavirus Aid, Relief, and Economic Security (CARES) Act (or any similar provision of state or local law), (B) deferred any
payroll tax obligations (including those imposed by Sections 3101(a) and 3201 of the Code) pursuant to or in connection with the Memorandum
on Deferring Payroll Tax Obligation in Light of the Ongoing COVID-19 Disaster, dated August 8, 2020, or (C) claimed any employee retention
credits under the Coronavirus Aid, Relief, and Economic Security (CARES) Act (or any similar provision of state or local law).
(xviii) FSB and each
of its Subsidiaries uses the accrual method of accounting for U.S. federal income Tax purposes.
(s) Risk Management
Instruments. Except as Previously Disclosed, neither FSB nor any of its Subsidiaries is a party to, nor has any agreed to enter into,
a Derivatives Contract.
(t) Loans; Nonperforming
and Classified Assets.
(i) Except as Previously
Disclosed, each Loan on the books and records of FSB or any of its Subsidiaries was made and has been serviced in all material respects
in accordance with its customary lending standards in the ordinary course of business, is evidenced in all material respects by appropriate
and sufficient documentation and, to the knowledge of FSB, constitutes the legal, valid and binding obligation of the obligor named therein,
subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating
to or affecting creditor’s rights or by general equity principles.
(ii) FSB has Previously
Disclosed as of the latest practicable date prior to the date of this Agreement: (A) any Loan under the terms of which the obligor
is 30 or more days delinquent in payment of principal or interest, or to the knowledge of FSB, in default of any other material provision
thereof; (B) each Loan which has been classified as “substandard,” “doubtful,” “loss” or “special
mention” (or words of similar import) by FSB or any of its Subsidiaries, or an applicable regulatory authority; (C) a listing
of the OREO acquired by foreclosure or by deed-in-lieu thereof, including the book value thereof; and (D) each Loan with any director
or executive officer of FSB or any of its Subsidiaries, or to the knowledge of FSB, any Person controlling, controlled by or under common
control with, any of the foregoing.
(iii) FSB has Previously
Disclosed a list and description of all loan participations entered into between FSB or any of its Subsidiaries and any third party which
are reflected on the books and records of FSB or any of its Subsidiaries. A true and complete copy of each document relating to each
loan participation has been delivered to BMT, with the exception of loan files for loans guaranteed or unguaranteed by the SBA or another
Governmental Authority and sold in the ordinary course of business.
(u) Properties.
All real property owned or leased by FSB or any of its Subsidiaries has been Previously Disclosed. Except as Previously Disclosed, with
respect to such real property that is owned by FSB or any of its Subsidiaries other than OREO, FSB has good and marketable and insurable
title, free and clear of all Liens, leases or other imperfections of title or survey, except (A) Liens for current taxes and assessments
not yet due and payable and for which adequate reserves have been established, (B) Liens set forth in policies for title insurance
of such properties delivered to BMT, and including, but not limited to the matters Previously Disclosed, (C) survey imperfections
set forth in surveys of such properties delivered to BMT, or (D) as Previously Disclosed. With respect to such real property that
is leased by FSB or any of its Subsidiaries, FSB has a good and marketable leasehold estate in and to such property (except for the matters
described in clauses (A)-(D) hereof). FSB has delivered true, correct and complete copies of such lease(s), together with all amendments
thereto, to BMT; any such lease is in full force and effect and will not lapse or terminate prior to the Closing Date; neither FSB nor
any of its Subsidiaries nor, to FSB’s knowledge, the landlord thereunder, is in default of any of their respective obligations
under any such lease and any such lease constitutes the valid and enforceable obligations of the parties thereto; the transactions contemplated
hereby will not require the consent of any landlord under any such lease, or such consent shall have been obtained; and, with respect
to any mortgage, deed of trust or other security instrument which establishes a Lien on the fee interest in any real property subject
to any such lease (which Lien is superior to such lease), FSB or its Subsidiaries has the benefit of a non-disturbance agreement from
the holder or beneficiary of such mortgage, deed of trust or other security instrument that provides that FSB’s or its Subsidiaries’
use and enjoyment of the real property subject to such lease will not be disturbed as a result of the landlord’s default under
any such mortgage, deed of trust or other security instrument, provided FSB and its Subsidiaries are not in default of any of their obligations
pursuant to any such lease beyond the expiration of any notice and cure periods. FSB shall not be required to obtain any non-disturbance
agreements under this Agreement. Except as Previously Disclosed, all real and personal property owned by FSB or its Subsidiaries or presently
used by any of them is in good condition (ordinary wear and tear excepted) and is sufficient to carry on their business in the ordinary
course of business consistent with its past practices. FSB and its Subsidiaries have good and marketable and insurable title, free and
clear of all Liens to all of their material properties and assets, other than real property, except (1) pledges to secure deposits
incurred in the ordinary course of its banking business consistent with past practice, (2) such imperfections of title and encumbrances,
if any, as are not material in character, amount or extent and as Previously Disclosed, and (3) as Previously Disclosed. All personal
property which is material to FSB’s or its Subsidiaries’ business and leased or licensed by FSB or its Subsidiaries is held
pursuant to leases or licenses which are valid and enforceable in accordance with their respective terms and such leases will not terminate
or lapse prior to the Effective Times.
(v) Intellectual Property.
Each of FSB and its Subsidiaries own or possess valid and binding licenses and other rights to use without payment of any material amount
all material patents, copyrights, trade secrets, trade names, service marks, trademarks and other intellectual property rights used in
its businesses, free and clear of any material Liens, all of which have been Previously Disclosed by FSB, and FSB and its Subsidiaries
have not received any notice of conflict or allegation of invalidity with respect thereto or that asserts the intellectual property rights
of others. To the knowledge of FSB, the operation of the business of FSB and its Subsidiaries does not infringe or violate the intellectual
property of any third party. FSB and its Subsidiaries have performed in all material respects all the obligations required to be performed
by them and they are not in default under any contract, agreement, arrangement or commitment relating to any of the foregoing.
(w) Fiduciary Accounts.
FSB and each of its Subsidiaries has properly administered all accounts for which it acts as a fiduciary, including but not limited to
accounts for which it serves as a trustee, agent, custodian, personal representative, guardian, conservator or investment advisor, in
accordance with the terms of the governing documents and applicable laws, regulations and common laws. Neither FSB nor any of its Subsidiaries
nor any of their respective directors, officers or employees, has committed any breach of trust with respect to any fiduciary account
and the records for each such fiduciary account are true and correct and accurately reflect the assets of such fiduciary account.
(x) Books and Records.
The books, records, systems, data and information of FSB and its Subsidiaries (A) have been fully, properly and accurately maintained
in material compliance with applicable legal and accounting requirements, and such books and records accurately reflect in all material
respects all dealings and transactions in respect of FSB and its Subsidiaries, and (B) are recorded, stored, maintained and operated
under means (including any electronic, mechanical or photographic process, whether computerized or not) that are under the exclusive
ownership and direct control of FSB and its Subsidiaries (including all means of access thereto and therefrom).
(y) Insurance.
FSB has Previously Disclosed all of the material insurance policies, binders, or bonds currently maintained by FSB or any of its Subsidiaries.
FSB and each of its Subsidiaries is insured with reputable insurers against such risks and in such amounts as the management of FSB have
reasonably determined to be prudent in accordance with industry practices; all of the material insurance policies, binders, or bonds
currently maintained by FSB and its Subsidiaries are in full force and effect; neither FSB nor any of its Subsidiaries is in material
default thereunder; and all claims thereunder have been filed in due and timely fashion.
(z) Allowance For Loan
Losses. FSB’s allowance for loan losses is, and shall be as of the Closing Date, in compliance with its existing methodology
for determining the adequacy of its allowance for loan losses as well as the standards established by GAAP, applicable Governmental Authorities
and the Financial Accounting Standards Board and is adequate under all such standards.
(aa) Transactions With Affiliates.
All “covered transactions” between FSB and an “affiliate” within the meaning of Sections 23A and 23B of the Federal
Reserve Act have been in compliance with such provisions.
(bb) Customer Relationships.
(i) Each customer of
FSB has been in all material respects originated and serviced (A) in conformity with the applicable policies of FSB (but subject
to customary policy exceptions), (B) in accordance with the terms of any applicable agreement, contract, instrument, undertaking,
note, or other legally binding commitment or obligation, whether written or oral, governing the relationship with such customer (each,
a “Customer Contract”), (C) in accordance with any instructions received from such customer and his or her authorized
representatives and authorized signers, (D) consistent with such customer’s risk profile, and (E) in compliance with
all applicable laws and FSB’s constituent documents, including any policies and procedures adopted thereunder. Each Customer Contract
has been duly and validly executed and delivered by FSB and, to the knowledge of FSB, the other contracting parties; each such Customer
Contract constitutes a valid and binding obligation of the parties thereto (except as enforceability 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); and FSB and the other parties thereto have duly performed in all material respects their obligations
thereunder.
(ii) No Customer Contract
provides for any material reduction of fees charged (or in other compensation payable to or from FSB thereunder) by reason of this Agreement.
(iii) Each account opening
document, customer disclosure statement and other Customer Contract conforms in all material respects to the forms that FSB has previously
made available to BMT.
(cc) Transaction Expenses.
Schedule 5.2(cc) sets forth a true, accurate and complete list of the reasonably anticipated Transaction Expenses. FSB will update
Schedule 5.2(cc) within five Business Days prior to the Closing.
(dd) Fairness Opinion.
The FSB Board has received the written opinion of its financial advisor, Keefe, Bruyette & Woods, Inc. (which, if initially rendered
verbally has been or will be confirmed by a written opinion, dated the same date), to the effect that, subject to the assumptions, qualifications
and limitations set forth therein, as of the date of such opinion, the FSB Merger Consideration is fair to the holders of FSB Common
Stock from a financial point of view.
(ee) Material Facts.
No statement contained in this Agreement, including the Disclosure Schedule, or any certificate furnished or to be furnished by or at
the direction of FSB to BMT pursuant to the provisions of this Agreement, contains or shall contain any untrue statement of a material
fact or shall omit to state any material fact necessary, in light of the circumstances under which it was made, in order to make the
statements herein or therein not misleading.
5.3 Representations
and Warranties of BMT. BMT hereby represents and warrants to FSB that, except as Previously Disclosed:
(a) Organization, Standing
and Authority. BMT is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.
Each other Subsidiary of BMT is a corporation, limited liability company or other entity duly organized, validly existing and in good
standing under the Laws of the jurisdiction of its organization. BMT and each of its Subsidiaries is licensed or qualified to do business
and is in good standing in each jurisdiction where its ownership or leasing of property or assets or the conduct of its business requires
it to be so licensed or qualified, except where the failure to be so licensed or qualified would not have nor reasonably be expected
to have a Material Adverse Effect on BMT. BMT and each of its Subsidiaries has in effect all federal, state, local and foreign governmental
authorizations necessary for it to own or lease its properties and assets and to carry on its business as now conducted, except where
the failure to be so authorized would not materially impair the ability of BMT to perform its obligations under this Agreement or otherwise
materially impede consummation of the transactions contemplated hereby.
(b) Corporate Power.
Each of BMT and its Subsidiaries has the corporate power and authority to carry on its business as it is now being conducted and to own
all its properties and assets; and BMT has the corporate power and authority to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby, in each case, subject to receipt of all necessary approvals of Governmental
Authorities.
(c) Corporate Authority.
(i) This Agreement and
the transactions contemplated hereby have been authorized and approved by all necessary corporate action of BMT and its Subsidiaries
on or prior to the date hereof and will remain in full force and effect through the Closing. Subject to receipt of the Requisite BMT
Vote, no other corporate or shareholder action on the part of BMT is necessary or required to authorize and approve this Agreement. BMT
has duly executed and delivered this Agreement and, assuming due authorization, execution and delivery by FSB, this Agreement is a valid
and legally binding obligation of BMT, enforceable in accordance with its terms (except as enforceability 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).
(ii) The BMT Board,
by a unanimous vote thereof, has adopted resolutions (A) determining that this Agreement and the transactions contemplated herein,
including the Merger, are fair to, and in the best interests of, BMT and its stockholders, and (B) approving and declaring advisable
this Agreement and the transactions contemplated hereby, including the Merger.
(d) Approvals.
No consents or approvals of, or waivers by, or notices to, or filings or registrations with, any Governmental Authority or with any third
party are required to be made or obtained by BMT or any of its Subsidiaries in connection with the execution, delivery or performance
by BMT of this Agreement, except for (i) filings of applications or notices with, and approvals or waivers by, the FDIC, the WDFI and
under the HSR Act, as required, (ii) filings with the SEC and state securities authorities, as applicable, in connection with the solicitation
of the Requisite BMT Vote, (iii) the registration of FSB Common Stock with the FDIC under the Exchange Act, (iv) applications for the
listing of FSB Common Stock and Assumed Warrants on the Selected Exchange, (v) the filing of the Certificate of Merger with the Secretary
of State of the State of Delaware pursuant to the DGCL, and (vi) the Requisite FSB Vote and (vii) the Requisite BMT Vote.. As of the
date hereof, FSB is not aware of any reason why the approvals set forth above will not be received in a timely manner and without the
imposition of a Burdensome Condition.
(e) Capitalization.
As of the date hereof, the authorized capital stock of BMT consists solely of 1,000,000,000 shares of BMT Common Stock, of which 12,206,378
shares were issued and outstanding as of the close of business on November 12, 2021, and 1,000,000 shares of BMT preferred stock,
of which no shares were issued and outstanding as of the date hereof. All of the outstanding shares of capital stock of BMT are duly
authorized, validly issued, fully paid and non-assessable, have been issued in compliance in all material respects with all applicable
federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights
to subscribe for or purchase any capital stock of BMT. There are no declared or accrued but unpaid dividends with respect to any shares
of BMT capital stock. All of the outstanding shares of capital stock of each of BMT’s Subsidiaries are owned by BMT free and clear
of any Liens and there are not outstanding Rights with respect to any shares of any Subsidiary’s capital stock. Except as specified
in the SEC Reports or as may be issued or issuable pursuant to the Capital Raise: (i) no shares of BMT’s outstanding capital
stock are subject to preemptive rights or any other similar rights; and (ii) as of the date hereof, there are no outstanding options,
warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible
into, or exercisable or exchangeable for, any shares of capital stock of BMT or contracts, commitments, understandings or arrangements
by which BMT or a Subsidiary is or may become bound to issue additional shares of capital stock of BMT or a Subsidiary or options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into,
or exercisable or exchangeable for, any shares of capital stock of BMT or a Subsidiary, other than those issued or granted pursuant to
contracts or equity or incentive plans or arrangements described in the SEC Reports.
(f) SEC Reports.
BMT’s Annual Report on Form 10-K for the year ended December 31, 2020 and all other reports, registration statements, definitive
proxy statements or information statements filed or to be filed by it subsequent to December 31, 2020 under the Securities Act, or under
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act in the form filed or to be filed (collectively, the “SEC Reports”)
with the SEC, as of the date filed or to be filed, complied in all material respects with the requirements of the Securities Act and
the Exchange Act and the rules and regulations of the SEC promulgated thereunder, and none of the SEC Reports, when filed, contained
any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were made, not misleading. No executive officer of BMT has failed
in any respect to make the certifications required of him or her under Section 302 or 906 of the Sarbanes-Oxley Act.
(g) Financial Statements.
The financial statements of BMT included in the SEC Reports comply in all material respects with applicable accounting requirements and
the rules and regulations of the SEC with respect thereto as in effect at the time of filing. Such financial statements have been prepared
in accordance with GAAP applied on a consistent basis during the periods involved, except as may be otherwise specified in such financial
statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the balance sheet of BMT and its consolidated Subsidiaries taken as a whole as of and for the dates
thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal,
year-end audit adjustments, which would not be material, either individually or in the aggregate.
(h) Sarbanes-Oxley;
Internal Accounting Controls. BMT is in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that
are effective as of the date hereof and as of the Closing. BMT and its Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance 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 asset accountability, and (iii) access to assets is permitted only in accordance with management’s general or specific
authorization. BMT and its Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) for BMT and its Subsidiaries and designed such disclosure controls and procedures to ensure that information required
to be disclosed by BMT in the reports 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. BMT’s certifying officers have evaluated the effectiveness of the
disclosure controls and procedures of BMT and the Subsidiaries as of the end of the period covered by the most recently filed periodic
report under the Exchange Act (such date, the “Evaluation Date”). BMT presented in its most recently filed periodic
report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures
based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over
financial reporting (as such term is defined in the Exchange Act) that have materially affected, or is reasonably likely to materially
affect, the internal control over financial reporting of BMT and its Subsidiaries.
(i) Material Changes.
Since the date of the latest audited financial statements included within the SEC Reports, except as disclosed in subsequent SEC Reports
filed prior to the date hereof, there have been no events, occurrences or developments that have had or would reasonably be expected
to have, either individually or in the aggregate, a Material Adverse Effect on BMT.
(j) Regulatory Matters.
(i) None of BMT nor
any of its Subsidiaries nor any of their respective properties is a party to or is subject to any order, decree, directive, agreement,
memorandum of understanding or similar arrangement with, or a commitment letter or similar submission to, or extraordinary supervisory
letter from, nor has BMT or any of its Subsidiaries adopted any policies, procedures or board resolutions at the request or suggestion
of, any Governmental Authority. BMT and its Subsidiaries have paid all assessments made or imposed by any Governmental Authority.
(ii) Except as Previously
Disclosed, no Governmental Authority has initiated since January 1, 2019 or has pending any proceeding, enforcement action or, to
the knowledge of BMT, investigation or inquiry into the business, operations, policies, practices or disclosures of BMT or any of its
Subsidiaries (other than normal examinations conducted by a Governmental Authority in the ordinary course of the business of BMT and
its Subsidiaries), or, to the knowledge of BMT, threatened any of the foregoing.
(k) Insurance.
BMT and each of the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in
such amounts as BMT believes to be prudent and customary in the businesses and locations in which BMT and the Subsidiaries are engaged.
Neither BMT nor any of its Subsidiaries has received any notice of cancellation of any such insurance, nor, to BMT’s knowledge,
will it or any Subsidiary be unable to renew their respective existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse
Effect on BMT.
(l) Legal Proceedings.
There is no injunction, order, judgment, decree or regulatory restriction of any Governmental Authority specifically imposed upon BMT
or any Subsidiaries or their respective assets which could or would prevent or delay the consummation of the transactions contemplated
hereby by BMT or its Subsidiaries, or any pending or threatened litigation or other proceeding that could reasonably be expected to have
a Material Adverse Effect on BMT.
(m) No Brokers.
Other than BMT’s engagement of Wedbush Securities Inc., no action has been taken by FSB that would give rise to any valid claim
against any party hereto for a brokerage commission, finder’s fee or other like payment with respect to the transactions contemplated
hereby.
(n) Reorganization.
BMT has not taken any action or failed to take any action, or is aware of any fact or circumstance, in each case, that could reasonably
be expected to prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code.
(o) No Conflict.
The execution and delivery by BMT of this Agreement and the consummation of the transactions provided for in this Agreement (i) do not
violate any provision of the BMT Articles, the BMT Bylaws, any provision of applicable federal or state law or any governmental rule
or regulation (assuming receipt of the required approval of any Governmental Authority and receipt of the Requisite BMT Vote), and (ii)
except as Previously Disclosed, do not require any consent of any Person under, conflict with or result in a breach of, or accelerate
the performance required by any of the terms of, any material debt instrument, lease, license, covenant, agreement or understanding to
which BMT or any of its Subsidiaries is a party or by which any of them is bound, or any order, ruling, decree, judgment, arbitration
award or stipulation to which BMT or any of its Subsidiaries is subject, or constitute a default thereunder or result in the creation
of any lien, claim, security interest, encumbrance, charge, restriction or right of any third party of any kind whatsoever upon any of
the properties or assets of BMT or any of its Subsidiaries.
(p) Legal Proceedings.
Except as Previously Disclosed, no litigation, arbitration, claim or other proceeding before any court or governmental agency is pending
against BMT or any of its Subsidiaries, individually or in the aggregate, that has had or could reasonably be expected to have a Material
Adverse Effect with respect to BMT, and, to the knowledge of BMT, no such litigation, arbitration, claim or other proceeding has been
threatened and there are no facts which could reasonably give rise to such litigation, arbitration, claim or other proceeding. Neither
BMT nor any of its Subsidiaries nor any of their respective properties is a party to or subject to any order, judgment, decree or regulatory
restriction that, individually or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect with respect
to BMT.
(q) Compliance With
Laws. Each of BMT and its Subsidiaries:
(i) is and at all times
since January 4, 2021 has been in material compliance with all applicable federal, state, local and foreign statutes, laws, codes, regulations,
ordinances, rules, judgments, injunctions, orders, decrees or policies and/or guidelines of any Governmental Authority applicable thereto
or to the employees conducting such businesses, including, without limitation, federal and state privacy, money laundering, financial
technology and transactions, the USA PATRIOT Act, all applicable fair lending laws and other laws relating to discriminatory business
practices;
(ii) has and at all
times since January 4, 2021 has had all material permits, licenses, franchises, authorizations, orders and approvals of, and has made
all material filings, applications and registrations with, all Governmental Authorities (and has paid all fees and assessments due and
payable in connection therewith) that are required in order to permit it to own or lease its properties and to conduct its business as
presently conducted; and all such permits, licenses, franchises, certificates of authority, orders and approvals are in full force and
effect and, to the knowledge of BMT, no suspension or cancellation of any of them is pending or threatened; and
(iii) has received,
since January 4, 2021, no material notification or communication from any Governmental Authority (A) asserting that BMT or any of its
Subsidiaries is not in compliance with any of the statutes, regulations or ordinances which such Governmental Authority enforces and
which have not been corrected or (B) threatening to revoke any license, franchise, permit or governmental authorization (nor, to the
knowledge of BMT, do any grounds for any of the foregoing exist).
(r) Material Facts.
No statement contained in this Agreement, including the Disclosure Schedule, or any certificate furnished or to be furnished by or at
the direction of BMT to FSB pursuant to the provisions of this Agreement, contains or shall contain any untrue statement of a material
fact or shall omit to state any material fact necessary, in light of the circumstances under which it was made, in order to make the
statements herein or therein not misleading.
ARTICLE VI
COVENANTS
6.1 Reasonable Best
Efforts. Subject to the terms and conditions of this Agreement, FSB, on the one hand, and BMT, on the other hand, agree to use their
commercially reasonable best efforts in good faith, to take, or cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or desirable, or advisable under applicable laws, so as to permit consummation of the transactions contemplated hereby
as promptly as practicable and otherwise to enable consummation of the transactions contemplated hereby, including the satisfaction of
the conditions set forth in Article VII hereof, and shall cooperate fully with the other parties hereto to that end.
6.2 Regulatory Filings.
(a) Subject to the other
provisions of this Agreement, BMT and FSB shall cooperate and use their respective commercially reasonable best efforts to prepare all
documentation, to effect all filings and to obtain all permits, consents, approvals and authorizations of all third parties and Governmental
Authorities necessary to consummate the transactions contemplated hereby; and any initial filings with Governmental Authorities shall
be made by BMT or FSB, as the case may be, as soon as reasonably practicable after the execution hereof. BMT and FSB shall use commercially
reasonable best efforts to make any filings seeking approval to consummate the Merger within thirty days. Each of BMT and FSB shall have
the right to review in advance, and to the extent practicable, each shall consult with the other, in each case subject to applicable
laws relating to the exchange of information, with respect to all written information submitted to any Governmental Authority in connection
with the transactions contemplated hereby, provided that BMT shall not be required to provide FSB with confidential portions of any filing
with a Governmental Authority. In exercising the foregoing right, each of such parties agrees to act reasonably and as promptly as practicable.
(b) Each party agrees,
(i) upon request, to furnish the other parties with all information concerning itself and its Subsidiaries and their respective directors,
officers and shareholders and such other matters as may be reasonably necessary or advisable in connection with any filing, notice or
application made by or on behalf of such other parties or any of their respective Subsidiaries (if applicable) to any third party or
Governmental Authority, and (ii) to promptly advise the other parties of any communication it receives from a Governmental Authority
that causes the party receiving such communications to conclude that any regulatory approval required to complete the transactions contemplated
hereby will not be reasonably likely to be obtained, will be materially delayed or will contain a Burdensome Condition.
6.3 Press Releases.
BMT and FSB shall consult with each other before issuing any press release with respect to the transactions contemplated hereby or this
Agreement and shall not issue any such press release or make any such public statements without the prior consent of the other parties,
which shall not be unreasonably withheld or delayed; provided, however, that a party may, without the prior consent of the other
parties (but after such consultation, to the extent practicable under the circumstances), issue such press release or make such public
statements as may upon the advice of outside counsel be required by law or the rules or regulations of the securities exchange on which
it trades, to the extent applicable.
6.4 Access; Information.
(a) Upon reasonable notice
from BMT, and subject to applicable laws relating to the exchange of information, FSB shall afford BMT and its respective officers, employees,
counsel, accountants and other authorized representatives such access during normal business hours throughout the period prior to the
Effective Times to the books, records (including, without limitation, Tax Returns and work papers of independent auditors), properties,
personnel and advisors of FSB and its Subsidiaries and to such other information relating to FSB and its Subsidiaries as BMT may reasonably
request and, during such period, it shall furnish to BMT all information concerning the business, properties and personnel of FSB and
its Subsidiaries as BMT may reasonably request. Upon reasonable notice from FSB and subject to applicable laws relating to the exchange
of information, BMT shall afford FSB and its officers, employees, counsel, accountants and other authorized representatives such access
during normal business hours throughout the period prior to the Effective Times to the books, records (including, without limitation,
Tax Returns and work papers of independent auditors), properties, personnel and advisors of BMT and its Subsidiaries and to such other
information relating to BMT and its Subsidiaries as FSB may reasonably request and, during such period, it shall furnish to FSB all information
concerning the business, properties and personnel of BMT and its Subsidiaries as FSB may reasonably request.
(b) FSB shall cooperate,
and use its commercially reasonable best efforts to cause its independent auditor to cooperate, at FSB’s expense, with BMT and
its independent auditor in order to enable BMT and its Affiliates to prepare financial statements, including, without limitation, pro
forma financial information, for FSB and its Subsidiaries that may be required by BMT in connection with the filing of regulatory applications
with Governmental Authorities or otherwise required in connection with the transactions contemplated by this Agreement. Without limiting
the generality of the foregoing, FSB agrees that it will execute and deliver, and cause its officers to execute and deliver (including
former officers of FSB after the Closing), such “representation” letters as are customarily delivered in connection with
audits and as the independent auditors or BMT may reasonably request under the circumstances.
(c) FSB will furnish to
BMT a complete and accurate list as of the end of each calendar month following the date of this Agreement, within 15 days after the
end of each such calendar month, of (i) all periodic internal credit quality reports of FSB and its Subsidiaries prepared during such
calendar month (which reports will be prepared in a manner consistent with past practices), (i) all loans of FSB or its Subsidiaries
classified as non-accrual, as restructured, as 90 days past due, as still accruing and doubtful of collection or any comparable classification,
(iii) all OREO, including in-substance foreclosures and real estate in judgment, (iv) all new loans, (v) any current repurchase
obligations of FSB or its Subsidiaries with respect to any loans, loan participations or state or municipal obligations or revenue bonds,
and (vi) any standby letters of credit issued by FSB or its Subsidiaries. With respect to any loans or agreements or commitments to extend
credit to one borrower that aggregate, with other loans to the same borrower, more than $2,000,000, FSB shall deliver to BMT, or make
accessible to BMT through remote communication, on or before delivery of such monthly credit reports, or as soon as practicable thereafter,
copies of the documentation, or a summary of the documentation, that served as the basis for the decision to make such loan or extension
of credit. During the period from the date of this Agreement to the Effective Times, FSB and its Subsidiaries shall, upon the request
of BMT, cause one or more of its designated representatives to confer on a monthly or more frequent basis with representatives of BMT
regarding its consolidated financial condition, operations and business and matters relating to the completion of the Merger, and will
provide such access and support as is reasonably necessary for BMT to perform audits of the consolidated financial condition, operations
and business of FSB and its Subsidiaries.
(d) FSB shall furnish
BMT with its balance sheets as of the end of each calendar month following the date of this Agreement and the related statements of income,
within 15 days after the end of each such calendar month. Such financial statements shall be prepared on a basis consistent with its
quarterly unaudited financial statements and on a consistent basis during the periods involved and shall fairly present the consolidated
financial position of FSB as of the dates thereof and the consolidated results of operations of FSB for the periods then ended. FSB shall
also provide to BMT, promptly and in any event within 15 days of the end of each month after the date of this Agreement, a listing of
any increases in compensation granted to employees generally and to any management employee specifically, and a list of any employment
terminations or new hires.
(e) From time to time
prior to the Effective Times, FSB will promptly supplement or amend the Disclosure Schedule delivered in connection herewith with respect
to any material matter hereafter arising which, if existing, occurring or known on the date of this Agreement, would have been required
to be set forth or described in such Disclosure Schedule or which is necessary to correct any information in such Disclosure Schedule
which has been rendered inaccurate thereby. No supplement or amendment to such Disclosure Schedule shall have any effect for the purpose
of determining satisfaction of the conditions set forth in Article VII; provided, however, that the contents of any
supplement or amendment shall not otherwise be deemed a breach of a representation or warranty, including for purposes of Section 8.1(b)(ii),
unless such supplement or amendment contains a fact, circumstance or event that individually, or taken together with all other facts,
circumstances and events has resulted in or has had, or is reasonably expected to have or result in a Material Adverse Effect. From time
to time prior to the Effective Times, BMT will promptly supplement or amend the Disclosure Schedule delivered in connection herewith
with respect to any material matter hereafter arising which, if existing, occurring or known on the date of this Agreement, would have
been required to be set forth or described in such Disclosure Schedule or which is necessary to correct any information in such Disclosure
Schedule which has been rendered inaccurate thereby. No supplement or amendment to such Disclosure Schedule shall have any effect for
the purpose of determining satisfaction of the conditions set forth in Article VII; provided, however, that the contents
of any supplement or amendment shall not otherwise be deemed a breach of a representation or warranty, including for purposes of Section 8.1(b)(i),
unless such supplement or amendment contains a fact, circumstance or event that individually, or taken together with all other facts,
circumstances and events has resulted in or has had, or is reasonably expected to have or result in a Material Adverse Effect.
(f) No investigation by
any of the parties or their respective representatives shall affect the representations, warranties, covenants or agreements of the other
parties set forth herein.
6.5 Shareholders’
Approvals
(a) Each of FSB and BMT
shall call a meeting of its shareholders (the “FSB Meeting” and the “BMT Meeting,” respectively)
to be held as soon as reasonably practicable after BMT files the Joint Proxy Statement with the SEC in definitive form for the purpose
of obtaining (i) the Requisite BMT Vote required in connection with this Agreement and the Mergers and the Requisite FSB Vote required
in connection with this Agreement and the Mergers and the New FSB Articles, and (ii) if so desired and mutually agreed, a vote upon other
matters of the type customarily brought before a meeting of shareholders in connection with the approval of a merger agreement or the
transactions contemplated thereby, and each of BMT and FSB shall use its reasonable best efforts to cause such meetings to occur as soon
as reasonably practicable and on the same date. Each of FSB and BMT and their respective Boards of Directors shall use its reasonable
best efforts to obtain from the shareholders of FSB and BMT, as applicable, the Requisite FSB Vote and the Requisite BMT Vote, as applicable,
including by communicating to the respective shareholders of FSB and BMT its recommendation (and including such recommendation in the
Joint Proxy Statement) that, in the case of FSB, the shareholders of FSB approve this Agreement and the New FSB Articles (the “FSB
Board Recommendation”), and in the case of BMT, that the shareholders of BMT approve this Agreement (the “BMT Board
Recommendation”), FSB and each of FSB and BMT and their respective Boards of Directors shall not (A) withhold, withdraw, modify
or qualify in a manner adverse to the other party the FSB Board Recommendation, in the case of FSB, or the BMT Board Recommendation,
in the case of BMT, (B) fail to make the FSB Board Recommendation, in the case of FSB, or the BMT Board Recommendation, in the case of
BMT, in the Joint Proxy Statement, (C) adopt, approve, recommend or endorse an Acquisition Proposal or publicly announce an intention
to adopt, approve, recommend or endorse an Acquisition Proposal, (D) fail to publicly and without qualification (1) recommend against
any Acquisition Proposal or (2) reaffirm the FSB Board Recommendation, in the case of FSB, or the BMT Board Recommendation, in the case
of BMT, in each case within ten business days (or such fewer number of days as remains prior to the FSB Meeting or the BMT Meeting, as
applicable) after an Acquisition Proposal is made public or any request by the other party to do so, or (E) publicly propose to do any
of the foregoing (any of the foregoing a “Recommendation Change”). However, subject to Section 8.1 and Section
8.2, if the Board of Directors of FSB or BMT, after receiving the advice of its outside counsel and, with respect to financial matters,
its financial advisors, determines in good faith that it would more likely than not result in a violation of its fiduciary duties under
applicable law to make or continue to make the FSB Board Recommendation or the BMT Board Recommendation, as applicable, such Board of
Directors may, in the case of FSB, prior to the receipt of the Requisite FSB Vote, and in the case of BMT, prior to the receipt of the
Requisite BMT Vote, submit this Agreement to its shareholders without recommendation (although the resolutions approving this Agreement
as of the date hereof may not be rescinded or amended), in which event such Board of Directors may communicate the basis for its lack
of a recommendation to its shareholders in the Joint Proxy Statement or an appropriate amendment or supplement thereto to the extent
required by law; provided that such Board of Directors may not take any actions under this sentence unless it (I) gives the other
party at least three business days’ prior written notice of its intention to take such action and a reasonable description of the
event or circumstances giving rise to its determination to take such action (including, in the event such action is taken in response
to an Acquisition Proposal, the latest material terms and conditions and the identity of the third party in any such Acquisition Proposal,
or any amendment or modification thereof, or describe in reasonable detail such other event or circumstances) and (II) at the end of
such notice period, takes into account any amendment or modification to this Agreement proposed by the other party and, after receiving
the advice of its outside counsel and, with respect to financial matters, its financial advisors, determines in good faith that it would
nevertheless more likely than not result in a violation of its fiduciary duties under applicable law to make or continue to make the
FSB Board Recommendation or BMT Board Recommendation, as the case may be. Any material amendment to any Acquisition Proposal will be
deemed to be a new Acquisition Proposal for purposes of this Section 6.3 and will require a new notice period as referred to in
this Section 6.3. FSB or BMT shall adjourn or postpone the FSB Meeting or the BMT Meeting, as the case may be, if, as of the time
for which such meeting is originally scheduled there are insufficient shares of FSB Common Stock or BMT Common Stock, as the case may
be, represented (either in person or by proxy) to constitute a quorum necessary to conduct the business of such meeting, or if on the
date of such meeting BMT or FSB, as applicable, has not received proxies representing a sufficient number of shares necessary to obtain
the Requisite BMT Vote or the Requisite FSB Vote, and subject to the terms and conditions of this Agreement (including the immediately
preceding sentence), BMT or FSB, as applicable, shall continue to use reasonable best efforts to solicit proxies from its shareholders
in order to obtain the Requisite BMT Vote or the Requisite FSB Vote, respectively. Notwithstanding anything to the contrary herein, but
subject to the obligation to adjourn or postpone such meeting as set forth in the immediately preceding sentence, unless this Agreement
has been terminated in accordance with its terms, (x) the FSB Meeting shall be convened and this Agreement shall be submitted to the
shareholders of FSB at the FSB Meeting and (y) the BMT Meeting shall be convened and this Agreement shall be submitted to the shareholders
of BMT at the BMT Meeting, and nothing contained herein shall be deemed to relieve either FSB or BMT of such obligation.
(b) Each party agrees
that any violation of this Section 6.5 by any Subsidiary or any Affiliate or Representative of such party or any of its Subsidiaries
shall be deemed a breach of this Section 6.5 by such party. Each party acknowledges that this Section 6.5 is a significant
inducement for the other party to enter into this Agreement and the absence of such provision would have resulted in either (i) a
material change in the Exchange Ratio, the FSB Merger Consideration, or both or (ii) a failure to induce the other party to enter
into this Agreement.
(c) Nothing contained
herein shall relieve, alter or suspend the responsibilities and obligations of the Persons signing Support Agreements under such agreements.
6.6 Joint Proxy Statement.
(a) BMT and FSB contemplate
that all shares of FSB Common Stock issued in exchange for shares of BMT Common Stock in the BMT Merger will be exempt from the Securities
Act under the provisions of Section 3(a)(2) of such Act. BMT and FSB shall promptly prepare and cooperate in all reasonable respects
with regard to the preparation of a Joint Proxy Statement (the “Joint Proxy Statement”), the definitive form of which
shall constitute a disclosure document for the offer and issuance of the shares of FSB Common Stock to be received by holders of BMT
Common Stock in the BMT Merger, a proxy statement for the solicitation of proxies by BMT with respect to the approval of this Agreement
and the transactions contemplated hereby (including the Mergers) and proxy statement for the solicitation of proxies by FSB with respect
to the approval of this Agreement and the transactions contemplated hereby (including the Mergers and the adoption of the New FSB Articles).
BMT shall file a preliminary form of the Joint Proxy Statement with the SEC in accordance with the applicable provisions of the Exchange
Act and shall use its reasonable best effort cause the Joint Proxy Statement to by cleared by the SEC as promptly as is practicable after
filing. Each Party shall also take any action required to be taken and make any necessary filings under the Securities Act, the Exchange
Act or any applicable state securities Laws in connection with the transaction contemplated by this Agreement or the issuance of FSB
Common Stock or the Assumed Warrants. BMT and FSB shall each provide promptly to the other such information concerning its business and
financial condition and affairs as may be required or appropriate for including in the Joint Proxy Statement, and shall cause its legal
counsel, financial advisors and independent auditors to cooperate with the other party’s legal counsel, financial advisors and
independent auditors in the preparation of the Joint Proxy Statement. Each of BMT and FSB further agrees that if it shall become aware
prior to the Effective Times of any information furnished by it that would cause any of the statements in the Joint Proxy Statement to
be false or misleading with respect to any material fact, or to omit to state any material fact necessary to make the statements therein,
under the circumstances in which they were made, not false or misleading, it will promptly inform the other party thereof and take, or
assist with, the necessary steps to correct the Joint Proxy Statement.
6.7 Acquisition Proposals.
(a) Each party agrees
that it will not, and will cause each of its Subsidiaries and its and their respective officers, directors, employees, agents, advisors
and representatives (collectively, “Representatives”) not to, directly or indirectly, (i) initiate, solicit, knowingly
encourage or knowingly facilitate any inquiries or proposals with respect to any Acquisition Proposal, (ii) engage or participate in
any negotiations with any person concerning any Acquisition Proposal, (iii) provide any confidential or nonpublic information or data
to, have or participate in any discussions with any person relating to any Acquisition Proposal or (iv) unless this Agreement has been
terminated in accordance with its terms, approve or enter into any term sheet, letter of intent, commitment, memorandum of understanding,
agreement in principle, acquisition agreement, merger agreement or other agreement (whether written or oral, binding or nonbinding) (other
than a confidentiality agreement referred to and entered into in accordance with this Section 6.7) in connection with or relating
to any Acquisition Proposal. Notwithstanding the foregoing, in the event that after the date of this Agreement and prior to the receipt
of the Requisite FSB Vote, in the case or FSB, or the Requisite BMT Vote, in the case of BMT, a party receives an unsolicited bona fide
written Acquisition Proposal, such party may, and may permit its Subsidiaries and its and its Subsidiaries’ Representatives to,
furnish or cause to be furnished confidential or nonpublic information or data and participate in such negotiations or discussions with
the person making the Acquisition Proposal if the Board of Directors of such party concludes in good faith (after receiving the advice
of its outside counsel, and with respect to financial matters, its financial advisors) that failure to take such actions would be more
likely than not to result in a violation of its fiduciary duties under applicable law; provided, that, prior to furnishing any
confidential or nonpublic information permitted to be provided pursuant to this sentence, such party shall have entered into a confidentiality
agreement with the person making such Acquisition Proposal , which confidentiality agreement shall not provide such person with any exclusive
right to negotiate with such party. Each party will, and will cause its Representatives to, immediately cease and cause to be terminated
any activities, discussions or negotiations conducted before the date of this Agreement with any person other than BMT or FSB, as applicable,
with respect to any Acquisition Proposal. Each party will promptly (within 48 hours) advise the other party following receipt of any
Acquisition Proposal or any inquiry which could reasonably be expected to lead to an Acquisition Proposal, and the substance thereof
(including the terms and conditions of and the identity of the person making such inquiry or Acquisition Proposal), will provide the
other party with an unredacted copy of any such Acquisition Proposal and any draft agreements, proposals or other materials received
in connection with any such inquiry or Acquisition Proposal, and will keep the other party apprised of any related developments, discussions
and negotiations on a current basis, including any amendments to or revisions of the terms of such inquiry or Acquisition Proposal. Each
party shall use its reasonable best efforts to enforce any existing confidentiality or standstill agreements to which it or any of its
Subsidiaries is a party in accordance with the terms thereof.
(b) Nothing contained
in this Agreement shall prevent a party or its Board of Directors from complying with Rule 14d-9 and Rule 14e-2 under the Exchange Act
with respect to an Acquisition Proposal; provided, that such rules will in no way eliminate or modify the effect that any
action pursuant to such rules would otherwise have under this Agreement..
6.8 Selected Exchange
Listing. Each of BMT and FSB shall use its commercially reasonable best efforts to cause the FSB Common Stock and the Assumed Warrants,
including but not limited to the shares of FSB Common Stock and the Assumed Warrants issuable in connection with the Merger, to be authorized
for listing on the Selected Exchange as of the BMT Effective Time.
6.9 Exchange Act
Registration. Each of BMT and FSB shall use its commercially reasonable best efforts to cause the FSB Common Stock to be registered
with the FDIC under the Exchange Act as of the BMT Effective Time.
6.10 Certain Policies.
Prior to the Closing Date but after receipt of all regulatory approvals required to consummate the transactions contemplated hereby,
FSB shall, and shall cause its Subsidiaries to, consistent with GAAP and applicable banking laws and regulations, to the extent requested
by BMT, modify or change their corporate governance, loan, OREO, accrual, reserve, tax, litigation and real estate valuation policies
and practices (including loan classifications and levels of reserves) and the committees of the FSB Board so as to be applied on a basis
that is consistent with those of BMT; provided, however, that no such modifications or changes need be made prior to the satisfaction
of the condition set forth in Section 7.1(a); and provided further that in any event, no accrual or reserve made by FSB
or any of its Subsidiaries pursuant to this Section 6.10 shall constitute or be deemed to be a breach, violation of or failure
to satisfy any representation, warranty, covenant, agreement, condition or other provision of this Agreement or otherwise be considered
in determining whether any such breach, violation or failure to satisfy shall have occurred. The recording of any such adjustments shall
not be deemed to imply any misstatement of previously furnished financial statements or information and shall not be construed as concurrence
of FSB or its management with any such adjustments.
6.11 Notification
of Certain Matters. FSB shall give prompt notice to BMT, and BMT shall give prompt notice to FSB, of any fact, event or circumstance
known to it that (a) is reasonably likely, individually or taken together with all other facts, events and circumstances known to
such party, to result in any Material Adverse Effect with respect to such party, (b) would cause or constitute a material breach
of any of its representations, warranties, covenants or agreements contained herein, or (c) lead to litigation or regulatory action
that would delay or prevent the consummation of the transactions contemplated by this Agreement.
6.12 Estoppel Letters
and Consents. FSB shall use its commercially reasonable best efforts to obtain and deliver to BMT at the Closing with respect to
all real estate (a) owned by FSB or any of its Subsidiaries, an estoppel letter dated as of the Closing Date in a form reasonably
acceptable to BMT from each tenant, and (b) leased by FSB or any of its Subsidiaries, an estoppel letter dated as of the Closing
Date in a form reasonably acceptable to BMT from each lessor to the extent required by the applicable lease. FSB shall also obtain the
waiver, approval and/or consents to assignment for all Material Contracts so identified as requiring consent on the Disclosure Schedules
(the “Consents”). Where required by law or by agreements with third parties, FSB shall use commercially reasonable
best efforts to obtain from third parties, prior to the Closing Date, all other consents to the transactions contemplated by this Agreement.
6.13 Antitakeover
Statutes. Each of BMT and FSB and their respective boards of directors shall, if any state antitakeover statute or similar statute
becomes applicable to this Agreement and the transactions contemplated hereby, take all action reasonably necessary to ensure that the
transactions contemplated hereby may be consummated as promptly as practicable on the terms contemplated hereby and otherwise to minimize
the effect of such statute or regulation on this Agreement and the transactions contemplated hereby.
6.14 Notice to Customers.
On and after the receipt of all regulatory approvals required to consummate the transactions contemplated hereby, FSB shall, and shall
cause its Subsidiaries to, permit BMT to provide one or more written notices (which may be joint notices from BMT and FSB) to customers
of FSB and its Subsidiaries to describe the proposed transactions, the effect on customers and planned transition procedures. FSB shall
have the right to review and approve the substance of any such communications, provided that FSB shall not unreasonably withhold, delay
or condition its approval.
6.15 FSB Employees.
After the Effective Times, a substantial majority of the employees of FSB will have the opportunity to continue their at-will employment
with BMT, if and to the extent that mutually suitable job opportunities are available. FSB employees whose positions are eliminated as
a result of the Mergers and who remain employees of FSB through Closing or, where required by BMT for post-merger systems integration
and conversion activities (“Conversion”), through Conversion, will be eligible to receive upon Closing severance pay
and/or stay bonuses. The specific terms and conditions and personnel of the stay bonus/severance program will be determined by the parties
prior to Closing, in consultation with the parties’ senior management. BMT shall pay, if BMT determines such is due under the terms
of any change of control or similar agreements, in cash upon Closing any severance, change of control, similar payments or amounts due
to such employees and any other employees of FSB pursuant to FSB’s existing employment and/or change in control agreements.
6.16 Indemnification;
Directors and Officers Insurance.
(a) From and after the
Effective Times, FSB shall indemnify and hold harmless, to the fullest extent permitted under applicable law (and shall also advance
expenses as incurred to the fullest extent permitted under applicable law and the FSB Articles and FSB Bylaws), each present and former
director and officer of FSB and BMT (in each case, when acting in such capacity), determined as of the Effective Times (collectively,
the “Indemnified Parties”) against any costs or expenses (including reasonable attorneys’ fees), judgments,
fines, losses, claims, damages or liabilities incurred in connection with any claim, action, suit, proceeding or investigation, whether
civil, criminal, administrative or investigative, arising out of matters existing or occurring at or prior to the Effective Times, including
the transactions contemplated by this Agreement; provided that the Indemnified Party to whom expenses are advanced provides an
undertaking to repay such advances if it is ultimately determined that such Indemnified Party is not entitled to indemnification by FSB.
(b) Any Indemnified Party
wishing to claim indemnification under Section 6.16(a), upon learning of any claim, action, suit, proceeding or investigation
described above, will promptly notify FSB; provided that failure to so notify will not affect the obligations of BMT under Section
6.16(a) unless and to the extent that FSB is actually and materially prejudiced as a consequence.
(c) Prior to the Effective
Times, FSB shall, or if FSB is unable to, BMT as of the Effective Times shall, obtain and fully pay for “tail” insurance
(providing only for the Side A coverage for Indemnified Parties where the existing policies also include Side B coverage for FSB) with
a claims period of at least three years from and after the Effective Times with respect to directors’ and officers’ liability
insurance and fiduciary liability insurance (collectively, “D&O Insurance”) with aggregate limits of not less
than $2,500,000.
(d) The provisions of
this Section 6.16 are intended to be for the benefit of, and shall be enforceable by, each Indemnified Party as if he or she was
a party to this Agreement.
6.17 Benefit Plans.
During the period commencing at the Effective Times and ending on the first anniversary of the Closing Date, FSB shall provide each
continuing employee of FSB and BMT and their Subsidiaries immediately prior to the Closing with compensation and employee benefits that
are substantially comparable in the aggregate to those provided to similarly situated employees of BMT and its Subsidiaries; provided
that FSB may satisfy its obligation under this Section 6.17 for a transitional period by providing compensation and employee
benefits that are substantially comparable in the aggregate to those provided by either FSB or BMT or their Subsidiaries immediately
prior to the Effective Times.
6.18 FSB Merger Consideration.
The FSB Board and the BMT Board shall approve the payment in cash of an amount equal to the aggregate FSB Merger Consideration to
holders of shares of FSB Common Stock immediately prior to the FSB Effective Time, to be paid to such holders upon Closing pursuant to
Article III. The aggregate amount of the FSB Merger Consideration, which is based on the 3,154,586 shares of FSB Common Stock
currently outstanding (subject to adjustment for the exercise of FSB Options prior to Closing) and the agreed per share cash price of
up to $7.22 (subject to adjustment as provided in the definition of FSB Merger Consideration and in Section 7.3(k)), payable to
the holders of the FSB Common Stock upon Closing is $22,776,110.92.
6.19 Capital Raise.
BMT shall use all commercially reasonable efforts to complete one or more sales of BMT Common Stock prior to the Effective Times
resulting in at least $25,000,000 in cash proceeds in the aggregate (the “Capital Raise”).
6.20 Formation of
Intermediate Merger Sub; Accession. Following the date of this Agreement, FSB shall form Intermediate Merger Sub as a Washington
corporation and a wholly owned subsidiary of FSB, the Articles of Incorporation for which shall be subject to approval by BMT. As of
its incorporation, Merger Sub shall have 1,000 authorized shares of common stock, par value $0.0001 per share, of which 1,000 shares
shall be outstanding and none of which shall be held in the treasury of BMT Merger Sub. Promptly following the incorporation of Intermediate
Merger Sub, (a) FSB, as the sole shareholder of Intermediate Merger Sub, shall approve this Agreement and (b) FSB shall cause Intermediate
Merger Sub to accede to this Agreement by executing a signature page to this Agreement, after which time, Intermediate Merger Sub shall
be a party to this Agreement. Notwithstanding any provision herein to the contrary, the obligations of Intermediate Merger Sub to perform
its covenants hereunder shall commence only at the time of its incorporation and accession to this Agreement. Prior to the Effective
Times, FSB shall take such actions as are reasonably necessary to cause the Board of Directors of Intermediate Merger Sub to unanimously
approve this Agreement. Prior to the Effective Times, Intermediate Merger Sub shall not have carried on any business nor conducted any
operations other than the execution of this Agreement, the performance of its obligations hereunder and matters ancillary thereto.
6.21 Formation of
BMT Merger Sub; Accession. Following the date of this Agreement, FSB shall form BMT Merger Sub as a Delaware corporation and a wholly
owned subsidiary of Intermediate Merger Sub, the Certificate of Incorporation for which shall be subject to approval by BMT. As of its
incorporation, Merger Sub shall have 1,000 authorized shares of common stock, par value $0.0001 per share, of which 1,000 shares shall
be outstanding and none of which shall be held in the treasury of BMT Merger Sub. Promptly following the incorporation of BMT Merger
Sub, (a) Intermediate Merger Sub, as the sole shareholder of BMT Merger Sub, shall approve this Agreement and (b) Intermediate Merger
Sub shall cause BMT Merger Sub to accede to this Agreement by executing a signature page to this Agreement, after which time, BMT Merger
Sub shall be a party to this Agreement. Notwithstanding any provision herein to the contrary, the obligations of BMT Merger Sub to perform
its covenants hereunder shall commence only at the time of its incorporation and accession to this Agreement. Prior to the Effective
Times, FSB and Intermediate Merger Sub shall take such actions as are reasonably necessary to cause the Board of Directors of BMT Merger
Sub to unanimously approve this Agreement. Prior to the Effective Times, BMT Merger Sub shall not have carried on any business nor conducted
any operations other than the execution of this Agreement, the performance of its obligations hereunder and matters ancillary thereto.
6.22 Section 16 Reporting
Requirements. The FSB Board shall, prior to the Effective Times of the Mergers, take all such actions as may be necessary or appropriate
pursuant to Exchange Act Rule 16b-3(e) to exempt (a) the conversion of BMT Common Stock and BMT Warrants into FSB Common Stock, Assumed
RSUs and Assumed Warrants, as the case may be, and (b) the acquisition of FSB Common Stock, Assumed RSUs and Assumed Warrants, as the
case may be, pursuant to the terms of this Agreement by officers and directors of BMT subject to the reporting requirements of Section
16(a) of the Exchange Act.
6.23 Closing Financial
Statements. At least five Business Days prior to the Effective Times of the Mergers, FSB shall provide BMT with: (a) FSB’s
unaudited consolidated balance sheet and results of operations presenting the financial condition of FSB and its Subsidiaries as of the
close of business on the last day of the last month ended prior to the Closing Date and for the period beginning on the first date of
the then-current fiscal year through the close of business on the last day of the last month ended prior to the Effective Times, which
shall include, for avoidance of doubt, accruals for all amounts will become payable by FSB upon or subject to completion of the Mergers
(the “Closing Financial Statements”); and (b) a calculation of the Adjusted Tangible Common Equity along with documents
reasonably supporting such calculation and provided, however, that if the Effective Times of the Mergers occurs on or before the
fifth Business Day of the month, the Closing Financial Statements and such calculation shall instead be as of and through the end of
the second month immediately preceding the Effective Times. The Closing Financial Statements shall be prepared in accordance with GAAP
(excluding notes) and regulatory accounting principles and other applicable legal and accounting requirements, and shall reflect all
period-end accruals and other adjustments, subject to the other requirements of this Agreement and shall also reflect accruals for all
fees and expenses incurred or expected to be incurred in connection with the transactions contemplated in this Agreement (whether or
not doing so is in accordance with GAAP), including all of FSB’s Transaction Expenses. The Closing Financial Statements and the
calculation of the Adjusted Tangible Common Equity shall be accompanied by a certificate of FSB’s Chief Financial Officer to the
effect that such financial statements meet the requirements of this Section 6.23, the calculation of Adjusted Tangible Common
Equity conforms to the requirements of this Agreement. On the Closing Date, FSB’s Chief Financial Officer shall deliver to BMT
a certificate, dated as of the Closing Date, to the effect that as of the date of the certificate: (i) such financial statements continue
to reflect accurately the financial condition of FSB in all material respects and the requirements of this Section 6.23 and (ii)
the calculation of Adjusted Tangible Common Equity continues to be accurate in all material respects and continues to conform to the
requirements of this Agreement.
6.24 Tax Matters.
None of FSB, any of its Subsidiaries, or BMT or any of its Subsidiary shall take any action that is intended or is reasonably likely
to result in the BMT Mergers failing to qualify as tax-free transfer to a controlled corporation under Section 351 of the Code. From
and after the date of this Agreement, each party hereto shall use commercially reasonable efforts to cause the Mergers to qualify as
a tax-free transfer under Section 351of the Code. Each of the parties agrees to prepare and file all U.S. federal income Tax Returns
in accordance with this Section 6.24 and shall not take any position inconsistent therewith in the course of any audit, litigation,
or other legal proceeding with respect to U.S. federal income Taxes.
6.25 Employment Agreements.
FSB and BMT agree to negotiate Employment Agreements for Martin A. Steele and Elliott Pierce to be completed, executed and delivered
by Closing.
6.26 Loan Due Diligence.
The parties agree that, prior to the Closing, BMT will be given the opportunity to conduct additional Loan due diligence on FSB’s
Loan portfolio including, but not limited to, being given access to any credit approval memoranda or similar loan summaries prepared
in connection with the 20 largest lending relationships.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE TRANSACTION
7.1 Conditions to
Each Party’s Obligation to Consummate the Mergers. The respective obligation of each of the parties hereto to consummate the
transactions contemplated hereby (the “Closing”) is subject to the fulfillment or, to the extent permitted by applicable
law, written waiver by the parties hereto prior to the Closing Date, of each of the following conditions:
(a) Regulatory Approvals.
All regulatory approvals required to consummate the transactions contemplated hereby, including but not limited to the Mergers, shall
have been obtained and shall remain in full force and effect and all statutory waiting periods in respect thereof shall have expired,
and no such approvals shall contain any conditions, restrictions or requirements which BMT reasonably determine in good faith would,
individually or in the aggregate, materially reduce the benefits of the transactions contemplated hereby to such a degree that BMT would
not have entered into this Agreement had such conditions, restrictions or requirements been known at the date hereof (any such condition,
restriction or requirement, a “Burdensome Condition”).
(b) No Injunction.
No Governmental Authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation,
judgment, decree, injunction or other order (whether temporary, preliminary or permanent) which is in effect and prohibits or makes illegal
consummation of the transactions contemplated hereby.
(c) Corporate Approvals.
This Agreement, the Mergers and the transactions contemplated herein shall have been duly approved by (i) the FSB Board, (ii) the
Requisite FSB Vote, (iii) the BMT Board and (iv) the Requisite FSB Vote.
(d) Exchange Act Registrations.
The FSB Common Stock and the Assumed Warrants shall be registered with the FDIC under the Exchange Act as of the Effective Time, subject
to the effectiveness of the Closing.
(e) Selected Exchange
Listing. The FSB Common Stock and the Assumed Warrants shall be listed and authorized for trading on the Selected Exchange as of
the Effective Times, subject to the effectiveness of the Closing.
(f) Capital Raise.
The Capital Raise shall have been consummated or be capable of being consummated substantially concurrently with the Closing.
7.2 Conditions to
Obligations of FSB. The obligations of FSB, Intermediate Merger Sub and BMT Merger Sub to consummate the transactions contemplated
hereby are also subject to the fulfillment or written waiver by FSB prior to the Closing Date of each of the following conditions:
(a) Representations
and Warranties. The representations and warranties of BMT set forth in this Agreement shall be true and correct as of the date of
this Agreement and as of the Closing Date as though made on and as of the Closing Date (except that representations and warranties that
by their terms speak as of the date of this Agreement or some other date shall be true and correct as of such date), except where the
failure to be so true and correct (without giving effect to any limitation as to “materiality” or “Material Adverse
Effect” set forth therein), individually or in the aggregate, has not had and would not reasonably be expected to have a Material
Adverse Effect; provided that the representations and warranties of BMT set forth in the first sentence of Section 5.3(a),
Section 5.3(c)(i), Section 5.3(g)(A) and Section 5.3(m). shall be true and correct as of such dates in all respects,
except, with respect to Section 5.3(e), for any de minimis inaccuracy, and FSB shall have received a certificate or certificates,
dated as of the Closing Date, signed on behalf of BMT by the Chief Executive Officer and the Chief Financial Officer of BMT, to such
effect.
(b) Performance of
Obligations of BMT. BMT shall have performed in all material respects all obligations required to be performed by it under this Agreement
at or prior to the Closing Date, and FSB shall have received a certificate or certificates, dated as of the Closing Date, signed on behalf
of BMT by the Chief Executive Officer and the Chief Financial Officer of BMT, to such effect.
(c) No Material Adverse
Effect. There shall not have occurred any event, circumstance, change, occurrence or state of facts that, individually or in the
aggregate with all such other events, circumstances, changes occurrences or states of facts, has resulted in or would reasonably be expected
to result in, a Material Adverse Effect on BMT.
(d) Tax Opinion.
FSB shall have received the opinion of Nelson Mullins Riley & Scarborough LLP, in form and substance reasonably satisfactory to FSB,
dated as of the Closing Date, to the effect that, on the basis of facts, representations and assumptions set forth or referred to in
such opinion, the Mergers will qualify as a tax-free transfer to a controlled corporation under Section 351 of the Code. In rendering
such opinion, counsel may require and rely upon representations contained in certificates of officers of BMT, FSB, Intermediate Merger
Sub and BMT Merger Sub.
(e) Other Actions.
BMT shall have furnished FSB with such certificates of their respective officers or others and such other documents to evidence fulfillment
of the conditions set forth in Section 7.1 and Section 7.2 as FSB may reasonably request.
7.3 Conditions to
Obligation of BMT. The obligations of BMT to consummate the Merger and the other transactions contemplated hereby is also subject
to the fulfillment or written waiver by BMT prior to the Closing Date of each of the following conditions:
(a) Representations
and Warranties. The representations and warranties of FSB set forth in this Agreement shall be true and correct as of the date of
this Agreement and as of the Closing Date as though made on and as of the Closing Date (except that representations and warranties that
by their terms speak as of the date of this Agreement or some other date shall be true and correct as of such date), except where the
failure to be so true and correct (without giving effect to any limitation as to “materiality” or “Material Adverse
Effect” set forth therein), individually or in the aggregate, has not had and would not reasonably be expected to have a Material
Adverse Effect, provided that the representations and warranties of FSB set forth in the first sentence of Section 5.2(a),
Section 5.2(b), Section 5.2(e)(i), Section 5.2(g)(A) and Section 5.2(n) shall be true and correct as of such
dates in all respects (except, with respect to Section 5.2(b), for any de minimis inaccuracy), and BMT shall have
received a certificate, dated as of the Closing Date, signed on behalf of FSB by the Chief Executive Officer and the Chief Financial
Officer of FSB, to such effect.
(b) Performance of
Obligations of FSB and BMT Merger Sub. Each of FSB and BMT Merger Sub shall have performed in all material respects all obligations
required to be performed by it under this Agreement at or prior to the Closing Date, and BMT shall have received a certificate, dated
as of the Closing Date, signed on behalf of FSB by the Chief Executive Officer and the Chief Financial Officer of FSB, to such effect.
(c) Estoppel Letters
and Consents. FSB shall have delivered fully executed estoppel letters and Consents as provided in Section 6.12.
(d) FIRPTA Certificate.
FSB shall have delivered to BMT a properly executed statement from FSB that meets the requirements of Treasury Regulations Sections 1.1445-2(c)(3)
and 1.897-2(h)(1), dated as of the Closing Date and in form and substance satisfactory to BMT.
(e) No Material Adverse
Effect. There shall not have occurred any event, circumstance, change, occurrence or state of facts that, individually or in the
aggregate with all such other events, circumstances, changes occurrences or states of facts, has resulted in or would reasonably be expected
to result in, a Material Adverse Effect on FSB.
(f) Tax Opinion.
BMT shall have received the opinion of Nelson Mullins Riley & Scarborough LLP, in form and substance reasonably satisfactory to BMT,
dated as of the Closing Date, to the effect that, on the basis of facts, representations and assumptions set forth or referred to in
such opinion, the Mergers will qualify as a tax-free transfer to a controlled corporation under Section 351 of the Code. In rendering
such opinion, counsel may require and rely upon representations contained in certificates of officers of BMT, FSB, Intermediate Merger
Sub and BMT Merger Sub reasonably satisfactory in form and substance to such counsel.
(g) New FSB Articles.
FSB shall have filed the New FSB Articles with the WDFI and the Secretary of State of the State of Washington, and they shall be effective
for all purposes under the WBCA and the WCBA.
(h) Allowance for Loan
Losses. FSB’s general allowance for loan losses, as determined in accordance with GAAP and regulatory accounting principles
(as applied by FSB in its audited financials for the year ended December 31, 2021) shall be not less than $1,491,205, as determined as
of the last day of the month immediately preceding the Closing Date (or, if the Closing Date occurs prior to the fifth Business Day of
the month, the last day of the second month immediately preceding the Closing Date).
(i) Employment Agreements.
FSB shall have entered into employment agreements or change in control agreements with those employees of FSB as BMT may specify by written
notice to FSB provided not later than March 31, 2022, such employment agreements or change in control agreements (i) to be in forms provided
by BMT, (ii) to become effective at the Effective Time, subject to the Closing, and without payment or accrual of any severance, change
of control or similar payments or amounts and (iii) shall replace any existing employment or change in control agreements with such employees.
(j) Other Actions.
FSB shall have furnished BMT with such certificates of its officers or others and such other documents to evidence fulfillment of the
conditions set forth in Section 7.1 and Sections 7.3 as BMT may reasonably request.
(k) Deferred Tax Asset.
FSB’s deferred tax asset of at least $1,640,385 shall appear on FSB’s most recent FSB Financial Statements following the
date of this Agreement; provided, however, if the amount of the deferred tax asset recorded on such financial statements is less
than $1,640,385, up to $0.22 of the FSB Merger Consideration payable pursuant to Section 3.1(b) to holders of FSB Common
Stock shall be proportionately reduced to the extent that the deferred tax asset is less than $1,640,385. For avoidance of doubt, for
example, if the deferred tax asset is only $820,417.50, then the FSB Merger Consideration will be reduced by $0.11 per share to $7.11
per share, subject to possible further adjustment as described in the definition of FSB Merger Consideration.
ARTICLE VIII
TERMINATION
8.1 Termination.
This Agreement may be terminated, and the transactions contemplated hereby may be abandoned, at any time prior to the Effective Times:
(a) Mutual Consent.
By the mutual consent in writing of BMT and FSB.
(b) Breach.
(i) By FSB, if FSB is
not in material breach of any of the terms of this Agreement, in the event of a material breach by BMT of any representation, warranty,
covenant or agreement contained herein, which breach (A) cannot be cured without material delay to the transaction or has not been
cured, or the breaching party has not commenced to cure such breach, within 20 Business Days after the giving of written notice to the
breaching party or parties of such breach, and (B) would entitle FSB not to consummate the transactions contemplated hereby under
Section 7.2(a) or Section 7.2(b).
(ii) By BMT, if BMT
is not in material breach of any of the terms of this Agreement, in the event of a material breach by FSB of any representation, warranty,
covenant or agreement contained herein, which breach (A) cannot be cured without material delay to the transaction or has not been
cured, or the breaching party has not commenced to cure such breach, within 20 Business Days after the giving of written notice to the
breaching party or parties of such breach, and (B) would entitle BMT not to consummate the transactions contemplated hereby under
Section 7.2(a) or Section 7.2(b).
(c) Delay. By BMT,
on the one hand, or FSB, on the other hand, in the event that the Merger is not consummated by December 31, 2022, except to the extent
that the failure of the Merger to be consummated by such date shall be due to the failure of the party or parties seeking to terminate
pursuant to this Section 8.1(c) to perform or observe the covenants and agreements of such party or parties set forth in
this Agreement.
(d) No Regulatory Approval.
(i) By BMT, on the one hand, or FSB, on the other hand, in the event the approval of any Governmental Authority required for consummation
of the transactions contemplated hereby shall have been denied by final nonappealable action of such Governmental Authority or an application
therefor shall have been permanently withdrawn at the request of a Governmental Authority, or (ii) by BMT in the event the approval of
any Governmental Authority required for consummation of the transactions contemplated hereby will not be granted without the imposition
of a Burdensome Condition; provided, however, that BMT shall not have the right to terminate this Agreement pursuant to
this Section 8.1(d)(ii) if such denial shall be due to the failure of BMT to perform or observe the covenants of such party or
parties set forth herein. If either Party terminates this Agreement pursuant to this Section 8.1(d), no Termination Fee as
provided in Section 8.2(b) or Section 8.2(c) shall be due.
(e) Breach of No Solicitation
or Negotiation. By BMT, if FSB shall have breached the covenants contained in Article VII above.
(f) FSB Change of Recommendation.
By BMT if the FSB Board shall have (i) failed to make, or altered or modified, its favorable recommendation of this Agreement to
FSB shareholders in a manner adverse to BMT and the Requisite FSB Vote is not obtained at the FSB Meeting, (ii) recommended, endorsed,
accepted or agreed to an Acquisition Proposal, (iii) failed to call, give notice of, convene and hold the FSB Meeting in accordance with
Section 6.7, or (iv) resolved to do any of the foregoing; provided, however, that nothing in this Section 8.1(f)
shall affect the obligations of FSB under Section 6.5 and Section 6.7 above.
(g) BMT Change of Recommendation.
By FSB if the BMT Board shall have (i) failed to make, or altered or modified, its favorable recommendation of this Agreement to BMT
stockholders in a manner adverse to FSB and the Requisite BMT Vote is not obtained at the BMT Meeting, (ii) recommended, endorsed, accepted
or agreed to an Acquisition Proposal, (iii) failed to call, give notice of, convene and hold the BMT Meeting in accordance with Section
6.7, or (iv) resolved to do any of the foregoing; provided, however, that nothing in this Section 8.1(g)
shall affect the obligations of BMT under Section 6.5 and Section 6.7.
(h) Notice of Termination.
In the event a party elects to effect any termination pursuant to Section 8.1(b) through Section 8.1(g) above, it
shall give written notice to the other parties hereto specifying the basis for such termination.
8.2 Effect of Termination.
(a) In the event of termination
of this Agreement by either FSB or BMT as provided in Section 8.1, this Agreement shall forthwith become void and have no effect,
and none of FSB, BMT, any of their respective Subsidiaries or any of the officers or directors of any of them shall have any liability
of any nature whatsoever hereunder, or in connection with the transactions contemplated hereby, except that (i) Section 6.3, Section 6.3,
this Section 8.2 and Article IX shall survive any termination of this Agreement, and (ii) notwithstanding anything to the
contrary contained in this Agreement, neither FSB nor BMT shall be relieved or released from any liabilities or damages arising out of
its willful and material breach of any provision of this Agreement.
(b) (i) In the event that
after the date of this Agreement and prior to the termination of this Agreement, a bona fide Acquisition Proposal shall have been communicated
to or otherwise made known to the Board of Directors or senior management of BMT or shall have been made directly to the shareholders
of BMT or any person shall have publicly announced (and not withdrawn at least two business days prior to the BMT Meeting) an Acquisition
Proposal, in each case with respect to BMT and (A) (1) thereafter this Agreement is terminated by either FSB or BMT pursuant to Section
8.1(c) without the Requisite BMT Vote having been obtained (and all other conditions set forth in Section 7.1 and Section
7.3 were satisfied or were capable of being satisfied prior to such termination) or (2) thereafter this Agreement is terminated by
FSB pursuant to Section 8.1(b) as a result of a material breach, and (B) prior to the date that is 12 months after the date of
such termination, BMT enters into a definitive agreement or consummates a transaction with respect to an Acquisition Proposal (whether
or not the same Acquisition Proposal as that referred to above), then BMT shall, on the earlier of the date it enters into such definitive
agreement and the date of consummation of such transaction, pay FSB, by wire transfer of same-day funds, a fee equal to $1,000,000 (the
“Termination Fee”); provided, that for purposes of this Section 8.2(b)(i), all references in
the definition of Acquisition Proposal to “25%” shall instead refer to “50%.”
(ii) In the event that
a either FSB or BMT terminates this Agreement pursuant to Section 8.1(c) at such time, the condition in Section 7.1(f)
has not been satisfied and is not capable of being satisfied prior to such termination (and all other conditions set forth in Section
7.1 and Section 7.3 were satisfied or were capable of being satisfied prior to such termination) then BMT shall pay FSB the
Termination Fee by wire transfer of same-day funds.
(iii) In the event that
this Agreement is terminated by FSB pursuant to Section 8.1(g), then BMT shall pay FSB, by wire transfer of same-day funds, the
Termination Fee within two business days of the date of termination.
(c) (i) In the event that
after the date of this Agreement and prior to the termination of this Agreement, a bona fide Acquisition Proposal shall have been communicated
to or otherwise made known to the Board of Directors or senior management of FSB or shall have been made directly to the shareholders
of FSB or any person shall have publicly announced (and not withdrawn at least two business days prior to the FSB Meeting) an Acquisition
Proposal, in each case with respect to FSB and (A) (1) thereafter this Agreement is terminated by either FSB or BMT pursuant to Section
8.1(c) without the Requisite FSB Vote having been obtained (and all other conditions set forth in Section 7.1 and Section
7.2 were satisfied or were capable of being satisfied prior to such termination) or (2) thereafter this Agreement is terminated by
BMT pursuant to Section 8.1(d) as a result of a material breach, and (B) prior to the date that is 12 months after the date of
such termination, FSB enters into a definitive agreement or consummates a transaction with respect to an Acquisition Proposal (whether
or not the same Acquisition Proposal as that referred to above), then FSB shall, on the earlier of the date it enters into such definitive
agreement and the date of consummation of such transaction, pay BMT the Termination Fee by wire transfer of same-day funds; provided,
that for purposes of this Section 8.2(c)(i), all references in the definition of Acquisition Proposal to “25%”
shall instead refer to “50%.”
(ii) In the event that
this Agreement is terminated by BMT pursuant to Section 8.1(e), then FSB shall pay BMT, by wire transfer of same-day funds, the
Termination Fee within two (2) business days of the date of termination.
(d) Notwithstanding anything
to the contrary herein, but without limiting the right of any party to recover liabilities or damages (including, but not limited to
its transaction fees and expenses) to the extent permitted herein, in no event shall either party be required to pay the Termination
Fee more than once.
(e) Each of FSB and BMT
acknowledges that the agreements contained in this Section 8.2 are an integral part of the transactions contemplated by this Agreement,
and that, without these agreements, the other party would not enter into this Agreement; accordingly, if FSB or BMT, as the case may
be, fails promptly to pay the amount due pursuant to this Section 8.2, and, in order to obtain such payment, the other party commences
a suit which results in a judgment against the non-paying party for the Termination Fee or any portion thereof, such non-paying party
shall pay the costs and expenses of the other party (including attorneys’ fees and expenses) in connection with such suit. In addition,
if FSB or BMT, as the case may be, fails to pay the amounts payable pursuant to this Section 8.2, then such party shall pay interest
on such overdue amounts at a rate per annum equal to the “prime rate” published in The Wall Street Journal on the
date on which such payment was required to be made for the period commencing as of the date that such overdue amount was originally required
to be paid and ending on the date that such overdue amount is actually paid in full.
ARTICLE IX
MISCELLANEOUS
9.1 Survival of Representations,
Warranties and Agreements. No representations, warranties, covenants and agreements of the parties hereto set forth in this Agreement
shall survive the Effective Times (other than agreements or covenants contained herein that by their terms are to be performed in whole
or in part after the Effective Times) or the termination of this Agreement if this Agreement is terminated prior to the Effective Time
(other than this Article IX, Section 6.4(f) and Section 8.2, which shall survive such termination).
9.2 Waiver; Amendment.
Prior to the Effective Times, any provision of this Agreement may be (a) waived, by the party benefited by the provision or (b) amended
or modified at any time, by an agreement in writing among the parties hereto executed in the same manner as this Agreement.
9.3 Counterparts.
This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each of the parties and delivered to the other parties, it being understood that each
party need not sign the same counterpart.
9.4 Governing Law; Jurisdiction.
This Agreement shall be governed by, and interpreted in accordance with, the laws of the State of Delaware applicable to contracts made
and entirely to be performed within such state, without regard to any applicable conflicts of law principles that would require the application
of the laws of any other jurisdiction. The parties hereto agree that any suit, action or proceeding brought by either party to enforce
any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in any federal
or state court located in the State of Delaware. Each of the parties hereto submits to the jurisdiction of any such court in any suit,
action or proceeding seeking to enforce any provision of, or based on any matter arising out of, or in connection with, this Agreement
or the transactions contemplated hereby and hereby irrevocably waives the benefit of jurisdiction derived from present or future domicile
or otherwise in such action or proceeding. Each party hereto irrevocably waives, to the fullest extent permitted by law, any objection
that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such
suit, action or proceeding brought in any such court has been brought in an inconvenient forum.
9.5 Waiver of Jury Trial.
Each party hereto acknowledges and agrees that any controversy that may arise under this Agreement is likely to involve complicated and
difficult issues, and therefore each party hereby irrevocably and unconditionally waives any right such party may have to a trial by
jury in respect of any litigation, directly or indirectly, arising out of, or relating to, this Agreement, or the transactions contemplated
by this Agreement. Each party certifies and acknowledges that (a) no representative, agent or attorney of any other party has represented,
expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver, (b) each
party understands and has considered the implications of this waiver, (c) each party makes this waiver voluntarily, and (d) each
party has been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section
9.5.
9.6 Expenses. Except
as otherwise provided for in Section 8.2, each party hereto will bear all expenses incurred by it in connection with this Agreement
and the transactions contemplated hereby, including fees and expenses of its own financial consultants, accountants and counsel, provided
that nothing contained herein shall limit either party’s rights to recover any liabilities or damages arising out of the other
party’s fraud or willful breach of any provision of this Agreement.
9.7 Notices. All notices,
requests and other communications hereunder to a party shall be in writing and shall be delivered in person, mailed by registered or
certified mail (return receipt requested), or sent by e-mail, facsimile, courier or personal delivery to such party at its address set
forth below or such other address as such party may specify by notice to the parties hereto.
If to BMT:
BM Technologies, Inc.
201 King of Prussia Road, Suite 350
Wayne, Pennsylvania 19087
Attention: Luvleen Sidhu, Chief Executive Officer
Facsimile:
E-mail: lsidhu@bmtx.com
With a copy to:
Nelson Mullins Riley & Scarborough LLP
101 Constitution Avenue, NW, Suite 900
Washington, DC 20001
Attention: Jonathan H. Talcott and E. Peter Strand
Facsimile: (202) 689-2860
E-Mail: jon.talcott@nelsonmullins.com and peter.strand@nelsonmullins.com
If to FSB, Intermediate Merger Sub,
or BMT Merger Sub:
First Sound Bank
925 Fourth Avenue, No. 2350
Seattle, Washington 98104
Attention: Marty A. Steele, President and CEO
Facsimile:
E-mail: msteele@firstsoundbank.com
With a copy to:
Keller Rohrback L.L.P.
1201 Third Avenue, Suite 3200
Seattle, Washington 98101
Attention: Thomas A. Sterken and Glen P. Garrison
Facsimile: (206) 623-3384
E-mail: tsterken@kellerrohrback.com and ggarrison@kellerrohrback.com
9.8 Entire Understanding;
No Third-Party Beneficiaries. This Agreement, the Non-Solicitation and Confidentiality Agreements, and the Support Agreements, and
the Disclosure Schedules, represent the entire understanding of the parties hereto and thereto with reference to the transactions contemplated
hereby, and this Agreement, the Non-Solicitation and Confidentiality Agreements, and the Support Agreements supersede any and all other
oral or written agreements heretofore made. Nothing in this Agreement, expressed or implied, is intended to confer upon any Person, other
than the parties hereto or their respective successors any rights, remedies, obligations or liabilities under or by reason of this Agreement.
9.9 Severability. If
any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction
to be invalid, void or unenforceable, the remaining provisions, 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 will in no way be affected,
impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in
any manner materially adverse to any party hereto. Upon such determination, the parties will negotiate in good faith in an effort to
agree upon a suitable and equitable substitute provision to effect the original intent of the parties.
9.10 Enforcement of the
Agreement. The parties hereto 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 or were otherwise breached. It is accordingly agreed that the parties shall
be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which they are
entitled at law or in equity. In the event attorneys’ fees or other costs are incurred to secure performance of any of the obligations
herein provided for, or to establish damages for the breach thereof, or to obtain any other appropriate relief, whether by way of prosecution
or defense, the prevailing party shall be entitled to recover reasonable attorneys’ fees and costs incurred therein.
9.11 Waiver of Conditions.
The conditions to each of the parties’ obligations to consummate the Mergers 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 laws.
9.12 Interpretation.
When a reference is made in this Agreement to Sections, Annexes or Schedules, such reference shall be to a Section of, or Annex or Schedule
to, this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes
only and are not part of this Agreement. Whenever the words “include,” “includes” or “including”
are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” Whenever the words “as
of the date hereof” are used in this Agreement, they shall be deemed to mean the day and year first above written.
9.13 Assignment. No
party may assign either this Agreement or any of its rights, interests or obligations hereunder without the prior written approval of
the other parties. Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns.
9.14 Alternative Structure.
BMT and FSB shall be empowered, upon their mutual agreement, at any time prior to the Effective Times, to change the method or structure
of effecting the transactions contemplated by this Agreement (including the provisions of Article I), if and to the extent they both
deem such change to be necessary, appropriate or desirable; provided, that no such change shall (a) alter or change the
Exchange Ratio or the number of shares of FSB Common Stock received by holders of BMT Common Stock in exchange for each share of BMT
Common Stock, (b) adversely affect the qualification of the BMT Merger as a tax-free transfer to a controlled corporation under Section
35 of the Code, or (c) materially impede or delay the consummation of the transactions contemplated by this Agreement in a timely manner.
The parties agree to reflect any such change in an appropriate amendment to this Agreement executed by both parties in accordance with
Section 9.2.
[signature page follows]
IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed in counterparts by their duly authorized officers, all as of the day and
year first above written.
BM TECHNOLOGIES,
INC.
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FIRST SOUND BANK
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/s/
Luvleen Sidhu
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/s/
Martin A. Steele
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By:
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Luvleen Sidhu
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By:
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Martin A. Steele
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Its:
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Chief Executive Officer
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Its:
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President and Chief Executive Officer
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Following its organization and adoption
of this Agreement pursuant to Section 6.20:
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BMSF BMT MERGER
SUBSIDIARY, INC.
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FSB INTERMEDIATE
MERGER SUBSIDIARY, INC.
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/s/
Luvleen Sidhu
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/s/
Martin A. Steele
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By:
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Luvleen Sidhu
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By:
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Martin A. Steele
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Its:
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Chief Executive Officer
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Its:
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Chief Executive Officer
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Annex A
NON-SOLICITATION AND CONFIDENTIALITY
AGREEMENT
This Non-Solicitation and
Confidentiality Agreement (this “Agreement”), dated as of November [●], 2021, is made by and among BM Technologies,
Inc., a Delaware corporation (“BMT”), First Sound Bank, a Washington state-chartered bank (“FSB”),
and the undersigned key employee or director (“Representative”) of FSB.
WHEREAS, BMT and FSB are
entering into an Agreement and Plan of Reorganization and Merger, dated as of the date hereof (including all annexes, exhibits and schedules
thereto, and as it may be amended, the “Merger Agreement”), pursuant to which (i) a newly-organized subsidiary
of FSB, FSB Intermediate Merger Subsidiary, Inc., (“Intermediate Merger Sub”) will merge with and into FSB, and (ii) a
newly-organized subsidiary of Intermediate Merger Sub, BMT Merger Subsidiary, Inc. will merge with and into BMT, on the terms and conditions
set forth therein (the “Mergers”) and, in connection therewith, all holders of outstanding shares of FSB Common Stock
will be entitled to receive the cash merger consideration and the holders of the BMT Common Stock will exchange their shares for newly-issued
shares of FSB Common Stock with respect thereto in the manner set forth in the Merger Agreement. Unless otherwise indicated, capitalized
terms used and not defined herein shall have the meanings set forth in the Merger Agreement.
WHEREAS, Representative is
a key employee or director of FSB, and, as a result, Representative has a material interest in the consummation of the Mergers.
WHEREAS, in order to induce
BMT to enter into the Merger Agreement and consummate the transactions contemplated there under including Mergers, Representative has
agreed to enter into and perform this Agreement.
NOW, THEREFORE, in consideration
of the transactions contemplated by the Merger Agreement and the benefits to be derived, directly or indirectly, by Representative under
the Merger Agreement, and in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the
receipt, sufficiency and adequacy of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:
1. Acknowledgments by Representative;
Support.
(a) Representative acknowledges
that, by virtue of his or her positions with FSB, he or she has developed considerable expertise in the business operations of FSB and
has access to extensive confidential information with respect to FSB and has access to Trade Secrets (as defined below). Representative
recognizes that BMT could be irreparably damaged if Representative were to (i) disclose or make unauthorized use of any Trade Secrets;
(ii) take certain actions relative to employees of FSB; or (iii) solicit current or prospective clients, customers, suppliers, agents
or certain other Persons. Accordingly, Representative expressly acknowledges that he or she is voluntarily entering into this Agreement
and that the terms and conditions of this Agreement are fair and reasonable to Representative in all respects.
(b) Representative agrees during
the Applicable Period (as defined below) to support and refrain from (a) disparaging the goodwill of BMT, (b) harming the customer
and client relationships of BMT, and (c) disparaging the business or banking reputation of BMT. For purposes of this Agreement,
“Applicable Period” shall mean the period commencing on the Effective Time and ending on the later of: (i) two (2)
years from and after the Effective Time, or (ii) one (1) year from and after the date on which Representative is no longer a director
or employee of BMT.
2. Confidentiality; Trade
Secrets.
(a) Other than for the benefit
of FSB or BMT, Representative (i) shall make no use of Trade Secrets, or any part thereof, (ii) shall not disclose Trade Secrets,
or any part thereof, to any other Person, and (iii) shall, upon the request of BMT, deliver all documents, reports, drawings, designs,
plans, proposals and other tangible evidence of Trade Secrets now possessed or hereafter acquired by Representative, to BMT. For purposes
of this Agreement, “Trade Secrets” shall mean all secrets and other confidential information, ideas, knowledge, know-how,
techniques, secret processes, improvements, discoveries, methods, inventions, sales information, financial information, customers, lists
of customers and prospective customers, broker lists, potential brokers, rate sheets, plans, concepts, strategies or products, as well
as all documents, reports, drawings, designs, plans, and proposals otherwise pertaining to same, with respect to FSB, plus any non-public
personal information on any present or past customer or client of FSB. Notwithstanding the foregoing, “Trade Secrets”
shall not include any (i) information which is or has become available from an independent third party who learned the information independently
and who is not known to Representative upon due inquiry to be bound by a confidentiality agreement with respect to such information;
or (ii) information readily ascertainable from public, trade or other non-confidential sources (other than as a result, directly
or indirectly, of disclosure or other dissemination in violation of an obligation or duty of confidentiality).
(b) Notwithstanding any provision
of this Agreement to the contrary, Representative may disclose or reveal any information, whether including in whole or part any Trade
Secrets, that:
(i) Representative is required
to disclose or reveal under any applicable law or regulation, provided Representative makes a good faith request that the confidentiality
of the Trade Secrets be preserved and, to the extent not prohibited by applicable laws and regulations, gives BMT prompt advance notice
of such requirement.
(ii) Representative is otherwise
required to disclose or reveal by any governmental entity, provided Representative makes a good faith request that the confidentiality
of the Trade Secrets be preserved and, to the extent not prohibited by applicable laws and regulations, gives BMT prompt advance notice
of such requirement.
(iii) Upon the advice of
Representative’s legal counsel, Representative is compelled to disclose or else stand liable for contempt or suffer other censure
or penalty imposed by any governmental entity, provided Representative makes a good faith request that the confidentiality of the Trade
Secrets be preserved and, to the extent not prohibited by applicable laws and regulations, gives BMT prompt advance notice of such requirement.
(c) Pursuant to 18 U.S.C. 1833(b),
an individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade
secret that (A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an
attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or
other document filed in a lawsuit or other proceeding, if such filing is made under seal. Further, an individual who files a lawsuit
for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual
and use the trade secret information in the court proceeding, if the individual (A) files any document containing the trade secret under
seal; and (B) does not disclose the trade secret, except pursuant to court order.
(d) Representative acknowledges
and agrees that any and all trade names and styles used by FSB, including, but not limited to, the term “First Sound Bank,”
and all trademarks, visual designs and logos under which FSB did business (collectively, the “Marks”), are valuable
trade names and service marks, the ownership of which will remain with BMT upon the Merger. The undersigned agrees that use by any entity,
other than BMT, of the Marks in the counties set forth on Exhibit A hereto (the “Restricted Territory”) would both
cause public and customer confusion, and dilute the value of BMT’s investment. Therefore, the undersigned unconditionally agrees
that during the Applicable Period, he or she will not enter into any business arrangement or agreement, whether formal or informal, directly
or indirectly, where the term “First Sound Bank” or any other Mark, is used for the purpose of doing business as a Financial
Services provider, or in connection with the sale, promotion or marketing of Financial Services to the public in the Restricted Territory.
3. Non-Solicitation.
(a) In order that BMT may have
and enjoy the full benefit of ownership of FSB and the business each conducts, including its goodwill, following the Effective Times
of the Mergers, Representative agrees that during the Applicable Period, he or she shall not, directly or indirectly, without the prior
written consent of BMT, on behalf of any Financial Institution, solicit or aid in the solicitation of Customers or Prospective Customers
for Financial Services or induce or attempt to induce any Person who is a Customer, Prospective Customer, supplier, distributor, officer
or employee of BMT or FSB prior to the Effective Times to terminate, reduce or alter such person’s relationships with, or to take
any action that would be disadvantageous to, BMT or FSB. Nothing contained in this Section 3 is intended to prohibit general advertising
or general solicitation not specifically directed at employees or customers of FSB or BMT.
(b) As used in this Agreement,
the following terms shall have the meanings set forth:
“Customer”
shall mean any Person with whom FSB has a relationship for Financial Services (as defined below) at any time from the date of the Merger
Agreement until immediately prior to the Effective Time of the Merger.
“Financial Institution”
shall mean a “depository institution” as that term is defined in 12 C.F.R. Section 348.2 and any parent, subsidiary
or affiliate thereof, and shall also include any state chartered commercial bank, savings bank, trust company, savings and loan association,
industrial loan company, or credit union, and any commercial lender (including a lender making loans secured by accounts, real estate
or any other collateral) of any kind.
“Financial Services”
shall mean the origination, purchasing, selling and servicing of commercial, real estate, residential, construction, SBA and consumer
loans, the provision of inventory financing and/or the solicitation and provision of deposit and investment services and services related
thereto.
“Prospective Customer”
shall mean any Person with whom FSB has actively pursued a relationship for Financial Services at any time within the last twelve months
prior to the Effective Time of the Merger; provided, however, that general solicitation for business by FSB, such as through television
or media advertising or community outreach efforts, does not constitute active pursuit of a relationship.
4. Release.
(a) Representative acknowledges
that he or she is aware of no existing claim or defense, personal or otherwise, or rights of set off whatsoever that Representative has
against FSB and/or BMT, except as expressly provided herein. For and in consideration of the consummation of the Mergers and the other
transactions contemplated by the Merger Agreement, Representative, for himself or herself and on behalf of his or her heirs and assigns
(the “Releasing Parties”), releases, acquits and forever discharges FSB and BMT and their respective predecessors,
successors, assigns, officers, directors, employees, agents and servants, attorneys and accountants, and all persons, natural or corporate,
in privity with them or any of them, from any and all known claims or causes of action of any kind whatsoever, at common law, statutory
or otherwise, which the Releasing Parties, or any of them, has now existing or that may hereafter arise in respect of any and all agreements
and obligations incurred on or prior to the date of this Agreement, or in respect of any event occurring or circumstances existing on
or prior to the date of this Agreement; provided, however, that FSB and BMT shall not be released from: (a) any obligations to
Representative under or arising out of this Agreement or the Merger Agreement; (b) any vested rights that Representative has with respect
to any benefit or equity or stock plan or agreement, and any rights Representative has as an equity or option holder of FSB; (c) any
claims of Representative arising out of Representative’s relationship as a depositor and/or borrower of FSB; and (d) any potential
claim for indemnification under the articles of incorporation or bylaws of FSB (in each case as in existence on the date of this Agreement)
for any matters arising in connection with Representative’s service as a director, officers or employee of FSB relating to acts,
circumstances, actions or omissions arising on or prior to the date of this Agreement to the extent such claims have not been asserted
or are not known to Representative (collectively, the “Excluded Claims”).
(b) Representative further
releases FSB and BMT from any unknown or unanticipated damages arising from the matters set forth in this Agreement (other than the Excluded
Claims).
(c) Representative shall execute
and deliver to BMT a release of Representative with the same provisions as set forth in Section 4 from the date of this Agreement through
the Effective Times if requested to do so by BMT at or after the Effective Times.
(d) It is expressly understood
and agreed that the terms hereof are contractual and not merely recitals, and that the agreements herein contained and the consideration
herein transferred is to compromise doubtful and disputed claims, and that no releases made or other consideration given hereby or in
connection herewith shall be construed as an admission of liability, all liability being expressly denied by FSB and BMT. Representative
hereby represents and warrants that the consideration hereby acknowledged for entering into this Agreement and the transactions contemplated
hereby is greater than the value of all claims, demands, actions and causes of action herein relinquished, released, renounced, abandoned,
acquitted, waived and/or discharged, and that this Agreement is in full settlement, satisfaction and discharge of any and all such claims,
demands, actions, and causes of action that Representative may have or be entitled to against FSB and BMT and its predecessors, assigns,
legal representatives, officers, directors, employees, attorneys and agents except as set forth in Section 4 hereof.
5. Independence of Obligations.
The covenants of Representative set forth in this Agreement shall be construed as independent of any other agreement or arrangement between
Representative, on the one hand, and FSB and BMT, on the other; and the existence of any claim or cause of action by Representative against
FSB or BMT shall not constitute a defense to the enforcement of such covenants against Representative.
6. Equitable Relief.
Representative acknowledges and agrees that irreparable injury could result to BMT in the event of a breach of any of the provisions
of this Agreement and that BMT will have no adequate remedy at law with respect thereto. Accordingly, in the event of a material breach
of this Agreement, and in addition to any other legal or equitable remedy BMT may have, BMT shall be entitled to the entry of a preliminary
injunction and a permanent injunction (including, without limitation, specific performance) by a court of competent jurisdiction, to
restrain the violation or breach thereof by Representative or any affiliates, agents or any other Persons acting for or with Representative
in any capacity whatsoever, and Representative submits to the jurisdiction of such court in any such action. In addition, after discussing
the matter with Representative, BMT shall have the right to inform any third party that BMT reasonably believes to be, or to be contemplating,
participating with Representative or receiving from Representative assistance in violation of this Agreement, of the terms of this Agreement
and of the rights of BMT hereunder, and that participation by any such Persons with Representative in activities in violation of Representative’s
agreement with BMT set forth in this Agreement may give rise to claims by BMT against such Person(s).
7. Extension of Term of
Restrictive Covenant. If Representative violates any restrictive covenant contained in Sections 1 through 3, and if any action to
specifically enforce or enjoin the violation of a restrictive covenant contained in Sections 1 through 3 is pending in a court of competent
jurisdiction, then the term of such restrictive covenant will be extended by adding to it the number of days that Representative’s
violation continues and the number of days during which such court action is pending only if and when the court grants specific performance
or injunctive relief to the party seeking such relief; provided, however, that the maximum aggregate number of days which may
be added to the term of the restrictive covenant as a result of the foregoing is 365 days. If there are both a violation and a pending
court action, then the number of days that each continues will be added to the term of such restrictive covenants, but days on which
both continue will be counted only once.
8. Termination. This
Agreement shall terminate automatically without further action in the event that the Merger Agreement is terminated prior to the Effective
Times in accordance with its terms. Unless sooner terminated under the immediately preceding sentence, the obligations of Representative
under Section 2(a) of this Agreement shall survive the termination of this Agreement, and the obligations of Representative under Sections
1(b), 2(d), and 3 of this Agreement shall terminate at the end of the Applicable Period.
9. Confidentiality.
Representative agrees (a) to hold any and all material non-public information regarding this Agreement, the Merger and the Merger Agreement
in strict confidence, and (b) not to divulge any material non-public information regarding this Agreement, the Mergers or the Merger
Agreement to any third person, until such time as the Mergers has been publicly announced by FSB and BMT, at which time Representative
may only divulge such information as has been publicly disclosed by FSB and BMT.
10. Entire Agreement.
This Agreement contains the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements,
written or oral, among the parties hereto with respect to the subject matter hereof. This Agreement may not be amended, supplemented
or modified, and no provisions hereof may be modified or waived, except by an instrument in writing signed by each party hereto. No waiver
of any provisions hereof by any party shall be deemed a waiver of any other provisions hereof by any such party, nor shall any such waiver
be deemed a continuing waiver of any provision hereof by such party.
11. Attorneys’ Fees.
If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled
to reasonable attorneys’ fees, costs and necessary disbursements, in addition to any other relief to which the prevailing party
is entitled.
12. Severability. If
any provision of this Agreement shall be held by a court of competent jurisdiction to be unreasonable as to duration, activity or subject,
it shall be deemed to extend only over the maximum duration, range of activities or subjects as to which such provision shall be valid
and enforceable under applicable law. If any provision of this Agreement shall, for any reason, be held by a court of competent jurisdiction
to be invalid, illegal or unenforceable, such invalidity, illegality or unenforceability shall not affect any other provision of this
Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.
13. Notices. All notices,
requests, claims, demands or other communications hereunder shall be in writing and shall be deemed given when delivered personally,
upon receipt of a transmission confirmation if sent by telecopy or like transmission and on the next Business Day when sent by a reputable
overnight courier service to the parties at the following addresses (or at such other address for a party as shall be specified by like
notice):
If to BMT:
BM Technologies, Inc.
201 King of Prussia Road, Suite 350
Wayne, PA 19087
Attention: Luvleen Sidhu, Chief Executive
Officer
Facsimile: [●]
E-mail: [●]
With a copy to:
Nelson Mullins Riley & Scarborough
101 Constitution Avenue Northwest, Suite 900
Washington, DC 20001
Attention: Jonathan H. Talcott and E. Peter Strand
Facsimile: (646) 428 2610
E-Mail: jon.talcott@nelsonmullins.com and peter.strand@nelsonmullins.com
If to FSB:
First Sound Bank
925 4th Ave, No. 2350
Seattle, WA 98104
Attention: Marty A. Steele, President and CEO
Facsimile: [●]
E-mail: msteele@firstsoundbank.com
With a copy to:
Keller Rohrback L.L.P.
1201 Third Avenue, Suite 3200
Seattle, WA 98101
Attention: Thomas A. Sterken and Glen P. Garrison
Facsimile: (206) 623-3384
E-mail: tsterken@kellerrohrback.com and ggarrison@kellerrohrback.com
If to Representative, at
the address of Representative appearing on the signature page of this Agreement.
14. Binding Effect; Assignment.
This Agreement shall be binding upon and inure to the benefit of the parties hereto, the heirs and legal representatives of Representative
and the successors and assigns of FSB and BMT. Representative shall not be entitled to assign his or her obligations hereunder. FSB and
BMT and may each assign its rights under this Agreement to any Person or its/their affiliates.
15. Governing Law; Jurisdiction.
This Agreement shall be governed by, and interpreted in accordance with, the laws of the State of Delaware applicable to contracts made
and entirely to be performed within such state, without regard to any applicable conflicts of law principles that would require the application
of the laws of any other jurisdiction. Any dispute arising under or relating to this Agreement will be litigated in the state or federal
courts located in Delaware and the parties hereby consent to the exclusive jurisdiction of such courts.
16. Independent Review
and Advice. Representative represents and warrants that he or she has carefully read this Agreement; that Representative executes
this Agreement with full knowledge of the contents of this Agreement, the legal consequences thereof, and any and all rights which any
party may have with respect to the other parties; that Representative has had the opportunity to receive independent legal advice with
respect to the matters set forth in this Agreement and with respect to the rights and asserted rights arising out of such matters, and
that Representative is entering into this Agreement of Representative’s own free will. Representative expressly agrees that there
are no expectations contrary to this Agreement and no usage of trade or regular practice in the industry shall be used to modify this
Agreement. The parties agree that this Agreement shall not be construed for or against either party in any interpretation thereof.
17. Headings. The descriptive
headings of the Sections of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.
18. Execution and Counterparts.
Signatures sent by facsimile or electronically shall have the same force an effect as manual signed originals. This Agreement may be
executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one
or more counterparts have been signed by each party hereto and delivered to each party hereto.
[Signature page follows]
IN WITNESS WHEREOF,
the parties hereto have executed and delivered this Agreement as of the date first written above.
BM TECHNOLOGIES, INC.
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FIRST SOUND BANK
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REPRESENTATIVE
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Signature Page to Non-Solicitation
and Confidentiality Agreement
Exhibit A
Restricted Territory
The Restricted Territory shall be comprised of
the following counties located in the State of Washington:
King County.
Annex B
SUPPORT AGREEMENT
This Support Agreement (this
“Agreement”), dated as of November [●], 2021, is made by and among BM Technologies, Inc., a Delaware corporation
(“BMT”), First Sound Bank, a Washington state-chartered bank (“FSB”), and the undersigned shareholder
of FSB (“Shareholder”).
WHEREAS, BMT and FSB are
entering into an Agreement and Plan of Reorganization and Merger, dated as of the date hereof (including all annexes, exhibits and schedules
thereto, and as it may be amended, the “Merger Agreement”), pursuant to which (i) a newly-organized subsidiary
of FSB, FSB Intermediate Merger Subsidiary, Inc., (“Intermediate Merger Sub”) will merge with and into FSB, and (ii) a
newly-organized subsidiary of Intermediate Merger Sub, BMT Merger Subsidiary, Inc. will merge with and into BMT, on the terms and conditions
set forth therein (the “Mergers”) and, in connection therewith, all holders of outstanding shares of FSB Common Stock
will be entitled to receive the cash merger consideration and the holders of the BMT Common Stock will exchange their shares for newly-issued
shares of FSB Common Stock with respect thereto in the manner set forth in the Merger Agreement. Unless otherwise indicated, capitalized
terms used and not defined herein shall have the meanings set forth in the Merger Agreement.
WHEREAS, Shareholder owns
shares of FSB Common Stock (such shares, together with all shares of capital stock, if any, subsequently acquired by Shareholder during
the term of this Agreement, being referred to as the “Shares”), and, as a result, Shareholder has a material economic
interest in the consummation of the Merger.
WHEREAS, in order to induce
BMT and FSB to enter into the Merger Agreement and consummate the transactions contemplated therein including the Mergers, Shareholder
has agreed to enter into and perform this Agreement.
NOW, THEREFORE, for good
and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
1. Agreement to Vote Shares.
Shareholder agrees that at any meeting of the shareholders of FSB which relates to or may impact, either directly or indirectly, the
Mergers or the Merger Agreement, or in connection with any written consent of the shareholders of FSB, Shareholder shall:
(a)
appear at each such meeting or otherwise cause the Shares to be counted as present thereat for purposes of establishing a quorum;
and
(b)
vote (or cause to be voted), in person or by proxy, or deliver a written consent (or cause a consent to be delivered) covering,
all the Shares (whether acquired heretofore or hereafter) that are owned of record or beneficially by Shareholder or as to which Shareholder
has, directly or indirectly, the right to vote or direct the voting: (i) in favor of adoption and approval of the Merger Agreement, the
Mergers and any other transactions contemplated by the Merger Agreement; (ii) against any action or agreement submitted to the shareholders
for their approval or consent that could reasonably be expected to result in a breach of any covenant, representation or warranty or
any other obligation or agreement of FSB contained in the Merger Agreement or of Shareholder contained in this Agreement; and (iii) against
any Acquisition Proposal or any other action, agreement or transaction that is intended, or could reasonably be expected, to materially
impede, interfere or be inconsistent with, delay, postpone, discourage or materially and adversely affect consummation of the Merger
or the performance by Shareholder of Shareholder’s obligations under this Agreement.
2. Transfer of Shares.
(a) Prohibition on Transfers
of Shares; Other Actions. Shareholder hereby agrees that while this Agreement is in effect, Shareholder shall not, except with the
prior written approval of BMT and FSB, (i) sell, transfer, pledge, encumber, distribute by gift or donation, or otherwise dispose of
any of the Shares (or any securities convertible into or exercisable or exchangeable for Shares) or any interest therein, whether by
actual disposition, physical settlement or effective economic disposition through hedging transactions, derivative instruments or other
means, except for charitable gifts or donations where the recipient enters into a voting agreement binding the recipient to vote its
shares in the manner provided in Section 1 of this Agreement, (ii) enter into any agreement, arrangement or understanding with any Person,
or take any other action, that violates or conflicts with or could reasonably be expected to violate or conflict with Shareholder’s
representations, warranties, covenants and obligations under this Agreement, or (iii) take any other action that could reasonably be
expected to impair or otherwise adversely affect, in any material respect, Shareholder’s power, authority and ability to comply
with and perform his or her covenants and obligations under this Agreement.
(b) Transfer of Voting Rights.
Shareholder hereby agrees that while this Agreement is in effect, Shareholder shall not deposit any Shares in a voting trust or, other
than this Agreement, grant any proxy or enter into any voting agreement or similar agreement or arrangement with respect to any of the
Shares.
3. Representations and
Warranties of Shareholder. Shareholder represents and warrants to BMT and FSB that the following statements are true and correct
and not misleading:
(a) Capacity. Shareholder
has all requisite capacity and authority to enter into and perform his or her obligations under this Agreement.
(b) Binding Agreement.
This Agreement has been duly executed and delivered by Shareholder and constitutes the valid and legally binding obligation of Shareholder,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating
to or affecting creditors’ rights and to general equity principles.
(c) Non-Contravention.
The execution and delivery of this Agreement by Shareholder does not, and the performance by Shareholder of his or her obligations hereunder
and the consummation by Shareholder of the transactions contemplated hereby will not, violate or conflict with, or constitute a default
under, any agreement, instrument, contract or other obligation or any order, arbitration award, judgment or decree to which Shareholder
is a party or by which Shareholder is bound, or any statute, rule or regulation to which Shareholder is subject.
(d) Ownership. Except
as otherwise described in Appendix A or in connection with a charitable gift or donation as contemplated by Section 2(a), the
Shares are, and through the term of this Agreement will be, owned beneficially and of record solely by Shareholder. Shareholder has good
and marketable title to the Shares, free and clear of any lien, pledge, mortgage, security interest or other encumbrance. As of the date
hereof, Shareholder is the beneficial and record owner of the number of shares of FSB Common Stock set forth opposite Shareholder’s
name on the signature page hereto. Shareholder has and will have at all times during the term of this Agreement (i) sole voting power
and sole power to issue instructions with respect to the matters set forth in Section 1 hereof, (ii) sole power of disposition, and (iii)
sole power to agree to all of the matters set forth in this Agreement, in each case with respect to all of the Shares owned by Shareholder
on the date of this Agreement and all of the Shares hereafter acquired by Shareholder and owned beneficially or of record by it during
the term of this Agreement. For purposes of this Agreement, the term “beneficial ownership” shall be interpreted in accordance
with Rule 13d-3 under the Securities Exchange Act of 1934, as amended, provided that a Person shall be deemed to beneficially own any
securities which may be acquired by such Person pursuant to any agreement, arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise (irrespective of whether the right to acquire such securities is exercisable
immediately or only after the passage of time, including the passage of time within 60 days, the satisfaction of any conditions, the
occurrence of any event or any combination of the foregoing).
(e) Consents and Approvals.
Shareholder has taken all actions necessary to approve the actions contemplated by this Agreement. The execution and delivery of this
Agreement by Shareholder does not, and the performance by Shareholder of his or her obligations under this Agreement and the consummation
by him or her of the transactions contemplated hereby will not, require Shareholder to obtain any consent, approval, authorization or
permit of, or to make any filing with or notification to, any Governmental Authority.
(f) Absence of Litigation.
There is no suit, action, investigation or proceeding pending or, to the knowledge of Shareholder, threatened against or affecting Shareholder
or any of his or her affiliates before or by any Governmental Authority that could reasonably be expected to materially impair the ability
of Shareholder to perform his or her obligations hereunder or to consummate the transactions contemplated hereby on a timely basis.
4. No Solicitation.
Shareholder hereby agrees that during the term of this Agreement, Shareholder shall not, and shall not permit any investment banker,
financial advisor, attorney, accountant or other representative retained by Shareholder to, directly or indirectly, (a) take any of the
actions specified in Section 6.7(a) of the Merger Agreement, (b) agree to release, or release, any Person from any obligation under any
existing standstill agreement or arrangement relating to FSB, or (c) participate in, directly or indirectly, a “solicitation”
of “proxies” (as such terms are used in the rules of the Securities and Exchange Commission) or powers of attorney or similar
rights to vote, or seek to advise or influence any Person with respect to the voting of, any shares of FSB Common Stock in connection
with any vote or other action on any matter of a type described in Section 1(b) hereof, other than to recommend that shareholders of
FSB vote in favor of the adoption and approval of the Merger Agreement, the Mergers and the transactions contemplated by the Merger Agreement
and as otherwise expressly permitted by this Agreement or the Merger Agreement. Shareholder agrees immediately to cease and cause to
be terminated any activities, discussions or negotiations conducted before the date of this Agreement with any Persons other than FSB
with respect to any possible Acquisition Proposal and will take all necessary steps to inform any investment banker, financial advisor,
attorney, accountant or other representative retained by Shareholder of the obligations undertaken by Shareholder pursuant to this Section
4.
5. Notice of Acquisition
Proposals; Proposals Regarding Prohibited Transactions. Shareholder hereby agrees to notify BMT and FSB promptly (and in any event
within two (2) Business Days) in writing of the number of any additional shares of FSB Common Stock or other securities of FSB of which
Shareholder acquires beneficial or record ownership on or after the date hereof. Shareholder will promptly (within 24 hours) advise BMT
and FSB orally and in writing of the receipt of any Acquisition Proposal (or any inquiry which could lead to an Acquisition Proposal)
and keep BMT and FSB informed, on a current basis, of the continuing status thereof, including the terms and conditions thereof and any
changes thereto.
6. Specific Performance
and Remedies. Shareholder acknowledges that it will be impossible to measure in money the damage to BMT and FSB if Shareholder fails
to comply with the obligations imposed by this Agreement and that, in the event of any such failure, BMT and FSB will not have an adequate
remedy at law. Accordingly, Shareholder agrees that injunctive relief or other equitable remedy, in addition to remedies at law or in
damages, is the appropriate remedy of BMT and FSB for any such failure and will not oppose the granting of such relief on the basis that
BMT and FSB may have an adequate remedy at law. Shareholder agrees that Shareholder will not seek, and agree to waive any requirement
for, the securing or posting of a bond in connection with BMT or FSB seeking or obtaining such equitable relief.
7. Term of Agreement; Termination.
The term of this Agreement shall commence on the date hereof and terminate at the Effective Time. In the event the Mergers are not consummated
and the Merger Agreement is terminated in accordance with its terms (other than as a result of a breach of this Agreement), this Agreement
shall be null and void.
8. Stop Transfer Order.
In furtherance of this Agreement, Shareholder hereby authorizes and instructs BMT to instruct its transfer agent, if any, to enter a
stop transfer order with respect to all of the Shares for the period from the date hereof through the date this Agreement is terminated
in accordance with Section 7.
9. Confidentiality.
Shareholder agrees (a) to hold any and all material non-public information regarding this Agreement, the Mergers and the Merger Agreement
in strict confidence, and (b) not to divulge any material non-public information regarding this Agreement, the Mergers or the Merger
Agreement to any third person, until such time as the Merger has been publicly announced by BMT and FSB, at which time Shareholder may
only divulge such information as has been publicly disclosed by BMT and FSB.
10. Entire Agreement.
This Agreement contains the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements,
written or oral, among the parties hereto with respect to the subject matter hereof. This Agreement may not be amended, supplemented
or modified, and no provisions hereof may be modified or waived, except by an instrument in writing signed by each party hereto. No waiver
of any provisions hereof by any party shall be deemed a waiver of any other provisions hereof by any such party, nor shall any such waiver
be deemed a continuing waiver of any provision hereof by such party.
11. Attorneys’ Fees.
If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled
to reasonable attorneys’ fees, costs and necessary disbursements, in addition to any other relief to which the prevailing party
is entitled.
12. Severability. If
any provision of this Agreement or the application of such provision to any person or circumstances shall be held invalid or unenforceable
by a court of competent jurisdiction, such provision or application shall be unenforceable only to the extent of such invalidity or unenforceability,
and the remainder of the provision held invalid or unenforceable and the application of such provision to persons or circumstances, other
than the party as to which it is held invalid, and the remainder of this Agreement, shall not be affected.
13. Notices. All notices,
requests, claims, demands or other communications hereunder shall be in writing and shall be deemed given when delivered personally,
upon receipt of a transmission confirmation if sent by telecopy or like transmission and on the next Business Day when sent by a reputable
overnight courier service to the parties at the following addresses (or at such other address for a party as shall be specified by like
notice):
If to BMT:
BM Technologies, Inc.
201 King of Prussia Road, Suite 350
Wayne, PA 19087
Attention: Luvleen Sidhu, Chief Executive Officer
Facsimile: [●]
E-mail: [●]
With a copy to:
Nelson Mullins Riley & Scarborough
101 Constitution Avenue Northwest, Suite 900
Washington, DC 20001
Attention: Jonathan H. Talcott and E. Peter Strand
Facsimile: (646) 428 2610
E-Mail: jon.talcott@nelsonmullins.com and peter.strand@nelsonmullins.com
If to FSB:
First Sound Bank
925 4th Ave, No. 2350
Seattle, WA 98104
Attention: Marty A. Steele, President and CEO
Facsimile: [●]
E-mail: msteele@firstsoundbank.com
With a copy to:
Keller Rohrback L.L.P.
1201 Third Avenue, Suite 3200
Seattle, WA 98101
Attention: Thomas A. Sterken and Glen P. Garrison
Facsimile: (206) 623-3384
E-mail: tsterken@kellerrohrback.com and ggarrison@kellerrohrback.com
If to Shareholder, at the
address of Shareholder appearing on the signature page of this Agreement.
14. Assignment; Binding
Effect. No party may assign either this Agreement or any of its rights, interests or obligations hereunder without the prior written
approval of the other parties. Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
15. Governing Law; Jurisdiction.
This Agreement shall be governed by, and interpreted in accordance with, the laws of the State of Delaware applicable to contracts made
and entirely to be performed within such state, without regard to any applicable conflicts of law principles that would require the application
of the laws of any other jurisdiction. Any dispute arising under or relating to this Agreement will be litigated in the state or federal
courts located in Delaware and the parties hereby consent to the exclusive jurisdiction of such courts.
16. Independent Review
and Advice. Shareholder represents and warrants that Shareholder has carefully read this Agreement; that Shareholder executes this
Agreement with full knowledge of the contents of this Agreement, the legal consequences thereof, and any and all rights which any party
may have with respect to the other parties; that Shareholder has had the opportunity to receive independent legal advice with respect
to the matters set forth in this Agreement and with respect to the rights and asserted rights arising out of such matters, and that Shareholder
is entering into this Agreement of Shareholder’s own free will. Shareholder expressly agrees that there are no expectations contrary
to this Agreement and no usage of trade or regular practice in the industry shall be used to modify this Agreement. The parties agree
that this Agreement shall not be construed for or against either party in any interpretation thereof.
17. Headings. The descriptive
headings of the Sections of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.
18. Execution and Counterparts.
Signatures sent by facsimile or electronically shall have the same force an effect as manual signed originals. This Agreement may be
executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one
or more counterparts have been signed by each party hereto and delivered to each party hereto.
[Signature page follows]
IN WITNESS WHEREOF,
the parties hereto have executed and delivered this Agreement as of the date first written above.
BM TECHNOLOGIES, INC.
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FIRST SOUND BANK
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SHAREHOLDER
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Number of Shares Owned
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Signature Page to Support
Agreement
Appendix A
Exceptions to Representations:
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Check the
box if the following statement is applicable: The Shareholder is the joint beneficial
owner of the Shares, together with the Shareholder’s spouse.
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Check the box if
the following statement is applicable: The Shareholder has joint voting power over the
Shares, together with the Shareholder’s spouse.
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Other exceptions:
Annex C
SUPPORT AGREEMENT
This Support Agreement (this
“Agreement”), dated as of November [●], 2021, is made by and among BM Technologies, Inc., a Delaware corporation
(“BMT”), First Sound Bank, a Washington state-chartered bank (“FSB”), and the undersigned shareholder
of BMT (“Shareholder”).
WHEREAS, BMT and FSB are
entering into an Agreement and Plan of Reorganization and Merger, dated as of the date hereof (including all annexes, exhibits and schedules
thereto, and as it may be amended, the “Merger Agreement”), pursuant to which (i) a newly organized subsidiary of
FSB, FSB Intermediate Merger Subsidiary, Inc., (“Intermediate Merger Sub”) will merge with and into FSB and (ii) a newly-organized
subsidiary of Intermediate Merger Sub, BMT Merger Subsidiary, Inc. will merge FSB Intermediate Merger Subsidiary, Inc., (“Intermediate
Merger Sub”) with and into BMT on the terms and conditions set forth therein (the “Mergers”) and, in connection
there with all outstanding shares of BMT Common Stock will be converted into the right to receive shares of FSB Common Stock in the manner
set forth therein. Unless otherwise indicated, capitalized terms used and not defined herein shall have the meanings set forth in the
Merger Agreement.
WHEREAS, Shareholder owns
shares of BMT Common Stock (such shares, together with all shares of capital stock, if any, subsequently acquired by Shareholder during
the term of this Agreement, being referred to as the “Shares”), and, as a result, Shareholder has a material economic
interest in the consummation of the Mergers.
WHEREAS, in order to induce
BMT and FSB to enter into the Merger Agreement and consummate the transactions contemplated there under including the Mergers, Shareholder
has agreed to enter into and perform this Agreement.
NOW, THEREFORE, for good
and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
1. Agreement to Vote Shares.
Shareholder agrees that at any meeting of the shareholders of BMT which relates to or may impact, either directly or indirectly, the
Mergers or the Merger Agreement, or in connection with any written consent of the shareholders of BMT, Shareholder shall:
(a)
appear at each such meeting or otherwise cause the Shares to be counted as present thereat for purposes of establishing a quorum;
and
(b)
vote (or cause to be voted), in person or by proxy, or deliver a written consent (or cause a consent to be delivered) covering,
all the Shares (whether acquired heretofore or hereafter) that are owned of record or beneficially by Shareholder or as to which Shareholder
has, directly or indirectly, the right to vote or direct the voting: (i) in favor of adoption and approval of the Merger Agreement, the
Mergers and any other transactions contemplated by the Merger Agreement; (ii) against any action or agreement submitted to the shareholders
for their approval or consent that could reasonably be expected to result in a breach of any covenant, representation or warranty or
any other obligation or agreement of BMT contained in the Merger Agreement or of Shareholder contained in this Agreement; and (iii) against
any Acquisition Proposal or any other action, agreement or transaction that is intended, or could reasonably be expected, to materially
impede, interfere or be inconsistent with, delay, postpone, discourage or materially and adversely affect consummation of the Merger
or the performance by Shareholder of Shareholder’s obligations under this Agreement.
2. Transfer of Shares.
(a)
Prohibition on Transfers of Shares; Other Actions. Shareholder hereby agrees that while this Agreement is in effect, Shareholder
shall not, except with the prior written approval of BMT and FSB, (i) sell, transfer, pledge, encumber, distribute by gift or donation,
or otherwise dispose of any of the Shares (or any securities convertible into or exercisable or exchangeable for Shares) or any interest
therein, whether by actual disposition, physical settlement or effective economic disposition through hedging transactions, derivative
instruments or other means, except for charitable gifts or donations where the recipient enters into a voting agreement binding the recipient
to vote its shares in the manner provided in Section 1 of this Agreement, (ii) enter into any agreement, arrangement or understanding
with any Person, or take any other action, that violates or conflicts with or could reasonably be expected to violate or conflict with
Shareholder’s representations, warranties, covenants and obligations under this Agreement, or (iii) take any other action that
could reasonably be expected to impair or otherwise adversely affect, in any material respect, Shareholder’s power, authority and
ability to comply with and perform his or her covenants and obligations under this Agreement.
(b)
Transfer of Voting Rights. Shareholder hereby agrees that while this Agreement is in effect, Shareholder shall not deposit
any Shares in a voting trust or, other than this Agreement, grant any proxy or enter into any voting agreement or similar agreement or
arrangement with respect to any of the Shares.
3. Representations and
Warranties of Shareholder. Shareholder represents and warrants to BMT and FSB that the following statements are true and correct
and not misleading:
(a) Capacity. Shareholder
has all requisite capacity and authority to enter into and perform his or her obligations under this Agreement.
(b) Binding Agreement.
This Agreement has been duly executed and delivered by Shareholder and constitutes the valid and legally binding obligation of Shareholder,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating
to or affecting creditors’ rights and to general equity principles.
(c) Non-Contravention.
The execution and delivery of this Agreement by Shareholder does not, and the performance by Shareholder of his or her obligations hereunder
and the consummation by Shareholder of the transactions contemplated hereby will not, violate or conflict with, or constitute a default
under, any agreement, instrument, contract or other obligation or any order, arbitration award, judgment or decree to which Shareholder
is a party or by which Shareholder is bound, or any statute, rule or regulation to which Shareholder is subject.
(d) Ownership. Except
as otherwise described in Appendix A or in connection with a charitable gift or donation as contemplated by Section 2(a), the
Shares are, and through the term of this Agreement will be, owned beneficially and of record solely by Shareholder. Shareholder has good
and marketable title to the Shares, free and clear of any lien, pledge, mortgage, security interest or other encumbrance. As of the date
hereof, Shareholder is the beneficial and record owner of the number of shares of BMT Common Stock set forth opposite Shareholder’s
name on the signature page hereto. Shareholder has and will have at all times during the term of this Agreement (i) sole voting power
and sole power to issue instructions with respect to the matters set forth in Section 1 hereof, (ii) sole power of disposition, and (iii)
sole power to agree to all of the matters set forth in this Agreement, in each case with respect to all of the Shares owned by Shareholder
on the date of this Agreement and all of the Shares hereafter acquired by Shareholder and owned beneficially or of record by it during
the term of this Agreement. For purposes of this Agreement, the term “beneficial ownership” shall be interpreted in accordance
with Rule 13d-3 under the Securities Exchange Act of 1934, as amended, provided that a Person shall be deemed to beneficially own any
securities which may be acquired by such Person pursuant to any agreement, arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise (irrespective of whether the right to acquire such securities is exercisable
immediately or only after the passage of time, including the passage of time within 60 days, the satisfaction of any conditions, the
occurrence of any event or any combination of the foregoing).
(e) Consents and Approvals.
Shareholder has taken all actions necessary to approve the actions contemplated by this Agreement. The execution and delivery of this
Agreement by Shareholder does not, and the performance by Shareholder of his or her obligations under this Agreement and the consummation
by him or her of the transactions contemplated hereby will not, require Shareholder to obtain any consent, approval, authorization or
permit of, or to make any filing with or notification to, any Governmental Authority.
(f) Absence of Litigation.
There is no suit, action, investigation or proceeding pending or, to the knowledge of Shareholder, threatened against or affecting Shareholder
or any of his or her affiliates before or by any Governmental Authority that could reasonably be expected to materially impair the ability
of Shareholder to perform his or her obligations hereunder or to consummate the transactions contemplated hereby on a timely basis.
4. No Solicitation.
Shareholder hereby agrees that during the term of this Agreement, Shareholder shall not, and shall not permit any investment banker,
financial advisor, attorney, accountant or other representative retained by Shareholder to, directly or indirectly, (a) take any of the
actions specified in Section 6.7(a) of the Merger Agreement, (b) agree to release, or release, any Person from any obligation under any
existing standstill agreement or arrangement relating to BMT, or (c) participate in, directly or indirectly, a “solicitation”
of “proxies” (as such terms are used in the rules of the Securities and Exchange Commission) or powers of attorney or similar
rights to vote, or seek to advise or influence any Person with respect to the voting of, any shares of BMT Common Stock in connection
with any vote or other action on any matter of a type described in Section 1(b) hereof, other than to recommend that shareholders of
BMT vote in favor of the adoption and approval of the Merger Agreement, the Mergers and the transactions contemplated by the Merger Agreement
and as otherwise expressly permitted by this Agreement or the Merger Agreement. Shareholder agrees immediately to cease and cause to
be terminated any activities, discussions or negotiations conducted before the date of this Agreement with any Persons other than BMT
with respect to any possible Acquisition Proposal and will take all necessary steps to inform any investment banker, financial advisor,
attorney, accountant or other representative retained by Shareholder of the obligations undertaken by Shareholder pursuant to this Section
4.
5. Notice of Acquisition
Proposals; Proposals Regarding Prohibited Transactions. Shareholder hereby agrees to notify BMT and FSB promptly (and in any event
within two (2) Business Days) in writing of the number of any additional shares of BMT Common Stock or other securities of BMT of which
Shareholder acquires beneficial or record ownership on or after the date hereof. Shareholder will promptly (within 24 hours) advise BMT
and FSB orally and in writing of the receipt of any Acquisition Proposal (or any inquiry which could lead to an Acquisition Proposal)
and keep BMT and FSB informed, on a current basis, of the continuing status thereof, including the terms and conditions thereof and any
changes thereto.
6. Specific Performance
and Remedies. Shareholder acknowledges that it will be impossible to measure in money the damage to BMT and FSB if Shareholder fails
to comply with the obligations imposed by this Agreement and that, in the event of any such failure, BMT and FSB will not have an adequate
remedy at law. Accordingly, Shareholder agrees that injunctive relief or other equitable remedy, in addition to remedies at law or in
damages, is the appropriate remedy of BMT and FSB for any such failure and will not oppose the granting of such relief on the basis that
BMT and FSB may have an adequate remedy at law. Shareholder agrees that Shareholder will not seek, and agree to waive any requirement
for, the securing or posting of a bond in connection with BMT or FSB seeking or obtaining such equitable relief.
7. Term of Agreement; Termination.
The term of this Agreement shall commence on the date hereof and terminate at the Effective Time. In the event the Mergers are not consummated
and the Merger Agreement is terminated in accordance with its terms (other than as a result of a breach of this Agreement), this Agreement
shall be null and void.
8. Stop Transfer Order.
In furtherance of this Agreement, Shareholder hereby authorizes and instructs BMT to instruct its transfer agent, if any, to enter a
stop transfer order with respect to all of the Shares for the period from the date hereof through the date this Agreement is terminated
in accordance with Section 7.
9. Confidentiality.
Shareholder agrees (a) to hold any and all material non-public information regarding this Agreement, the Mergers and the Merger Agreement
in strict confidence, and (b) not to divulge any material non-public information regarding this Agreement, the Mergers or the Merger
Agreement to any third person, until such time as the Merger has been publicly announced by BMT and FSB, at which time Shareholder may
only divulge such information as has been publicly disclosed by BMT and FSB.
10. Entire Agreement.
This Agreement contains the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements,
written or oral, among the parties hereto with respect to the subject matter hereof. This Agreement may not be amended, supplemented
or modified, and no provisions hereof may be modified or waived, except by an instrument in writing signed by each party hereto. No waiver
of any provisions hereof by any party shall be deemed a waiver of any other provisions hereof by any such party, nor shall any such waiver
be deemed a continuing waiver of any provision hereof by such party.
11. Attorneys’ Fees.
If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled
to reasonable attorneys’ fees, costs and necessary disbursements, in addition to any other relief to which the prevailing party
is entitled.
12. Severability. If
any provision of this Agreement or the application of such provision to any person or circumstances shall be held invalid or unenforceable
by a court of competent jurisdiction, such provision or application shall be unenforceable only to the extent of such invalidity or unenforceability,
and the remainder of the provision held invalid or unenforceable and the application of such provision to persons or circumstances, other
than the party as to which it is held invalid, and the remainder of this Agreement, shall not be affected.
13. Notices. All notices,
requests, claims, demands or other communications hereunder shall be in writing and shall be deemed given when delivered personally,
upon receipt of a transmission confirmation if sent by telecopy or like transmission and on the next Business Day when sent by a reputable
overnight courier service to the parties at the following addresses (or at such other address for a party as shall be specified by like
notice):
If to BMT:
BM Technologies, Inc.
201 King of Prussia Road, Suite 350
Wayne, PA 19087
Attention: Luvleen Sidhu, Chief Executive Officer
Facsimile: [●]
E-mail: [●]
With a copy to:
If to FSB:
Nelson Mullins Riley & Scarborough
101 Constitution Avenue Northwest, Suite 900
Washington, DC 20001
Attention: Jonathan H. Talcott and E. Peter Strand
Facsimile: (646) 428 2610
E-Mail: jon.talcott@nelsonmullins.com and peter.strand@nelsonmullins.com
If to FSB:
First Sound Bank
925 4th Ave, No. 2350
Seattle, WA 98104
Attention: Marty A. Steele, President and CEO
Facsimile: [●]
E-mail: msteele@firstsoundbank.com
With a copy to:
Keller Rohrback L.L.P.
1201 Third Avenue, Suite 3200
Seattle, WA 98101
Attention: [●]
Facsimile: [●]
E-mail: [●]
If to Shareholder, at the
address of Shareholder appearing on the signature page of this Agreement.
14. Assignment; Binding
Effect. No party may assign either this Agreement or any of its rights, interests or obligations hereunder without the prior written
approval of the other parties. Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
15. Governing Law; Jurisdiction.
This Agreement shall be governed by, and interpreted in accordance with, the laws of the State of Delaware applicable to contracts made
and entirely to be performed within such state, without regard to any applicable conflicts of law principles that would require the application
of the laws of any other jurisdiction. Any dispute arising under or relating to this Agreement will be litigated in the state or federal
courts located in Delaware and the parties hereby consent to the exclusive jurisdiction of such courts.
16. Independent Review
and Advice. Shareholder represents and warrants that Shareholder has carefully read this Agreement; that Shareholder executes this
Agreement with full knowledge of the contents of this Agreement, the legal consequences thereof, and any and all rights which any party
may have with respect to the other parties; that Shareholder has had the opportunity to receive independent legal advice with respect
to the matters set forth in this Agreement and with respect to the rights and asserted rights arising out of such matters, and that Shareholder
is entering into this Agreement of Shareholder’s own free will. Shareholder expressly agrees that there are no expectations contrary
to this Agreement and no usage of trade or regular practice in the industry shall be used to modify this Agreement. The parties agree
that this Agreement shall not be construed for or against either party in any interpretation thereof.
17. Headings. The descriptive
headings of the Sections of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.
18. Execution and Counterparts.
Signatures sent by facsimile or electronically shall have the same force an effect as manual signed originals. This Agreement may be
executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one
or more counterparts have been signed by each party hereto and delivered to each party hereto.
[Signature page follows]
IN WITNESS WHEREOF,
the parties hereto have executed and delivered this Agreement as of the date first written above.
BM TECHNOLOGIES, INC.
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By:
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Name:
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Title:
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FIRST SOUND BANK
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By:
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Name:
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Title:
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SHAREHOLDER
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Name:
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Number of Shares Owned
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Address:
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Signature Page to Support
Agreement
Appendix A
Exceptions to Representations:
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Check the box if
the following statement is applicable: The Shareholder is the joint beneficial owner
of the Shares, together with the Shareholder’s spouse.
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Check the box if
the following statement is applicable: The Shareholder has joint voting power over the
Shares, together with the Shareholder’s spouse.
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Other exceptions:
Exhibit 99.1
BM
Technologies Announces Strategic Merger
with
First Sound Bank
Achieves Important
Milestone in the Evolution of the Company Allowing for the Expansion of its Products & Services to Better Serve Customers
Increases and Diversifies
Earnings, and Creates a FinTech-driven Banking Franchise with a Long-term Sustainable Business Model
Transaction will be
Discussed during the Company’s Third Quarter Earnings Call and Webcast on November 15th at 9:00am ET
RADNOR, PA, November
15, 2021 – BM Technologies, Inc. (NYSE American: BMTX) (“the Company” or “BMTX”), one of the largest
digital banking platforms in the country, announced the signing of a definitive agreement to merge with First Sound Bank (OTCPK: FSWA)
(“FSB”), a Seattle, Washington-based community business bank. BMTX will pay up to $7.22 in cash for each share of FSB common
stock or approximately $23 million in aggregate consideration, subject to certain closing conditions and adjustments as outlined in the
definitive agreement. The combined company, to be named BMTX Bank, will be a fintech-based bank focused on serving customers digitally
nationwide, supported by its community banking division that is expected to continue serving the greater Seattle market. The transaction
is subject to regulatory approvals and other customary closing conditions, and is expected to close in the second half of 2022.
This strategic merger
is expected to be significantly accretive to the combined company’s revenue, EBITDA, and earnings trajectory over the next 1-3 years,
with financial, operational, and strategic benefits materializing immediately after close and meaningfully growing as the business continues
to scale. The transaction bolsters BMTX’s ability to deliver technological and customer centered innovation through a full suite
of digitally-advanced banking products in a regulatory compliant, safe and sound manner.
“This is a thrilling
milestone for BM Technologies and is a major step forward in executing our vision to create a disruptive FinTech bank that combines the
best of financial technology with a strong and compliant FDIC-insured institution,” said Luvleen Sidhu, Chair, CEO and Founder of
BM Technologies. “As one of the largest digital banking platforms in the country with approximately 2 million accounts, this merger
allows BMTX to lead a new wave of financial innovation by enhancing its focus on technology, inclusion, easy-to-use products, and customer
education with the mission of creating ‘customers for life’. This merger is expected to meaningfully expand our already profitable,
technology focused business model and will enhance our diversified earnings, as we bring BMTX-serviced deposits onto our balance sheet
and generate superior fee-based income supported by interest income economics from deploying those deposits into loans over time.”
“Looking
ahead, BMTX Bank expects to add direct to consumer and small business operations, marketplace lending, robo-advisory and blockchain based
payment systems to sustain our competitive advantage into the future,” Sidhu continued.
Commenting on the proposed
transaction, Marty Steele, President and CEO of First Sound Bank said, “As a local bank, we remain committed to our community and
are excited about the opportunity to leverage BMTX’s innovative digital banking technology, Banking-as-a-Service business model,
low-cost deposit funding, and better access to the capital markets in order to scale our SBA, commercial and private banking, mortgage,
and other business lines. Together we are looking forward to this partnership to create a nationwide deposit gathering and lending platform
with the power to deliver an integrated customer experience at the highest level.”
The combined entity will
be led by Luvleen Sidhu as Chair and CEO of BMTX Bank, who will also be directly responsible for digital banking initiatives. Marty Steele
will lead the combined company’s community banking division and also serve as COO of BMTX Bank.
The company intends to gradually support the onboarding of BMTX-serviced
deposits onto the balance sheet with additional capital. These onboarded deposits are expected to be deployed into earning assets, including
loans that generate attractive returns, positioning the combined company for long-term sustainable success. “With developments in
AI and machine learning coming to market rapidly, we intend to remain a very customer focused and innovative company with a unique strategy
that cannot be easily replicated,” concluded Sidhu.
Potential strategic benefits of the merger include:
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Creates a FinTech bank leveraging BMTX’s best-in-class and proprietary
Banking-as-a-Service (“BaaS”) offerings and nationwide deposit gathering capabilities with a bank charter
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Accelerates earnings power by supplementing fee-based income with
net interest income
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Offers new products and services over time through an expanded BaaS
offering, direct to consumer initiatives, marketplace lending, personal investing and robo-advisory services and blockchain based payment
systems
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Attracts new customers and enhances customer retention through the
addition of banking products and services that leverage BMTX's unique, low cost, high volume customer acquisition strategy and marketing
strength
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Enables BMTX to support other FinTechs with its banking platform
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Enhances customer value creation and engagement by providing access
to lending products and promoting better financial health by helping them manage their cash flow and savings
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First Sound Bank is a locally owned, independent community bank providing
commercial and private banking services to small to medium sized businesses, not-for-profit organizations, entrepreneurs, and professional
service firms throughout the Puget Sound market. FSB operates through a single office location in downtown Seattle.
BM Technologies is one of America’s
largest digital financial services platforms with approximately 2 million accounts. The Company focuses on millennials and
underserved middle income Americans providing convenient access to a suite of financial products to its customers. BMTX’s
proprietary Banking-as-a-Service business model leverages its partners’ existing customer bases to achieve low cost, high
volume, customer acquisition. BMTX currently also provides disbursement services at approximately 745 college and university
campuses (covering one out of every three college students in the U.S.).
Advisors
Wedbush Securities Inc. initiated the transaction and served as exclusive
financial advisor to BM Technologies in connection with the transaction and Nelson Mullins Riley & Scarborough LLP served as its legal
counsel. Keefe, Bruyette & Woods, A Stifel Company served as exclusive financial advisor to First Sound Bank and Keller Rohrback
L.L.P. served as its legal counsel.
WEBCAST
The company
will host a live webcast to discuss the transaction and its third quarter results at 9:00am ET on Monday, November 15, 2021. The
webcast can be accessed via its investor relations site (ir.bmtxinc.com) by clicking on "Events & Presentations", then "Events
Calendar," and following the link under "Upcoming Events;" or directly at Q3 2021 Earnings Webcast.
About BM Technologies,
Inc.
BM Technologies, Inc. (NYSE American: BMTX)—formerly
known as BankMobile—is among the largest digital banking platforms in the U.S., providing access to checking and savings accounts,
personal loans, credit cards, and financial wellness. It is focused on technology, innovation, easy-to-use products, and education with
the mission of being “customer-obsessed” and creating “customers for life.” The BM Technologies (BMTX) digital
banking platform employs a multi-partner distribution model, known as “Banking-as-a-Service” (BaaS), that enables the acquisition
of customers at higher volumes and substantially lower expense than traditional banks, while providing significant benefits to its customers,
partners, and business. BM Technologies (BMTX) currently has approximately two million accounts and provides disbursement services at
approximately 745 college and university campuses (covering one out of every three college students in the U.S.). BM Technologies, Inc.
(BMTX) is a technology company and is not a bank, which means it provides banking services through its partner bank. More information
can also be found at www.bmtx.com.
About First Sound Bank
First Sound Bank is a locally owned, independent
community bank with approximately $150 million in assets. The company provides commercial and private banking services for small to medium
sized businesses, not-for-profit organizations, entrepreneurs, and professional service firms throughout the Puget Sound market. More
information can be found at www.firstsoundbank.com.
Forward Looking Statements
This release may contain
“forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve
risks and uncertainty. Words such as “anticipate,” “estimate,” “expect,” “intend,”
“plan,” and “project” and other similar words and expressions are intended to signify forward-looking
statements. Forward-looking statements are not guarantees of future results and conditions but rather are subject to various risks
and uncertainties. Such statements are based on management’s current expectations and are subject to a number of risks and
uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Investors
are cautioned that there can be no assurance actual results or business conditions will not differ materially from those projected
or suggested in such forward-looking statements as a result of various factors. These risks and uncertainties include, but are not
limited to, general economic conditions, consumer adoption, technology and competition, the ability to enter into new partnerships,
regulatory risks, risks associated with the higher education industry and financing, the operations and performance of the
Company’s partners, including white-label partners, the occurrence of any event, change or other circumstances that could give
rise to the termination of the definitive merger agreement, the inability to satisfy closing conditions to the definitive merger
agreement, including obtaining regulatory approval, the ability of FSB and BMTX to recognize the anticipated benefits of the
proposed transactions, and other factors described in the section entitled “Risk Factors” and in the Company’s
periodic filings with the Securities and Exchange Commission (“SEC”). The Company’s SEC filings are available
publicly on the SEC website at www.sec.gov. The Company disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by law.
No Offer
or Solicitation
This press
release is for informational purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy any securities
pursuant to the proposed transactions or otherwise, nor shall there be any sale of securities in any jurisdiction in which the offer,
solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.
No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933,
as amended.
No Assurances
There can
be no assurance that the transactions described herein will be completed, nor can there be any assurance, if such transactions are completed,
that the potential benefits of combining the companies will be realized. The description of the transactions contained herein is only
a summary and is qualified in its entirety by reference to the definitive agreements relating to the transactions, copies of which will
be filed by BMTX with the SEC as an exhibit to a Current Report on Form 8-K.
Important
Information about the Transactions and Where to Find It
In connection
with the Transactions described herein, BMTX will file relevant materials with the SEC, including a definitive proxy statement for BMTX’s
shareholders. Promptly after filing the definitive proxy statement with the SEC, BMTX will mail the proxy statement and a proxy card to
each shareholder entitled to vote at the special meeting relating to the transactions. Investors and security holders are urged to read
these materials (including any amendments or supplements thereto) and any other relevant documents in connection with the transactions
that BMTX will file with the SEC when they become available because they will contain important information about BMTX, FSB, and the transaction.
The preliminary proxy statement, the definitive proxy statement and other relevant materials in connection with the transactions (when
they become available), and any other documents filed by BMTX with the SEC, may be obtained free of charge at the SEC’s website
(www.sec.gov) or by writing to BM Technologies, Inc. at 201 King of Prussia Road, Suite 350, Wayne, PA 19087.
Participants
in Solicitation
BMTX and
FSB and their respective directors, executive officers and employees and other persons may be deemed to be participants in the solicitation
of proxies from the holders of BMTX common stock in respect of the proposed transactions. Information about BMTX’s directors and
executive officers and their ownership of BMTX’s common stock is set forth in BMTX’s prospectus on Form 424B3 filed with the
SEC on September 28, 2021, as modified or supplemented by any Form 3 or Form 4 filed with the SEC since the date of such filing. Other
information regarding the interests of the participants in the proxy solicitation will be included in the proxy statement pertaining to
the proposed transactions when it becomes available. These documents can be obtained free of charge from the sources indicated above.
Contact Information
Investors:
Bob Ramsey, CFA
Chief Financial Officer
571-236-8851
rramsey@bmtx.com
Media Inquiries:
Julie Strickland
Rubenstein Public Relations, Inc.
212-805-3062
jstrickland@rubensteinpr.com
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