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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): January 8, 2021 (January 4, 2021)

  

BM TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

  

Delaware   001-38633   82-3410369
(State or other jurisdiction
of incorporation)
  (Commission File Number)   (IRS Employer
Identification No.)

 

201 King of Prussia Road, Suite 350

Wayne, PA 19087

(Address of principal executive offices, including zip code)

 

Registrant’s telephone number, including area code: (877) 327-9515

 

Megalith Financial Acquisition Corp.

535 5th Avenue, 29th Floor

New York, NY 10017

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Class A Common Stock   BMTX   NYSE American LLC
Warrants to purchase Class A Common Stock   BMTX.W   NYSE American LLC

 

 

 

 

 

 

Introductory Note

 

On January 4, 2021, Megalith Financial Acquisition Corp. (“Megalith”), MFAC Merger Sub Inc., (“Merger Sub”) and BankMobile Technologies, Inc. (“BankMobile”) consummated the transactions contemplated by the Merger Agreement (as defined below) (the “Transactions”), following the approval at the special meeting of the stockholders of Megalith held on December 21, 2020 (the “Special Meeting”). In connection with the Closing (as defined below) of the Merger, the registrant changed its name from Megalith Financial Acquisition Corp. to BM Technologies, Inc. (the “Company” or “BMT”). Certain terms used in this Current Report on Form 8-K have the same meaning as set forth in the final prospectus and definitive proxy statement (the “Proxy Statement/Prospectus”) filed with the Securities and Exchange Commission (the “Commission”) on December 11, 2020 by Megalith.

 

Item 1.01. Entry into Material Definitive Agreement.

  

Merger Agreement

 

As disclosed under the sections titled “The Business Combination Proposal” of the Proxy Statement/Prospectus, on August 6, 2020, the parties entered into an Agreement and Plan of Merger, dated as of August 6, 2020 (as amended on November 2, 2020 and December 8, 2020, the “Merger Agreement”), by and among Megalith, Merger Sub, BankMobile, Customers Bank and Customers Bancorp Inc. (“CUBI”).

 

The Transactions involved the merger of BankMobile with and into Merger Sub, with Merger Sub continuing as the surviving corporation (the “Surviving Subsidiary”) and as a wholly-owned subsidiary of the Company.

 

Item 2.01 of this Current Report discusses the consummation of the Transactions and events contemplated by the Merger Agreement which took place on January 4, 2021 (the “Closing”), and is incorporated herein by reference.

 

Transition Services Agreement

 

In connection with the Closing, on January 4, 2021, the Company entered into that certain Transition Services Agreement (the “Transition Services Agreement”) with Customers Bank, a bank chartered under the laws of the Commonwealth of Pennsylvania (“Customers Bank”). Pursuant to the Transition Services Agreement, each party agrees for a period of up to twelve months from the Closing to provide certain transition services listed therein to the other party. In consideration for the services, the Company will pay Customers Bank a service fee of $12,500 per month, plus any expenses associated with the services. The Company may terminate the Transition Services Agreement without penalty with at least 30 days advance written notice if the Company determines there is no longer a business need for the services. Either party may terminate upon at least 30 days advance written notice for a material uncured default of the other party’s obligations, or if the other party seeks or is subject to liquidation or bankruptcy.

 

The foregoing description of the Transition Services Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Transition Services Agreement, a copy of which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.

 

License Agreement

 

In connection with the Closing, on January 4, 2021, the Company entered into that certain Software License Agreement (the “License Agreement”) with Customers Bank, providing that the Company grants a non-exclusive, nontransferable, royalty-free license to use the mobile banking technology provided by the Company to Customers Bank for a period of ten years. The License Agreement may be terminated upon either party’s uncured material breach, provided that if the agreement is terminated for the Company’s uncured material breach, then the Company shall pay Customers Bank an early termination fee equal to the product of $10 million, and the number of whole months remaining in the term divided by 120. The license is subject to certain other restrictions on use and customary conditions set forth in the License Agreement.

 

The foregoing description of the License Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the License Agreement, a copy of which is filed as Exhibit 10.2 hereto and is incorporated herein by reference.

 

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Deposit Servicing Agreement

 

In connection with the Closing, on January 4, 2021, the Company entered into that certain Deposit Processing Services Agreement (the “Deposit Servicing Agreement”) with Customers Bank, providing that Customers Bank would establish and maintain deposit accounts and other banking services in connection with customized products and services offered by the Company, and the Company would provide certain other related services in connection with the accounts. The initial term continues until December 31, 2022, which shall automatically renew for additional three year terms unless either party gives written notice of nonrenewal within 180 days prior to the expiration of the term. The Deposit Servicing Agreement may be terminated early by either party upon material breach, upon notice of an uncured objection from a regulatory authority, or by the Company upon 90 days’ written notice upon the satisfaction of certain conditions. As compensation, Customers Bank will retain any and all revenue generated from the funds held in the deposit accounts, and Customers Bank will pay the Company a monthly servicing fee equal to 150 basis points for deposit servicing and 150 basis points for net interest margin sharing, and a monthly interchange fee equal to all debit card interchange revenues on demand deposit accounts generated by the Company for Customers Bank plus the difference between Durbin Exempt and Durbin regulated interchange revenue, as determined pursuant to the Deposit Servicing Agreement.

 

The foregoing description of the Deposit Servicing Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Deposit Servicing Agreement, a copy of which is filed as Exhibit 10.3 hereto and is incorporated herein by reference.

 

Non-Competition Agreement

 

In connection with the Closing, on January 4, 2021, Customers Bank entered into that certain Non-Competition and Non-Solicitation Agreement (the “Non-Competition Agreement”) in favor of and for the benefit of the Company, BankMobile and each of their respective affiliates and successors (each, a “Covered Party”), providing that Customers Bank will not for a period of 4 years after the Closing directly or indirectly engage in the Business (as defined in the Non-Competition Agreement) in the Territory (as defined in the Non-Competition Agreement), except for white label digital banking services with previously identified parties and passive investments of no more than 2% of a class of equity interests of a competitor that is publicly traded. Customers Bank also agreed not to directly or indirectly hire or solicit any employees of a Covered Party.

 

The foregoing description of the Non-Competition Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Non-Competition Agreement, a copy of which is filed as Exhibit 10.4 hereto and is incorporated herein by reference.

 

Indemnification Agreements

 

In connection with the Closing, on January 4, 2021, each of the senior officers and directors of the Company entered into standard indemnification agreements with the Company, requiring the Company to indemnify him or her against certain liabilities that may arise by reason of their service to the Company, to the fullest extent permitted by Delaware law.

 

The foregoing description of the indemnification agreements is qualified in its entirety by the form of indemnification agreement, a copy of which is filed as Exhibit 10.5 hereto and is incorporated herein by reference.

 

Debt Agreement

 

In connection with the Closing, on January 4, 2021, the Company and the Surviving Subsidiary entered into a Loan Agreement (the “Debt Agreement”) with Customers Bank (the “Lender”) providing for a line of credit of up to $10 million, subject to a borrowing base requirement based on Company’s and Surviving Subsidiary’s accounts receivables. Borrowings made under the Debt Agreement are subject to an interest rate equal to the 1-month London Interbank Offered Rate (“LIBOR”) plus 375 basis points, and are secured by the assets of the Company and Surviving Subsidiary. Borrowed funds may be repaid at any time without penalty. Concurrent with signing the Debt Agreement, the Company drew approximately $5.4 million under the Debt Agreement to refinance intercompany debt owed by BankMobile to Customers Bank immediately prior to the Closing.

 

The foregoing description of the Debt Agreement is qualified in its entirety by the Debt Agreement, a copy of which is filed as Exhibit 10.6 hereto and is incorporated herein by reference.

 

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Item 2.01. Completion of Acquisition or Disposition of Assets.

 

The disclosure set forth in the “Introductory Note” and “Merger Agreement” above is incorporated into this Item 2.01 by reference.

 

Pursuant to the terms of the Merger Agreement, the total consideration for the Business Combination and related transactions (the “Merger Consideration”) was approximately $87.7 million. Adjusted for Company debt, excess transaction expenses, working capital adjustments and cash (in each case, estimated as of the Closing), Customers Bank, as sole stockholder of BankMobile, received approximately $23.1 million in cash, stockholders of CUBI as of a record date of December 18, 2020 and certain employees of BankMobile collectively received $64.6 million in value of shares of Class A common stock of the Company, at $10.38 per share. In connection with the Special Meeting, holders of 500 shares of Megalith Class A common stock sold in its initial public offering exercised their right to redeem those shares for cash prior to the redemption deadline of December 17, 2020, at a price of $10.42 per share, for an aggregate payment from Megalith’s trust account of approximately $5,210. Effective January 6, 2021, the Company’s units ceased trading, and the Company’s common stock and warrants began trading on the NYSE American under the symbols “BMTX” and “BMTX.W,” respectively.

 

After taking into account the aggregate payment in respect of the redemption, the Company’s trust account had a balance immediately prior to the Closing of approximately $27.7 million. Such balance in the trust account, together with approximately $20.0 million in proceeds from the PIPE Financing (as defined below), were used to pay transaction expenses and other liabilities of Megalith, a cash reserve for the Company of $10.0 million, a portion of BankMobile debt due to CUBI equal to $8.8 million, and the cash consideration due to Customers Bank of $23.1 million.

 

FORM 10 INFORMATION

 

Item 2.01(f) of Form 8-K states that if the predecessor registrant was a shell company, as Megalith was immediately before the Business Combination, then the registrant must disclose the information that would be required if the registrant were filing a general form for registration of securities on Form 10. Accordingly, the Company, as the successor issuer to Megalith, is providing the information below that would be included in a Form 10 if the Company were to file a Form 10. Please note that the information provided below relates to the Company as the combined company after the consummation of the Business Combination, unless otherwise specifically indicated or the context otherwise requires.

 

Forward-Looking Statements

 

This Current Report on Form 8-K contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about future financial and operating results, our plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “believe,” “intend,” “plan,” “projection,” “outlook” or words of similar meaning. These forward-looking statements include, but are not limited to, statements regarding the Company’s industry and market sizes, future opportunities for the Company and the Company’s estimated future results. Such forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond our control. Actual results and the timing of events may differ materially from the results anticipated in these forward-looking statements.

 

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In addition to factors previously disclosed in prior reports filed with the SEC, including the Proxy Statement/Prospectus, the following factors, among others, could cause actual results and the timing of events to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: a delay or failure to realize the expected benefits from the Business Combination; our inability to form new bank partnerships and white label partnerships; changes in the fintech and disbursement market in which the Company competes, including with respect to its competitive landscape, technology evolution or regulatory changes; risk that the Company may not be able to execute its growth strategies, including entering into new partnerships; risks relating to data security; changes in accounting policies applicable to the Company; and the risk that the Company may not be able to develop and maintain effective internal controls. 

 

Actual results, performance or achievements may differ materially, and potentially adversely, from any projections and forward-looking statements and the assumptions on which those forward-looking statements are based. There can be no assurance that the data contained herein is reflective of future performance to any degree. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance as projected financial information and other information are based on estimates and assumptions that are inherently subject to various significant risks, uncertainties and other factors, many of which are beyond our control. All information set forth herein speaks only as of the date hereof in the case of information about the Company or the date of such information in the case of information from persons other than the Company, and the Company disclaims any intention or obligation to update any forward looking statements as a result of developments occurring after the date of this Current Report on Form 8-K. Forecasts and estimates regarding the Company’s industry and end markets are based on sources the Company believes to be reliable, however there can be no assurance these forecasts and estimates will prove accurate in whole or in part. Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.

 

Business

 

The business of the Company is described in the Proxy Statement/Prospectus in the section titled “Information about BankMobile” and that information is incorporated herein by reference.

 

Risk Factors

 

The risks associated with the Company are described in the Proxy Statement/Prospectus in the section titled “Risk Factors,” which is incorporated herein by reference. 

 

Financial Information

 

Reference is made to the disclosure set forth in Item 9.01 of this Current Report on Form 8-K concerning the financial information of the Company. Reference is further made to the disclosure contained in the Proxy Statement/Prospectus in the sections titled “Selected Historical Financial Data of BankMobile” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of BankMobile,” which are incorporated herein by reference.

 

Properties

 

The facilities of the Company are described in the Proxy Statement/Prospectus in the section titled “Information About BankMobile – Properties,” which is incorporated herein by reference.

 

Security Ownership of Certain Beneficial Owners and Management

 

The following table sets forth information regarding the beneficial ownership of shares of the Company’s common stock upon the completion of the Business Combination by:

 

each person known by the Company to be the beneficial owner of more than 5% of any class of the Company’s common stock;
each of the Company’s officers and directors;
all executive officers and directors of the Company.

  

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Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days.

 

In the table below, percentage ownership is based on 12,200,302 shares of Class A common stock outstanding as of January 4, 2021, including 6,225,135 shares issued as Merger Consideration and 1,913,199 shares of Class A common stock issued in connection with the PIPE Financing, and reflects the valid redemption of 500 shares of Class A common stock by public stockholders of Megalith and forfeiture of 2,932,222 Founders Shares pursuant to the Sponsor Share Letter (see the disclosure in “The Business Combination Proposal—Sponsor Share Letter”). The table below does not include the Class A Common Stock underlying the Placement Warrants held or to be held by the Company’s officers or Sponsor because these securities are not exercisable within sixty (60) days of the Proxy Statement/Prospectus. This table also assumes that there are no issuances of equity securities in connection with the Closing, including equity awards that may be issued under the 2020 Equity Incentive Plan following the Business Combination.

 

Unless otherwise indicated, the Company believes that all persons named in the table have sole voting and investment power with respect to all shares of Common Stock beneficially owned by them. Unless otherwise noted, the business address of each of the following entities or individuals is 201 King of Prussia Road, Suite 350, Wayne, PA 19087.

 

Name and Address of Beneficial Owner (1)   Number of
Shares
Beneficially
Owned
    % of Class  
Directors and Named Executive Officers            
Luvleen Sidhu(1)     809,248       6.64 %
Pankaj Dinodia     0       *  
Mike Gill     0       *  
Aaron Hodari(2)     0       *  
Brent Hurley     10,322       *  
A.J. Dunklau     2,064       *  
Marcy Schwab     0       *  
Robert Ramsey(3)     57,805       *  
Robert Diegel(4)     97,612       *  
Robert Savino     0       *  
All executive officers and directors as a group (10 individuals)     977,051       8.01 %
                 
Greater than Five Percent Holders:                
MFA Investor Holdings LLC(6)     1,019,802       8.4 %
Jay S. Sidhu(5)(6)     1,288,870       10.1 %
Bhanu Choudhrie(5)(6)     1,121,345       9.2 %
OxFORD Asset Management LLP(7)     971,487       8.0 %
Schechter Private Capital Funds(8)     1,913,199       15.7 %

 

 

* Less than 1%
(1) Includes 809,248 Merger Consideration Shares that Ms. Luvleen Sidhu will be directed from CUBI in connection with a severance agreement she entered into with CUBI, which shares are subject to restrictions on transfer and clawback if Ms. Sidhu does not maintain her service to the Company.

 

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(2) Mr. Hodari has indirect interest in the shares of common stock of the Company through his ownership of membership interests in Schechter Private Capital, LLC, but does not have voting or dispositive control over the shares and disclaims ownership of any of the shares of common stock of the Company held by Schechter Private Capital Fund I, LLC.
(3) Includes 57,805 Merger Consideration Shares that Mr. Ramsey will be directed from CUBI in connection with a severance agreement he entered into with CUBI, which shares are subject to restrictions on transfer and clawback if Mr. Ramsey does not maintain his service to the Company.
(4) Includes 96,339 Merger Consideration Shares that Mr. Diegel will be directed from CUBI in connection with a severance agreement he entered into with CUBI, which shares are subject to restrictions on transfer and clawback if Mr. Diegel does not maintain his service to the Company.
(5) Our Sponsor is the record holder of such shares. Jay S. Sidhu, and Bhanu Choudhrie are the managing members of our Sponsor and have voting and investment discretion with respect to shares held by our Sponsor. As such, they may be deemed to have beneficial ownership of the shares held directly by our Sponsor. Each such person disclaims any beneficial ownership of the reported shares other than to the extent of any pecuniary interest they may have therein, directly or indirectly. Excludes 300,000 founders shares subject to vesting and forfeiture unless the stock price reaches $15 per share for 20 out of 30 days.
(6) Includes an estimated 209,068 Merger Consideration Shares that Mr. Sidhu received as a CUBI Stockholder, based on Mr. Sidhu’s reported ownership in CUBI as of November 10, 2020.
(7) Includes an estimated 101,543 Merger Consideration Shares that Mr. Choudhrie received as a CUBI Stockholder, based on Mr. Choudhrie’s reported ownership in CUBI as of December 17, 2020.
(8) According to a Schedule 13G filed with the SEC on February 13, 2020, OxFORD serves as investment adviser to OxAM Quant Fund Limited. The address of the principal business office of the reporting person is OxAM House, 6 George Street, Oxford, United Kingdom, OX1 2BW.
(9) Includes 838,150 shares and 895,954 shares acquired from the Company in the PIPE Financing by Schechter Private Capital Fund I, LLC–Series Q and Schechter Private Capital Fund I, LLC—Series Q2, respectively, and 178,495 additional shares to be acquired from the Sponsor in connection with the PIPE Financing. Schechter Private Capital Fund I, LLC is managed by Schechter Private Capital, LLC. Decisions regarding the voting or disposition of the shares held by the foregoing are made by the President of Schechter Private Capital, LLC, Marc Schechter. Mr. Hodari disclaims ownership of any of the shares of common stock of the Company held by Schechter Private Capital Fund I, LLC. The address of Schechter Private Capital Fund I, LLC—Series Q and Schechter Private Capital Fund I, LLC—Series Q2 is 251 Pierce, Birmingham, MI 48009.

 

Directors and Executive Officers

 

The Company’s directors and executive officers after the Closing are described in the Proxy Statement/Prospectus in the section titled “Management of the Company Following the Business Combination,” which is incorporated herein by reference.

 

Executive Compensation

 

The compensation of the named executive officers of Megalith before the Business Combination is set forth in the Proxy Statement/Prospectus in the section titled “Megalith’s Management—Executive Compensation,” which is incorporated herein by reference. The compensation of the named executive officers of BankMobile before the Business Combination is set forth in the Proxy Statement/Prospectus in the section titled “Executive Compensation of BankMobile,” which is incorporated herein by reference.

 

The information set forth in this Current Report on Form 8-K under Item 5.02 is incorporated in this Item 2.01 by reference.

 

At the Special Meeting, Megalith’s shareholders approved the 2020 Equity Incentive Plan. A description of the material terms of the 2020 Equity Incentive Plan is set forth in the section of the Proxy Statement/Prospectus titled “The Incentive Plan Proposal,” which is incorporated herein by reference. This summary is qualified in its entirety by reference to the complete text of the 2020 Equity Incentive Plan, a copy of which is attached as an Exhibit 10.7 to this Current Report on Form 8-K. 

 

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Certain Relationships and Related Transactions, and Director Independence

 

The certain relationships and related party transactions of Megalith and BankMobile are described in the Proxy Statement/Prospectus in the section titled “Certain Relationships and Related Person Transactions” and are incorporated herein by reference.

 

Reference is made to the disclosure regarding director independence in the section of the Proxy Statement/Prospectus titled “Management of the Company Following the Business Combination – Director Independence,” which is incorporated herein by reference.

 

The information set forth under Item 5.02 “Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers—Employment Agreements” of this Current Report on Form 8-K is incorporated into this Item 2.01 by reference.

 

Legal Proceedings

 

Reference is made to the disclosure regarding legal proceedings in the sections of the Proxy Statement/Prospectus titled “Information About Megalith — Legal Proceedings,” which is incorporated herein by reference. To the knowledge of the Company, there are no material legal proceedings pending against the Company.

 

Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters

 

The Company’s common stock began trading on the NYSE American under the symbol “BMTX” and its warrants began trading on the NYSE American under the symbol “BMTX.W” on January 6, 2021, subject to ongoing review of the Company’s satisfaction of all listing criteria post-Business Combination. Megalith has not paid any cash dividends on its ordinary shares to date. The payment of cash dividends by the Company in the future will be dependent upon the Company’s revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of the Business Combination. The payment of any dividends subsequent to the Business Combination will be within the discretion of the board of directors of the Company.

 

Information regarding Megalith’s common stock, rights and units and related stockholder matters are described in the Proxy Statement/Prospectus in the section titled “Price Range and Dividends of Securities” and such information is incorporated herein by reference. 

 

Recent Sales of Unregistered Securities

 

Reference is made to the disclosure set forth under Item 3.02 of this Current Report on Form 8-K concerning the issuance of the Company’s common stock to certain accredited investors, which is incorporated herein by reference.

 

Description of Registrant’s Securities to be Registered

 

The description of the Company’s securities is contained in the Proxy Statement/Prospectus in the sections titled “Description of Securities After the Business Combination.”

 

Indemnification of Directors and Officers

 

The description of the indemnification arrangements with the Company’s directors and officers is contained in the Proxy Statement/Prospectus in the section titled “Description of Securities – Anti-Takeover Effects of the Amended Charter, the Bylaws and Certain Provisions of Delaware Law – Limitation on Liability and Indemnification of Directors and Officers” and the disclosure under Item 1.01 “Entry into Material Definitive Agreement—Indemnification Agreements” of this Current Report on Form 8-K, which is incorporated herein by reference.

 

Financial Statements and Supplementary Data

 

Reference is made to the disclosure set forth under Item 9.01 of this Current Report on Form 8-K concerning the financial statements of the Company and the disclosure contained in the Proxy Statement/Prospectus in the section titled “Management’s Discussion and Analysis of Financial Condition and results of Operations of Megalith,” which is incorporated herein by reference.

 

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Financial Statements and Exhibits

 

Reference is made to the disclosure set forth under Item 9.01 of this Current Report on Form 8-K concerning the financial information of the Company and its affiliates.

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant

 

Reference is made to the disclosure set forth under Item 1.01 of this Current Report on Form 8-K concerning the Debt Agreement, which is incorporated by reference into this Item 2.03.

 

Item 3.02. Unregistered Sales of Equity Securities

 

The PIPE Financing

 

In connection with the Business Combination, on August 5, 2020, Megalith entered into subscription agreements (the “PIPE Subscription Agreements”) with the PIPE Investors (including the Sponsor Affiliated PIPE Investors) to purchase 1,927,058 shares of Class A Common Stock in a private placement for $10.38 per share, for aggregate gross proceeds of approximately $20,002,872, subject to certain conditions, including that all conditions precedent to the Closing of the Business Combination will have been satisfied or waived (other than those conditions are to be satisfied at Closing). In connection with the PIPE Financing, pursuant to the Sponsor Share Letter, the Sponsor agreed to transfer an additional 178,496 aggregate shares to certain of the PIPE Investors.

 

The PIPE Financing closed on January 4, 2021, and the issuance of an aggregate 1,927,058 shares of Class A common stock occurred immediately prior to the Business Combination. The sale and issuance was made to accredited investors in reliance on Rule 506 of Regulation D under the Securities Act. No separate fees or commissions were paid to the placement agents other than payments made to such institutions for other services rendered in connection with the Megalith initial public offering and/or the Business Combination.

 

The summary is qualified in its entirety by reference to the text of the form of Subscription Agreements, which is included as Exhibit 10.8 to this Current Report on Form 8-K and is incorporated herein by reference.

 

Item 3.03. Material Modification to Rights of Security Holders

 

Amendment of Certificate of Incorporation and Bylaws

 

Upon the Closing of the Business Combination, the Company’s certificate of incorporation was further amended and restated to:

 

  (a)

rename the Company “BM Technologies, Inc.”;

 

  (b)

provide that the number of shares of capital stock the Company is authorized to issue is 1,010,000,000 shares, consisting of 1,000,000,000 shares of Common Stock, par value $0.0001 per share, and 10,000,000 shares of Preferred Stock, par value $0.0001 per share;

 

  (c)

Reclassify all shares of the Class A and Class B common stock as the “Common Stock”;

 

  (d) to provide that any amendment to the following provisions of the certificate of incorporation will require the approval of the holders of at least 66 2/3% of the then-outstanding shares of capital stock entitled to vote generally at an election of directors: “Board of Directors,” “Bylaws,” “Special Meetings of Stockholders; Action by Written Consent,” “Limited Liability; Indemnification,” “DGCL Section 203 and Business Combinations,” “Amendment of Amended and Restated Certificate,” and “Forum; Severability”;

 

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  (e)

to provide that any amendment to the bylaws by the stockholders requires the affirmative vote of the holders of at least 66 2/3% of the then-outstanding shares of capital stock entitled to vote generally at an election of directors;

 

  (f) to provide that we opt out of Section 203 of the Delaware General Corporation Law, which prevents certain Delaware corporations, under certain circumstances, from engaging in a “business combination” with certain “interested stockholders” and their affiliates;

 

  (g)

to provide that we may not engage in certain “business combinations” with any “interested stockholder” (which excludes Customers Bank and any of its direct or indirect transferees and any group as to which such persons) for a three-year period following the time that the stockholder became an interested stockholder, unless (1) prior to the date of the transaction, the board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; (2) the interested stockholder owned at least 85% of the voting stock outstanding upon consummation of the transaction, excluding for purposes of determining the number of shares outstanding (x) shares owned by persons who are directors and also officers and (y) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or (3) on or subsequent to the consummation of the transaction, the Business Combination is approved by the Combined Entity’s board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder; and

 

  (h) to remove provisions specific to blank check companies, including requirements to hold proceeds in a trust account until business combination or liquidation and terms governing consummation of a business combination.

 

This summary is qualified in its entirety by reference to the text of the amended and restated certificate of incorporation, which is included as Exhibit 3.1 to this Current Report and incorporated herein by reference.

 

Amended and Restated Bylaws

 

Upon the Closing, the Company’s bylaws were amended and restated to be consistent with our amended and restated certificate of incorporation and to make certain other changes that our board of directors deems appropriate for a public operating company. The amended and restated bylaws are filed as Exhibit 3.2 hereto and incorporated herein by reference.

 

Item 5.01. Changes in Control of Registrant.

 

Reference is made to the disclosure in the Proxy Statement/Prospectus in the section titled “The Business Combination Proposal,” which is incorporated herein by reference. Further reference is made to the information contained in Item 2.01 to this Current Report on Form 8-K, which is incorporated herein by reference.

 

As of January 4, 2021, there were approximately 12,200,302 shares of Common Stock outstanding. As a result of the Business Combination, after giving effect to the terms of such arrangements, (i) pre-Business Combination public shareholders of Megalith hold approximately 21.7% of the voting power of the Company, (ii) PIPE Investors (other than the Sponsor and its affiliates) hold approximately 15.7% of such voting power, (iii) the Sponsor and its affiliates hold approximately 9.9% of such voting power, (iv) the CUBI Stockholders and certain employees of BankMobile collectively own approximately 51.0% of the Company, and (v) advisors and underwriters receiving stock in connection with the Business Combination own approximately 1.6%, assuming that no Warrants are exercised.

 

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Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

Election of Directors and Appointment of Officers

 

The following persons are serving as executive officers and directors following the Closing. For information concerning the executive officers and directors, see the disclosure in the Proxy Statement/Prospectus in the sections titled “Megalith’s Management,” “Management of BankMobile,” “Management of the Company Following the Business Combination,” and “Certain Relationships and Related Person Transactions,” which are incorporated herein by reference.

 

Name   Age   Position
Luvleen Sidhu(6)   34   Chief Executive Officer; Chairman of the Board
Pankaj Dinodia(1)(2)(4)   36   Director
Mike Gill(2)(5)   69   Director
Aaron Hodari(1)(4)   34   Director
Brent Hurley(2)(3)(6)   41   Director
A.J. Dunklau(3)(5)   37   Director
Marcy Schwab(1)(5)   49   Director
Robert Ramsey   45   Chief Financial Officer
Robert Diegel   58   Chief Operating Officer
Robert Savino   44   Chief Product and Technology Officer

 

 

(1) Member of the audit committee.
(2) Member of the compensation committee.
(3) Member of the nominating and corporate governance committee.
(4) Class I Director.
(5) Class II Director.
(6) Class III Director.

 

Each director will hold office until his or her term expires at the next annual meeting of stockholders for such director’s class or until his or her death, resignation, removal or the earlier termination of his or her term of office.

 

Effective upon Closing, each of Jay Sidhu, Samvir Sidhu, Chad Hurley, Raj Date, Eric Frank, Bhanu Choudhrie and Kuldeep Malkani resigned as directors of Megalith. Effective upon Closing, each of A.J. Dunklau and Philip Watkins resigned as officers of Megalith.

 

2020 Equity Incentive Plan

 

At the Special Meeting, Megalith shareholders considered and approved the 2020 Equity Incentive Plan and reserved an amount of shares of common stock equal to 10% of the number of shares of common stock of the Company following the Business Combination for issuance thereunder. The 2020 Equity Incentive Plan was approved by the board of directors on January 3, 2021. The 2020 Equity Incentive Plan became effective immediately upon the Closing of the Business Combination.

 

A more complete summary of the terms of the 2020 Equity Incentive Plan is set forth in the Proxy Statement/Prospectus in the section titled “The Equity Incentive Plan Proposal.” That summary and the foregoing description are qualified in their entirety by reference to the text of the 2020 Equity Incentive Plan, which is filed as Exhibit 10.7 hereto and incorporated herein by reference.

 

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Employment Agreements

 

As a result of the Business Combination, the Company (through its subsidiaries) is now party to employment agreements with certain of the Company’s executive officers: Luvleen Sidhu (Chief Executive Officer), Robert Diegel (Chief Operating Officer), and Warren Taylor (Chief Customer Officer).

 

Ms. Luvleen Sidhu’s employment agreement has a term of two years and provides for immediate vesting of any equity incentive interests if terminated without cause or terminated for good reason. Ms. Luvleen Sidhu’s employment agreement automatically renews thereafter for successive two year periods unless either the Company or the Ms. Luvleen Sidhu gives written notice to the other at least sixty (60) days prior to the end of the applicable term.

 

Messrs. Crawford, Diegel, and Taylor’s employment agreements each have a term of one year and provide for accelerated vesting of any equity incentive interests if terminated without cause or terminated for good reason. These employment agreements automatically renew thereafter for successive one-year periods unless either the Company or the employee give written notice to the other at least sixty (60) days prior to the end of the applicable term.

 

Ms. Luvleen Sidhu is entitled to receive an annual base salary of at least $275,000 pursuant to her employment agreement and incentive compensation in an amount, in such form, and at such time as approved by the Company’s board of directors following the Business Combination. Such incentive compensation may take the form of cash payments (“Cash Bonus”), transfers of stock, stock appreciation awards, restricted stock units or stock options. Ms. Luvleen Sidhu is entitled to receive severance compensation in the event of a termination of her employment by the Company without “Cause” or by the executive for “Good Reason” in an amount equal to the sum of her then-current base salary plus the average of the annual performance bonus (consisting of both cash and other incentive compensation, but excluding the Company match of any deferred compensation) provided to her with respect to the three (3) fiscal years of the Company immediately preceding the fiscal year of termination, for the greater of two (2) years or the period of time remaining in the applicable term, paid in equal installments on the normal pay dates following Ms. Luvleen Sidhu’s separation from service with the Company, subject to execution of a release of claims. Ms. Luvleen Sidhu is also eligible for employee benefits and to a fraction of any Cash Bonus for the fiscal year of the Company within which Ms. Luvleen Sidhu’s termination of employment occurs which, based upon the criteria established for such Cash Bonus, would have been payable to her had she remained employed through the date of payment.

 

Messrs. Crawford, Diegel, and Taylor are entitled to receive an annual base salary of at least $279,292, $250,000 and $250,000, respectively, pursuant to their respective employment agreement and incentive compensation in an amount, in such form, and at such time as approved by the Company’s board of directors. Each of these executives is entitled to receive severance compensation in the event of a termination of his employment by the Company without “Cause” or by the executive for “Good Reason” in an amount equal to the sum of their then current base salary plus the average of the annual performance bonus (consisting of both cash and other incentive compensation, but excluding the Company match of any deferred compensation) provided to them with respect to the three (3) fiscal years of the Company immediately preceding the fiscal year of termination, for the greater of one (1) year or the period of time remaining in the applicable term, paid in equal installments on the normal pay dates following their separation from service with the Company, subject to execution of a release of claims. Messrs. Crawford, Diegel, and Taylor are also eligible for employee benefits and to a fraction of any Cash Bonus for the fiscal year of the Company within which their termination of employment occurs which, based upon the criteria established for such Cash Bonus, would have been payable to them had they remained employed through the date of payment. 

 

This summary is qualified in its entirety by reference to the text of the employment agreements, which are included as Exhibits 10.9, 10.10, 10.11, and 10.12 to this Current Report on Form 8-K and is incorporated herein by reference.

 

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

 

The information set forth in Item 3.03 of this Current Report on Form 8-K is incorporated by reference into this Item 5.03.

 

Item 5.06. Change in Shell Company Status.

 

As a result of the Business Combination, Megalith ceased being a shell company. Reference is made to the disclosure in the Proxy Statement/Prospectus in the section titled “The Business Combination Proposal,” which is incorporated herein by reference. The information contained in Item 2.01 of this Current Report on Form 8-K is incorporated by reference into this Item 5.06.

 

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Item 8.01. Other Events

 

As a result of the Business Combination and by operation of Rule 12g-3(a) promulgated under the Exchange Act, the Company is a successor issuer to Megalith. The Company hereby reports this succession in accordance with Rule 12g-3(f) under the Exchange Act.

 

Item 9.01. Financial Statement and Exhibits.

 

(a) Financial statements of businesses acquired.

 

Information responsive to Item 9.01(a) of Form 8-K is set forth in the financial statements included in the Proxy Statement/Prospectus beginning on page F-1, which are incorporated herein by reference.

 

(b) Pro forma financial information.

 

The unaudited pro forma financial statements are filed as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.

 

(c) Shell company transactions.

 

Reference is made to Items 9.01(a) and (b) and the exhibit referred to therein, which are incorporated herein by reference.

 

Exhibit No.   Description
2.1†   Agreement and Plan of Merger, dated August 6, 2020, by and among Megalith, Merger Sub, BankMobile, and Customers Bank (incorporated by reference to the Company’s Form 8-K, filed with the SEC on August 6, 2020).
2.2†   First Amendment to Agreement and Plan of Merger, dated November 2, 2020, by and among Megalith, Merger Sub, BankMobile, Customers Bank, and Customers Bancorp (incorporated by reference to the Company’s Form 8-K, filed with the SEC on November 2, 2020).
2.3†   Second Amendment to Agreement and Plan of Merger, dated December 8, 2020, by and among Megalith, Merger Sub, BankMobile, Customers Bank, and Customers Bancorp (incorporated by reference to the Company’s Form 8-K, filed with the SEC on December 8, 2020).
3.1*   Second Amended and Restated Certificate of Incorporation of the Company.
3.2*   Amended and Restated Bylaws of the Company.
10.1*†   Transition Services Agreement, dated January 4, 2021, by and between Customers Bank and the Company.
10.2*†   Software License Agreement, dated January 4, 2021, by and between Customers Bank and the Company.
10.3*†   Deposit Processing Services Agreement, dated January 4, 2021, by and between the Company and Customers Bank.
10.4*   Non-Competition and Non-Solicitation Agreement, dated January 4, 2021, by and between the Company and Customers Bank.
10.5*   Form of Indemnification Agreement between the Company and certain officers and directors of the Company.
10.6*†   Loan Agreement, January 4, 2021, between Customers Bank, the Company and BMTX, Inc.
10.7*+   2020 Equity Incentive Plan.
10.8*+   Employment Agreement with Luvleen Sidhu, dated January 4, 2021.
10.9*+   Employment Agreement with Robert Diegel, dated January 4, 2021.
10.10*+   Employment Agreement with Andrew Crawford, dated January 4, 2021.
10.11*+   Employment Agreement with Warren Taylor, dated January 4, 2021.
10.12   Form of Subscription Agreement between Megalith and the PIPE Investors named therein, dated August 5, 2020 (Incorporated by reference to Exhibit 10.5 of Megalith’s Form 8-K (File No. 001-38633), filed with the SEC on August 6, 2020).
99.1*   Unaudited pro forma financial statements.

 

 

* Filed herewith
+ Indicates a management or compensatory plan.
Schedules to this exhibit have been omitted pursuant to Item 601(b)(2) of Registration S-K. The Registrant hereby agrees to furnish a copy of any omitted schedules to the SEC upon request.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  BM Technologies, Inc.
   
Dated: January 8, 2021  By: /s/ Luvleen Sidhu
    Luvleen Sidhu
    Chief Executive Officer

 

 

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Exhibit 3.1

 

SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
MEGALITH FINANCIAL ACQUISITION CORP.

 

January 4, 2021

 

Megalith Financial Acquisition Corp., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), DOES HEREBY CERTIFY AS FOLLOWS:

 

1. The name of the Corporation is “Megalith Financial Acquisition Corp.”  The original certificate of incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on November 13, 2017 (the “Original Certificate”).

 

2. The Original Certificate was amended and restated by the provisions of the Amended and Restated Certificate of Incorporation (the “First Amended and Restated Certificate”) which was filed with the Secretary of State of the State of Delaware on August 23, 2018.

 

3. The First Amended and Restated Certificate was amended by the provisions of the Amendment to the Amended and Restated Certificate of Incorporation (the “May Amendment”; and together with First Amended and Restated Certificate” the “Initial Amended First Amended and Restated Certificate”) which was filed with the Secretary of State of the State of Delaware on May 26, 2020.

 

4. The Initial Amended First Amended and Restated Certificate was amended by the provisions of the Amendment to the Amended and Restated Certificate of Incorporation (the “November Amendment”; and together with Initial Amended First Amended and Restated Certificate” the “Amended First Amended and Restated Certificate”) which was filed with the Secretary of State of the State of Delaware on November 24, 2020.

 

5. This Second Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate”), was duly adopted by the Board of Directors of the Corporation and by the stockholders of the Corporation in accordance with Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware as amended, from time to time (the “DGCL”).

 

6. This Amended and Restated Certificate amends and restates in its entirety the provisions of the Amended First Amended and Restated Certificate.

 

7. This Amended and Restated Certificate shall become effective on the date of filing with Secretary of State of Delaware.

 

8. The text of the Amended First Amended and Restated Certificate is hereby amended and restated in its entirety to read as follows:

 

ARTICLE I
NAME

 

The name of the corporation is BM Technologies, Inc. (the “Corporation”).

 

ARTICLE II
PURPOSE

 

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL.

 

ARTICLE III
REGISTERED AGENT

 

The address of the Corporation’s registered office in the State of Delaware is 251 Little Falls Drive, in the City of Wilmington, County of New Castle, State of Delaware, 19808, and the name of the Corporation’s registered agent at such address is Corporation Service Company.

 

 

 

 

ARTICLE IV
CAPITALIZATION

 

Section 4.1 Authorized Capital Stock. The Corporation is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares which the Corporation is authorized to issue is 1,010,000,000 shares. 1,000,000,000 shares shall be Common Stock, each having a par value of one-hundredth of one cent ($0.0001). 10,000,000 shares shall be Preferred Stock, each having a par value of one-hundredth of one cent ($0.0001).

 

Section 4.2 Conversion of Class A Common Stock. Effective immediately upon the filing and effectiveness of this Amended and Restated Certificate with the Office of the Secretary of State of the State of Delaware (the “Effective Time”), each one share of the Corporation’s Class A Common Stock, par value $0.0001 per share (the “Class A Common Stock”), that was issued and outstanding immediately prior to the Effective Time shall automatically be reclassified, redesignated and changed into (a) one validly issued, fully paid and non-assessable share of Common Stock of the Corporation, par value $0.0001 per share (the “Common Stock”), without any further action by the Corporation or any stockholder thereof. Each certificate that immediately prior to the Effective Time represented shares of Class A Common Stock (each, a “Prior Certificate”) shall, until surrendered to the Corporation in exchange for a certificate representing the same number of shares of Common Stock, automatically represent that number of shares of Common Stock into which the shares of Class A Common Stock represented by the Prior Certificate shall have been reclassified and redesignated.

 

Section 4.2 Preferred Stock. The Board of Directors of the Corporation (the “Board”) is hereby expressly authorized to provide out of the unissued shares of the Preferred Stock for one or more series of Preferred Stock and to establish from time to time the number of shares to be included in each such series and to fix the voting rights, if any, designations, powers, preferences and relative, participating, optional, special and other rights, if any, of each such series and any qualifications, limitations and restrictions thereof, as shall be stated in the resolution or resolutions adopted by the Board providing for the issuance of such series and included in a certificate of designation (a “Preferred Stock Designation”) filed pursuant to the DGCL, and the Board is hereby expressly vested with the authority to the full extent provided by law, now or hereafter, to adopt any such resolution or resolutions.

 

Section 4.3 Common Stock.

 

(a) Voting. Except as otherwise required by law or this Amended and Restated Certificate (including any Preferred Stock Designation), the holders of the Common Stock shall exclusively possess all voting power with respect to the Corporation. Each outstanding share of Common Stock shall entitle the holder thereof to one vote on each matter properly submitted to the stockholders of the Corporation for their vote; provided, however, that, except as otherwise required by law, holders of Common Stock shall not be entitled to vote on any amendment to this Amended and Restated Certificate (including any certificate of designation filed with respect to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon by law or pursuant to this Amended and Restated Certificate (including any certificate of designation filed with respect to any series of Preferred Stock).

 

(b) Dividends. Subject to applicable law, the rights, if any, of the holders of any outstanding series of the Preferred Stock, the holders of shares of Common Stock shall be entitled to receive such dividends and other distributions (payable in cash, property or capital stock of the Corporation) when, as and if declared thereon by the Board from time to time out of any assets or funds of the Corporation legally available therefor and shall share equally on a per share basis in such dividends and distributions.

 

(c) Liquidation, Dissolution or Winding Up of the Corporation. Subject to applicable law, the rights, if any, of the holders of any outstanding series of the Preferred Stock, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, after payment or provision for payment of the debts and other liabilities of the Corporation, the holders of shares of Common Stock shall be entitled to receive all the remaining assets of the Corporation available for distribution to its stockholders, ratably in proportion to the number of shares of Common Stock held by them.

 

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ARTICLE V
BOARD OF DIRECTORS

 

Section 5.1 Board Powers. The business and affairs of the Corporation shall be managed by, or under the direction of, the Board. In addition to the powers and authority expressly conferred upon the Board by statute, this Amended and Restated Certificate or the Bylaws of the Corporation (“Bylaws”), the Board is hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of the DGCL, this Amended and Restated Certificate, and any Bylaws adopted by the stockholders of the Corporation; provided, however, that no Bylaws hereafter adopted by the stockholders of the Corporation shall invalidate any prior act of the Board that would have been valid if such Bylaws had not been adopted.

 

Section 5.2 Number, Election and Term.

 

(a) The number of directors of the Corporation, other than those who may be elected by the holders of one or more series of the Preferred Stock voting separately by class or series, shall be fixed from time to time exclusively by the Board pursuant to a resolution adopted by a majority of the Board.

 

(b) Subject to Section 5.5 hereof, the Board shall be divided into three classes, as nearly equal in number as possible and designated Class I, Class II and Class III. The Board is authorized to assign members of the Board already in office to Class I, Class II or Class III. The term of the initial Class I Directors shall expire at the first annual meeting of the stockholders of the Corporation following the effectiveness of this Amended and Restated Certificate, the term of the initial Class II Directors shall expire at the second annual meeting of the stockholders of the Corporation following the effectiveness of this Amended and Restated Certificate and the term of the initial Class III Directors shall expire at the third annual meeting of the stockholders of the Corporation following the effectiveness of this Amended and Restated Certificate. At each succeeding annual meeting of the stockholders of the Corporation, beginning with the first annual meeting of the stockholders of the Corporation following the effectiveness of this Amended and Restated Certificate, each of the successors elected to replace the class of directors whose term expires at that annual meeting shall be elected for a three-year term or until the election and qualification of their respective successors in office, subject to their earlier death, resignation or removal. Subject to Section 5.5 hereof, if the number of directors that constitutes the Board is changed, any increase or decrease shall be apportioned by the Board among the classes so as to maintain the number of directors in each class as nearly equal as possible, but in no case shall a decrease in the number of directors constituting the Board shorten the term of any incumbent director. Subject to the rights of the holders of one or more series of Preferred Stock, voting separately by class or series, to elect directors pursuant to the terms of one or more series of Preferred Stock, the election of directors shall be determined by a plurality of the votes cast by the stockholders present in person or represented by proxy at the meeting and entitled to vote thereon. The Board is hereby expressly authorized, by resolution or resolutions thereof, to assign members of the Board already in office to the aforesaid classes at the time this Amended and Restated Certificate (and therefore such classification) becomes effective in accordance with the DGCL.

 

(c) Subject to Section 5.5 hereof, a director shall hold office until the annual meeting for the year in which his or her term expires and until his or her successor has been elected and qualified, subject, however, to such director’s earlier death, resignation, retirement, disqualification or removal.

 

(d) Unless and except to the extent that the Bylaws shall so require, the election of directors need not be by written ballot.

 

Section 5.3 Newly Created Directorships and Vacancies. Newly created directorships resulting from an increase in the number of directors and any vacancies on the Board resulting from death, resignation, retirement, disqualification, removal or other cause may be filled solely and exclusively by a majority vote of the remaining directors then in office, even if less than a quorum, or by a sole remaining director (and not by stockholders), and any director so chosen shall hold office for the remainder of the full term of the class of directors to which the new directorship was added or in which the vacancy occurred and until his or her successor has been elected and qualified, subject, however, to such director’s earlier death, resignation, retirement, disqualification or removal.

 

Section 5.4 Removal. Any or all of the directors may be removed from office at any time, but only for cause and only by the affirmative vote of holders of at least 662/3% of the voting power of all then-outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.

 

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Section 5.5 Preferred Stock Directors. Whenever the holders of any one or more series of Preferred Stock issued by the Corporation shall have the right, voting separately as a series or separately as a class with one or more such other series, to elect directors at an annual or special meeting of stockholders, the election, term of office, removal and other features of such directorships shall be governed by the terms of this Amended and Restated Certificate (including any certificate of designations relating to any series of Preferred Stock) applicable thereto. Notwithstanding Section 5.2, the number of directors that may be elected by the holders of any such series of Preferred Stock shall be in addition to the number fixed pursuant to Section 5.2 hereof, and the total number of directors constituting the whole Board shall be automatically adjusted accordingly.

 

ARTICLE VI
BYLAWS

 

In furtherance and not in limitation of the powers conferred by the DGCL, the Board is expressly authorized to make, amend, alter, change, add to or repeal the Bylaws of the Corporation without the assent or vote of the stockholders in any manner not inconsistent with the laws of the State of Delaware or this Amended and Restated Certificate. Notwithstanding anything to the contrary contained in this Amended and Restated Certificate or any provision of law which might otherwise permit a lesser vote of the stockholders, in addition to any vote of the holders of any class or series of capital stock of the Corporation required herein (including any certificate of designation relating to any series of Preferred Stock), by the Bylaws or pursuant to applicable law, the affirmative vote of the holders of at least 662/3% of the total voting power of all the issued and outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required in order for the stockholders of the Corporation to alter, amend, repeal or rescind, in whole or in part, any provision of the Bylaws of the Corporation or to adopt any provision inconsistent therewith.

 

ARTICLE VII
SPECIAL MEETINGS OF STOCKHOLDERS; ACTION BY WRITTEN CONSENT

 

Section 7.1 Special Meetings. Subject to the rights, if any, of the holders of any outstanding series of the Preferred Stock, and to the requirements of applicable law, special meetings of stockholders of the Corporation may be called only by the Chairman of the Board, Chief Executive Officer of the Corporation, or the Board pursuant to a resolution adopted by a majority of the Board, and the ability of the stockholders of the Corporation to call a special meeting is hereby specifically denied. Except as provided in the foregoing sentence, special meetings of stockholders of the Corporation may not be called by another person or persons.

 

Section 7.2 Advance Notice. Advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in the Bylaws.

 

Section 7.3 Action by Written Consent. Except as may be otherwise provided for or fixed pursuant to this Amended and Restated Certificate (including any Preferred Stock Designation) relating to the rights of the holders of any outstanding series of Preferred Stock, subsequent to the consummation of the Offering, any action required or permitted to be taken by the stockholders of the Corporation must be effected by a duly called annual or special meeting of such stockholders and may not be effected by written consent of the stockholders.

 

ARTICLE VIII
LIMITED LIABILITY; INDEMNIFICATION

 

Section 8.1 Limitation of Director Liability. The liability of the directors for monetary damages shall be eliminated to the fullest extent permitted by applicable law. Any amendment, modification or repeal of the foregoing sentence shall not adversely affect any right or protection of a director of the Corporation hereunder in respect of any act or omission occurring prior to the time of such amendment, modification or repeal.

 

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Section 8.2 Indemnification and Advancement of Expenses.

 

(a) To the fullest extent permitted by applicable law, the Corporation is authorized to provide indemnification of (and advancement of expenses to) directors, officers and agents of the Corporation (and any other persons to which applicable law permits the Corporation to provide indemnification) through Bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise in excess of the indemnification and advancement otherwise permitted by such applicable law. If applicable law is amended after approval by the stockholders of this Section 8.2 to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director to the Corporation shall be eliminated or limited to the fullest extent permitted by applicable law as so amended.

 

(b) Any repeal or modification of this Section 8.2 shall only be prospective and shall not affect the rights or protections or increase the liability of any director under this Section 8.2 in effect at the time of the alleged occurrence of any act or omission to act giving rise to liability or indemnification.

 

ARTICLE IX
DGCL SECTION 203 AND BUSINESS COMBINATIONS

 

Section 9.1 DGCL Section 203. The Corporation hereby expressly elects not to be governed by Section 203 of the DGCL.

 

Section 9.2 Business Combinations. Notwithstanding the foregoing, the Corporation shall not engage in any Business Combination (as defined below), at any point in time at which the Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act of 1934, as amended (the “Exchange Act”), with any Interested Stockholder (as defined below) for a period of three years following the time that such stockholder became an Interested Stockholder, unless:

 

1. prior to such time, the Board of Directors approved either the business combination or the transaction which resulted in the stockholder becoming an Interested Stockholder, or

 

2. upon consummation of the transaction that resulted in the stockholder becoming an Interested Stockholder, the Interested Stockholder owned at least 85% of the Voting Stock (as defined below) of the Corporation outstanding at the time the transaction commenced, excluding for purposes of determining the Voting Stock outstanding (but not the outstanding voting stock owned by the Interested Stockholder) those shares owned (a) by persons who are directors and also officers and (b) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer, or

 

3. at or subsequent to such time, the Business Combination is approved by the Board of Directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 662/3% of the outstanding Voting Stock of the Corporation that is not owned by the interested stockholder.

 

Section 9.3 Definitions.

 

For purposes of this Article IX, references to:

 

1. “Affiliate” means a person that directly, or indirectly through one or more intermediaries, Controls, or is Controlled by, or is under common Control with, another person.

 

2. “Associate,” when used to indicate a relationship with any person, means: (a) any corporation, partnership, unincorporated association or other entity of which such person is a director, officer or partner or is, directly or indirectly, the owner of 20% or more of any class of Voting Stock; (b) any trust or other estate in which such person has at least a 20% beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity; and (c) any relative or spouse of such person, or any relative of such spouse, who has the same residence as such person.

 

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3. “Business Combination,” when used in reference to the Corporation and any Interested Stockholder of the Corporation, means: (a) any merger or consolidation of the Corporation or any direct or indirect majority owned subsidiary of the Corporation (i) with the Interested Stockholder, or (ii) with any other corporation, partnership, unincorporated association or other entity if the merger or consolidation is caused by the Interested Stockholder and, as a result of such merger or consolidation, Section (B) of this Article VIII is not applicable to the surviving entity; (b) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), except proportionately as a stockholder of the Corporation, to or with the Interested Stockholder, whether as part of a dissolution or otherwise, of assets of the Corporation or of any direct or indirect majority owned subsidiary of the Corporation which assets have an aggregate market value equal to 10% or more of either the aggregate market value of all the assets of the Corporation determined on a consolidated basis or the aggregate market value of all the outstanding stock of the Corporation; (c) any transaction which results in the issuance or transfer by the Corporation or by any direct or indirect majority owned subsidiary of the Corporation of any stock of the Corporation or of such subsidiary to the Interested Stockholder, except: (i) pursuant to the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into stock of the Corporation or any such subsidiary which securities were outstanding prior to the time that the interested stockholder became such; (ii) pursuant to a merger under Section 251(g) of the DGCL; (iii) pursuant to a dividend or distribution paid or made, or the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into stock of the Corporation or any such subsidiary which security is distributed, pro rata to all holders of a class or series of stock of the Corporation subsequent to the time the Interested Stockholder became such; (iv) pursuant to an exchange offer by the Corporation to purchase stock made on the same terms to all holders of said stock; or (v) any issuance or transfer of stock by the Corporation; provided, however, that in no case under items (iii)-(v) of this subsection (c) shall there be an increase in the Interested Stockholder’s proportionate share of the stock of any class or series of the Corporation or of the Voting Stock of the Corporation (except as a result of immaterial changes due to fractional share adjustments); (d) any transaction involving the Corporation or any direct or indirect majority owned subsidiary of the Corporation which has the effect, directly or indirectly, of increasing the proportionate share of the stock of any class or series, or securities convertible into the stock of any class or series, of the Corporation or of any such subsidiary which is owned by the Interested Stockholder, except as a result of immaterial changes due to fractional share adjustments or as a result of any purchase or redemption of any shares of stock not caused, directly or indirectly, by the Interested Stockholder; or (e) any receipt by the Interested Stockholder of the benefit, directly or indirectly (except proportionately as a stockholder of the Corporation), of any loans, advances, guarantees, pledges, or other financial benefits (other than those expressly permitted in subsections (a)-(d) above) provided by or through the Corporation or any direct or indirect majority owned subsidiary.

 

4. “Customers Bank” means Customers Bancorp, Inc., a Pennsylvania corporation, and Customers Bank, a Pennsylvania state-chartered bank and its wholly-owned subsidiary.

 

5. “Customers Bank Direct Transferee” means any person that acquires (other than in a registered public offering) directly from Customers Bank or any of its Affiliates or successors or any “group,” or any member of any such group, of which such persons are a party under Rule 13d-5 of the Exchange Act beneficial ownership of 15% or more of the then outstanding Voting Stock of the Corporation.

 

6. “Customers Bank Indirect Transferee” means any person that acquires (other than in a registered public offering) directly from any Customers Bank Direct Transferee or any other Customers Bank Indirect Transferee beneficial ownership of 15% or more of the then outstanding Voting Stock of the Corporation.

 

7. “Control,” including the terms “Controlling,” “Controlled by,” and “under common Control with,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of Voting Stock, by contract, or otherwise. A person who is the owner of 20% or more of the outstanding Voting Stock of the Corporation, partnership, unincorporated association or other entity shall be presumed to have control of such entity, in the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding the foregoing, a presumption of control shall not apply where such person holds voting stock, in good faith and not for the purpose of circumventing this Section, as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually or as a group have control of such entity.

 

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8. “Interested Stockholder” means any person (other than the Corporation or any direct or indirect majority owned subsidiary of the Corporation) that (a) is the owner of 15% or more of the outstanding Voting Stock of the Corporation, or (b) is an Affiliate or Associate of the Corporation and was the owner of 15% or more of the outstanding Voting Stock of the Corporation at any time within the three year period immediately prior to the date on which it is sought to be determined whether such person is an Interested Stockholder; and the Affiliates and Associates of such person; but “Interested Stockholder” shall not include (i) Customers Bank, any Customers Bank Direct Transferee, any Customers Bank Indirect Transferee or any of their respective Affiliates or successors or any “group,” or any member of any such group, to which such persons are a party under Rule 13d-5 of the Exchange Act, or (ii) any person whose ownership of shares in excess of the 15% limitation set forth herein is the result of any action taken solely by the Corporation, provided that such person shall be an Interested Stockholder if thereafter such person acquires additional shares of Voting Stock of the Corporation, except as a result of further corporate action not caused, directly or indirectly, by such person. For the purpose of determining whether a person is an Interested Stockholder, the voting stock of the Corporation deemed to be outstanding shall include stock deemed to be owned by the person through application of the definition of Owner but shall not include any other unissued stock of the Corporation which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise.

 

9. “owner,” including the terms “own” and “owned,” when used with respect to any stock, means a person that individually or with or through any of its Affiliates or Associates (a) beneficially owns such stock, directly or indirectly; (b) has (i) the right to acquire such stock (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise; provided, however, that a person shall not be deemed the owner of stock tendered pursuant to a tender or exchange offer made by such person or any of such person’s Affiliates or Associates until such tendered stock is accepted for purchase or exchange; or (ii) the right to vote such stock pursuant to any agreement, arrangement or understanding; provided, however, that a person shall not be deemed the owner of any stock because of such person’s right to vote such stock if the agreement, arrangement or understanding to vote such stock arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made to 10 or more persons; or (c) has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy or consent as described in item (ii) of subsection (b) above), or disposing of such stock with any other person that beneficially owns, or whose Affiliates or Associates beneficially own, directly or indirectly, such stock.

 

10. “person” means any individual, corporation, partnership, unincorporated association or other entity.

 

11. “stock” means, with respect to any corporation, capital stock and, with respect to any other entity, any equity interest.

 

12. “Voting Stock” means stock of any class or series entitled to vote generally in the election of directors.

 

ARTICLE X
CORPORATE OPPORTUNITY

 

To the extent allowed by law, the doctrine of corporate opportunity, or any other analogous doctrine, shall not apply with respect to the Corporation or any of its officers or directors, or any of their respective affiliates, in circumstances where the application of any such doctrine would conflict with any fiduciary duties or contractual obligations they may have as of the date of this Amended and Restated Certificate or in the future, and the Corporation renounces any expectancy that any of the directors or officers of the Corporation will offer any such corporate opportunity of which he or she may become aware to the Corporation, except, the doctrine of corporate opportunity shall apply with respect to any of the directors or officers of the Corporation with respect to a corporate opportunity that was offered to such person solely in his or her capacity as a director or officer of the Corporation and (i) such opportunity is one the Corporation is legally and contractually permitted to undertake and would otherwise be reasonable for the Corporation to pursue and (ii) the director or officer is permitted to refer that opportunity to the Corporation without violating any legal obligation.

 

ARTICLE XI
AMENDMENT OF AMENDED AND RESTATED CERTIFICATE

 

Notwithstanding anything contained in this Amended and Restated Certificate to the contrary, the following provisions in this Amended and Restated Certificate may be amended, altered, repealed or rescinded, in whole or in part, or any provision inconsistent therewith or herewith may be adopted, only by the affirmative vote of the holders of at least 662/3% of the total voting power of all the issued and outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class: Article V, Article VI, Article VII, Article VIII, Article IX, this Article XI, and Article XII. Except as expressly provided in the foregoing sentence and the remainder of this Amended and Restated Certificate (including any certificate of designation relating to any series of Preferred Stock), this Amended and Restated Certificate may be amended by the affirmative vote of the holders of at least a majority of the total voting power of all the then outstanding shares of stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.

 

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ARTICLE XII
FORUM; SEVERABILITY

 

Section 12.1 Forum. Subject to the last sentence in this Section 12.1, and unless the Corporation consents in writing to the selection of an alternative forum, to the fullest extent permitted by the applicable law, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for any stockholder (including a beneficial owner) to bring (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim against the Corporation, its directors, officers or employees arising pursuant to any provision of the DGCL or this Amended and Restated Certificate or the Bylaws, or (iv) any action asserting a claim against the Corporation, its directors, officers or employees governed by the internal affairs doctrine and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel except any action (A) as to which the Court of Chancery in the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or (C) for which the Court of Chancery does not have subject matter jurisdiction. Notwithstanding the foregoing, (i) the provisions of this Section 12.1 will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction and (ii) unless the Corporation consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended, or the rules and regulations promulgated thereunder.

 

Section 12.2 Consent to Jurisdiction. If any action the subject matter of which is within the scope of Section 12.1 immediately above is filed in a court other than a court located within the State of Delaware (a “Foreign Action”) in the name of any stockholder, such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce Section 12.1 immediately above (an “FSC Enforcement Action”) and (ii) having service of process made upon such stockholder in any such FSC Enforcement Action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder.

 

Section 12.3 Severability. If any provision or provisions of this Amended and Restated Certificate shall be held to be invalid, illegal or unenforceable as applied to any person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Amended and Restated Certificate (including, without limitation, each portion of any sentence of this Amended and Restated Certificate containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby.

 

Section 12.4 Notice and Consent to Provisions. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article XII.

 

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate to be duly executed and acknowledged in its name and on its behalf by an authorized officer as of the date first set forth above.

 

  MEGALITH FINANCIAL ACQUISITION CORP.
   
 

By:

/s/ A.J. Dunklau
  Name:  A.J. Dunklau
  Title: Chief Executive Officer

 

[Signature Page to Second Amended and Restated Certificate of Incorporation]

 

 

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Exhibit 3.2

 

AMENDED AND RESTATED BYLAWS

OF

BM Technologies, Inc.

(THE “CORPORATION”)

 

ARTICLE I

 

OFFICES

 

Section 1.1. Registered Office. The registered office of the Corporation within the State of Delaware shall be located at either (a) the principal place of business of the Corporation in the State of Delaware or (b) the office of the corporation or individual acting as the Corporation’s registered agent in Delaware.

 

Section 1.2. Additional Offices. The Corporation may, in addition to its registered office in the State of Delaware, have such other offices and places of business, both within and outside the State of Delaware, as the Board of Directors of the Corporation (the “Board”) may from time to time determine or as the business and affairs of the Corporation may require.

 

ARTICLE II

 

STOCKHOLDERS MEETINGS

 

Section 2.1. Annual Meetings. The annual meeting of stockholders shall be held at such place, either within or without the State of Delaware, and time and on such date as shall be determined by the Board and stated in the notice of the meeting, provided that the Board may in its sole discretion determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication pursuant to Section 9.5(a). At each annual meeting, the stockholders entitled to vote on such matters shall elect those directors of the Corporation to fill any term of a directorship that expires on the date of such annual meeting and may transact any other business as may properly be brought before the meeting.

 

Section 2.2. Special Meetings. Subject to the rights of the holders of any outstanding series of the preferred stock of the Corporation (“Preferred Stock”), and to the requirements of applicable law, special meetings of stockholders, for any purpose or purposes, may be called only by the Chairman of the Board, Chief Executive Officer, or the Board pursuant to a resolution adopted by a majority of the Board, and may not be called by any other person. Special meetings of stockholders shall be held at such place, either within or without the State of Delaware, and at such time and on such date as shall be determined by the Board and stated in the Corporation’s notice of the meeting, provided that the Board may in its sole discretion determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication pursuant to Section 9.5(a).

 

Section 2.3. Notices. Written notice of each stockholders meeting stating the place, if any, date, and time of the meeting, and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting and the record date for determining the stockholders entitled to vote at the meeting, if such date is different from the record date for determining stockholders entitled to notice of the meeting, shall be given in the manner permitted by Section 9.3 to each stockholder entitled to vote thereat as of the record date for determining the stockholders entitled to notice of the meeting, by the Corporation not less than 10 nor more than 60 days before the date of the meeting unless otherwise required by the General Corporation Law of the State of Delaware (the “DGCL”). If said notice is for a stockholders meeting other than an annual meeting, it shall in addition state the purpose or purposes for which the meeting is called, and the business transacted at such meeting shall be limited to the matters so stated in the Corporation’s notice of meeting (or any supplement thereto). Any meeting of stockholders as to which notice has been given may be postponed, and any meeting of stockholders as to which notice has been given may be cancelled, by the Board upon public announcement (as defined in Section 2.7(c)) given before the date previously scheduled for such meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the Corporation.

 

 

 

 

Section 2.4. Quorum. Except as otherwise provided by applicable law, the Corporation’s Certificate of Incorporation, as the same may be amended or restated from time to time (the “Certificate of Incorporation”) or these Bylaws, the presence, in person or by proxy, at a stockholders meeting of the holders of shares of outstanding capital stock of the Corporation representing a majority of the voting power of all outstanding shares of capital stock of the Corporation entitled to vote at such meeting shall constitute a quorum for the transaction of business at such meeting, except that when specified business is to be voted on by a class or series of stock voting as a class, the holders of shares representing a majority of the voting power of the outstanding shares of such class or series shall constitute a quorum of such class or series for the transaction of such business. If a quorum shall not be present or represented by proxy at any meeting of the stockholders of the Corporation, the chairman of the meeting may adjourn the meeting from time to time in the manner provided in Section 2.6 until a quorum shall attend. The stockholders present at a duly convened meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the voting power of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the Corporation or any such other corporation to vote shares held by it in a fiduciary capacity.

 

Section 2.5. Voting of Shares.

 

(a) Voting Lists. The Secretary of the Corporation (the “Secretary”) shall prepare, or shall cause the officer or agent who has charge of the stock ledger of the Corporation to prepare and make, at least 10 days before every meeting of stockholders, a complete list of the stockholders of record entitled to vote at such meeting; provided, however, that if the record date for determining the stockholders entitled to vote is less than 10 days before the meeting date, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date, arranged in alphabetical order and showing the address and the number and class of shares registered in the name of each stockholder. Nothing contained in this Section 2.5(a) shall require the Corporation to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours for a period of at least 10 days prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If a meeting of stockholders is to be held solely by means of remote communication as permitted by Section 9.5(a), the list shall be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of meeting. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the list required by this Section 2.5(a) or to vote in person or by proxy at any meeting of stockholders.

 

(b) Manner of Voting. At any stockholders meeting, every stockholder entitled to vote may vote in person or by proxy. If authorized by the Board, the voting by stockholders or proxy holders at any meeting conducted by remote communication may be effected by a ballot submitted by electronic transmission (as defined in Section 9.3), provided that any such electronic transmission must either set forth or be submitted with information from which the Corporation can determine that the electronic transmission was authorized by the stockholder or proxy holder. The Board, in its discretion, or the chairman of the meeting of stockholders, in such person’s discretion, may require that any votes cast at such meeting shall be cast by written ballot.

 

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(c) Proxies. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. Proxies need not be filed with the Secretary until the meeting is called to order, but shall be filed with the Secretary before being voted. Without limiting the manner in which a stockholder may authorize another person or persons to act for such stockholder as proxy, either of the following shall constitute a valid means by which a stockholder may grant such authority. No stockholder shall have cumulative voting rights.

 

(i) A stockholder may execute a writing authorizing another person or persons to act for such stockholder as proxy. Execution may be accomplished by the stockholder or such stockholder’s authorized officer, director, employee or agent signing such writing or causing such person’s signature to be affixed to such writing by any reasonable means, including, but not limited to, by facsimile signature.

   

(ii) A stockholder may authorize another person or persons to act for such stockholder as proxy by transmitting or authorizing the transmission of an electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission, provided that any such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the stockholder. Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission authorizing another person or persons to act as proxy for a stockholder may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used; provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.

 

(d) Required Vote. Subject to the rights of the holders of one or more series of Preferred Stock, voting separately by class or series, to elect directors pursuant to the terms of one or more series of Preferred Stock, at all meetings of stockholders at which a quorum is present, the election of directors shall be determined by a plurality of the votes cast by the stockholders present in person or represented by proxy at the meeting and entitled to vote thereon. All other matters presented to the stockholders at a meeting at which a quorum is present shall be determined by the vote of a majority of the votes cast by the stockholders present in person or represented by proxy at the meeting and entitled to vote thereon, unless the matter is one upon which, by applicable law, the Certificate of Incorporation, these Bylaws or applicable stock exchange rules, a different vote is required, in which case such provision shall govern and control the decision of such matter.

 

(e) Inspectors of Election. The Board may, and shall if required by law, in advance of any meeting of stockholders, appoint one or more persons as inspectors of election, who may be employees of the Corporation or otherwise serve the Corporation in other capacities, to act at such meeting of stockholders or any adjournment thereof and to make a written report thereof. The Board may appoint one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspectors of election or alternates are appointed by the Board, the chairman of the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before discharging his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall ascertain and report the number of outstanding shares and the voting power of each; determine the number of shares present in person or represented by proxy at the meeting and the validity of proxies and ballots; count all votes and ballots and report the results; determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors; and certify their determination of the number of shares represented at the meeting and their count of all votes and ballots. No person who is a candidate for an office at an election may serve as an inspector at such election. Each report of an inspector shall be in writing and signed by the inspector or by a majority of them if there is more than one inspector acting at such meeting. If there is more than one inspector, the report of a majority shall be the report of the inspectors.

 

Section 2.6. Adjournments. Any meeting of stockholders, annual or special, may be adjourned by the chairman of the meeting, from time to time, whether or not there is a quorum, to reconvene at the same or some other place. Notice need not be given of any such adjourned meeting if the date, time, and place, if any, thereof, and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken. At the adjourned meeting the stockholders, or the holders of any class or series of stock entitled to vote separately as a class, as the case may be, may transact any business that might have been transacted at the original meeting. If the adjournment is for more than 30 days, notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for stockholders entitled to vote is fixed for the adjourned meeting, the Board shall fix a new record date for notice of such adjourned meeting in accordance with Section 9.2, and shall give notice of the adjourned meeting to each stockholder of record entitled to vote at such adjourned meeting as of the record date fixed for notice of such adjourned meeting. 

 

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Section 2.7. Advance Notice for Business.

 

(a) Annual Meetings of Stockholders. No business may be transacted at an annual meeting of stockholders, other than business that is either (i) specified in the Corporation’s notice of meeting (or any supplement thereto) given by or at the direction of the Board, (ii) otherwise properly brought before the annual meeting by or at the direction of the Board or (iii) otherwise properly brought before the annual meeting by any stockholder of the Corporation (x) who is a stockholder of record entitled to vote at such annual meeting on the date of the giving of the notice provided for in this Section 2.7(a) and on the record date for the determination of stockholders entitled to vote at such annual meeting and (y) who complies with the notice procedures set forth in this Section 2.7(a). Notwithstanding anything in this Section 2.7(a) to the contrary, only persons nominated for election as a director to fill any term of a directorship that expires on the date of the annual meeting pursuant to Section 3.2 will be considered for election at such meeting.

 

(i) In addition to any other applicable requirements, for business (other than nominations) to be properly brought before an annual meeting by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary and such business must otherwise be a proper matter for stockholder action. Subject to Section 2.7(a)(iii), a stockholder’s notice to the Secretary with respect to such business, to be timely, must be received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the 90th day nor earlier than the opening of business on the 120th day before the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 120th day before the meeting and not later than the later of (x) the close of business on the 90th day before the meeting or (y) the close of business on the 10th day following the day on which public announcement of the date of the annual meeting is first made by the Corporation. The public announcement of an adjournment or postponement of an annual meeting shall not commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described in this Section 2.7(a).

 

(ii) To be in proper written form, a stockholder’s notice to the Secretary with respect to any business (other than nominations) must set forth as to each such matter such stockholder proposes to bring before the annual meeting (A) a brief description of the business desired to be brought before the annual meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event such business includes a proposal to amend these Bylaws, the language of the proposed amendment) and the reasons for conducting such business at the annual meeting, (B) the name and record address of such stockholder and the name and address of the beneficial owner, if any, on whose behalf the proposal is made, (C) the class or series and number of shares of capital stock of the Corporation that are owned beneficially and of record by such stockholder and by the beneficial owner, if any, on whose behalf the proposal is made, (D) a description of all arrangements or understandings between such stockholder and the beneficial owner, if any, on whose behalf the proposal is made and any other person or persons (including their names) in connection with the proposal of such business by such stockholder, (E) any material interest of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made in such business and (F) a representation that such stockholder (or a qualified representative of such stockholder) intends to appear in person or by proxy at the annual meeting to bring such business before the meeting.

 

(iii) The foregoing notice requirements of this Section 2.7(a) shall be deemed satisfied by a stockholder as to any proposal (other than nominations) if the stockholder has notified the Corporation of such stockholder’s intention to present such proposal at an annual meeting in compliance with Rule 14a-8 (or any successor thereof) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and such stockholder has complied with the requirements of such Rule for inclusion of such proposal in a proxy statement prepared by the Corporation to solicit proxies for such annual meeting. No business shall be conducted at the annual meeting of stockholders except business brought before the annual meeting in accordance with the procedures set forth in this Section 2.7(a), provided, however, that once business has been properly brought before the annual meeting in accordance with such procedures, nothing in this Section 2.7(a) shall be deemed to preclude discussion by any stockholder of any such business. If the Board or the chairman of the annual meeting determines that any stockholder proposal was not made in accordance with the provisions of this Section 2.7(a) or that the information provided in a stockholder’s notice does not satisfy the information requirements of this Section 2.7(a), such proposal shall not be presented for action at the annual meeting. Notwithstanding the foregoing provisions of this Section 2.7(a), if the stockholder (or a qualified representative of the stockholder) does not appear at the annual meeting of stockholders of the Corporation to present the proposed business, such proposed business shall not be transacted, notwithstanding that proxies in respect of such matter may have been received by the Corporation. 

 

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(iv) In addition to the provisions of this Section 2.7(a), a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth herein. Nothing in this Section 2.7(a) shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act.

 

(b) Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting only pursuant to Section 3.2.

 

(c) Public Announcement. For purposes of these Bylaws, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act (or any successor thereto).

 

Section 2.8. Conduct of Meetings. The chairman of each annual and special meeting of stockholders shall be the Chairman of the Board or, in the absence (or inability or refusal to act) of the Chairman of the Board, the Chief Executive Officer (if he or she shall be a director) or, in the absence (or inability or refusal to act of the Chief Executive Officer or if the Chief Executive Officer is not a director, the President (if he or she shall be a director) or, in the absence (or inability or refusal to act) of the President or if the President is not a director, such other person as shall be appointed by the Board. The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting by the chairman of the meeting. The Board may adopt such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with these Bylaws or such rules and regulations as adopted by the Board, the chairman of any meeting of stockholders shall have the right and authority to convene and to adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board or prescribed by the chairman of the meeting, may include, without limitation, the following: (a) the establishment of an agenda or order of business for the meeting; (b) rules and procedures for maintaining order at the meeting and the safety of those present; (c) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the chairman of the meeting shall determine; (d) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (e) limitations on the time allotted to questions or comments by participants. Unless and to the extent determined by the Board or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure. The secretary of each annual and special meeting of stockholders shall be the Secretary or, in the absence (or inability or refusal to act) of the Secretary, an Assistant Secretary so appointed to act by the chairman of the meeting. In the absence (or inability or refusal to act) of the Secretary and all Assistant Secretaries, the chairman of the meeting may appoint any person to act as secretary of the meeting.

 

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Section 2.9. Consents in Lieu of Meeting. At any time when the certificate of incorporation of the Corporation permits action by one or more classes or series of stockholders of the Corporation to be taken by written consent, the provisions of this section shall apply. All consents properly delivered in accordance with the certificate of incorporation of the Corporation and the DGCL shall be deemed to be recorded when so delivered. No written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the earliest dated consent delivered to the Corporation as required by the DGCL, written consents signed by the holders of a sufficient number of shares to take such corporate action are so delivered to the Corporation in accordance with the applicable provisions of the DGCL. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for notice of such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the Corporation as provided in the applicable provisions of the DGCL. Any action taken pursuant to such written consent or consents of the stockholders shall have the same force and effect as if taken by the stockholders at a meeting thereof. In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board. If no record date has been fixed by the Board, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board is required by statute, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board and prior action by the Board is required by statute, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board adopts the resolution taking such prior action.

 

ARTICLE III

 

DIRECTORS

 

Section 3.1. Powers; Number. The business and affairs of the Corporation shall be managed by or under the direction of the Board, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these Bylaws required to be exercised or done by the stockholders. Directors need not be stockholders or residents of the State of Delaware. Subject to the Certificate of Incorporation, the number of directors shall be fixed exclusively by resolution of the Board.

 

Section 3.2. Advance Notice for Nomination of Directors.

 

(a) Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation, except as may be otherwise provided by the terms of one or more series of Preferred Stock with respect to the rights of holders of one or more series of Preferred Stock to elect directors. Nominations of persons for election to the Board at any annual meeting of stockholders, or at any special meeting of stockholders called for the purpose of electing directors as set forth in the Corporation’s notice of such special meeting, may be made (i) by or at the direction of the Board or (ii) by any stockholder of the Corporation (x) who is a stockholder of record entitled to vote in the election of directors on the date of the giving of the notice provided for in this Section 3.2 and on the record date for the determination of stockholders entitled to vote at such meeting and (y) who complies with the notice procedures set forth in this Section 3.2.

 

(b) In addition to any other applicable requirements, for a nomination to be made by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary. To be timely, a stockholder’s notice to the Secretary must be received by the Secretary at the principal executive offices of the Corporation (i) in the case of an annual meeting, not later than the close of business on the 90th day nor earlier than the close of business on the 120th day before the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so received not earlier than the close of business on the 120th day before the meeting and not later than the later of (x) the close of business on the 90th day before the meeting or (y) the close of business on the 10th day following the day on which public announcement of the date of the annual meeting was first made by the Corporation; and (ii) in the case of a special meeting of stockholders called for the purpose of electing directors, not later than the close of business on the 10th day following the day on which public announcement of the date of the special meeting is first made by the Corporation. In no event shall the public announcement of an adjournment or postponement of an annual meeting or special meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described in this Section 3.2.

 

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(c) Notwithstanding anything in paragraph (b) to the contrary, in the event that the number of directors to be elected to the Board at an annual meeting is greater than the number of directors whose terms expire on the date of the annual meeting and there is no public announcement by the Corporation naming all of the nominees for the additional directors to be elected or specifying the size of the increased Board before the close of business on the 90th day prior to the anniversary date of the immediately preceding annual meeting of stockholders, a stockholder’s notice required by this Section 3.2 shall also be considered timely, but only with respect to nominees for the additional directorships created by such increase that are to be filled by election at such annual meeting, if it shall be received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the date on which such public announcement was first made by the Corporation. 

 

(d) To be in proper written form, a stockholder’s notice to the Secretary must set forth (i) as to each person whom the stockholder proposes to nominate for election as a director (A) the name, age, business address and residence address of the person, (B) the principal occupation or employment of the person, (C) the class or series and number of shares of capital stock of the Corporation that are owned beneficially or of record by the person and (D) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder; and (ii) as to the stockholder giving the notice (A) the name and record address of such stockholder as they appear on the Corporation’s books and the name and address of the beneficial owner, if any, on whose behalf the nomination is made, (B) the class or series and number of shares of capital stock of the Corporation that are owned beneficially and of record by such stockholder and the beneficial owner, if any, on whose behalf the nomination is made, (C) a description of all arrangements or understandings relating to the nomination to be made by such stockholder among such stockholder, the beneficial owner, if any, on whose behalf the nomination is made, each proposed nominee and any other person or persons (including their names), (D) a representation that such stockholder (or a qualified representative of such stockholder) intends to appear in person or by proxy at the meeting to nominate the persons named in its notice and (E) any other information relating to such stockholder and the beneficial owner, if any, on whose behalf the nomination is made that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected.

 

(e) If the Board or the chairman of the meeting of stockholders determines that any nomination was not made in accordance with the provisions of this Section 3.2, or that the information provided in a stockholder’s notice does not satisfy the information requirements of this Section 3.2, then such nomination shall not be considered at the meeting in question. Notwithstanding the foregoing provisions of this Section 3.2, if the stockholder (or a qualified representative of the stockholder) does not appear at the meeting of stockholders of the Corporation to present the nomination, such nomination shall be disregarded, notwithstanding that proxies in respect of such nomination may have been received by the Corporation.

 

(f) In addition to the provisions of this Section 3.2, a stockholder shall also comply with all of the applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth herein. Nothing in this Section 3.2 shall be deemed to affect any rights of the holders of Preferred Stock to elect directors pursuant to the Certificate of Incorporation.

 

Section 3.3. Compensation. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, the Board shall have the authority to fix the compensation of directors, including for service on a committee of the Board, and may be paid either a fixed sum for attendance at each meeting of the Board or other compensation as director. The directors may be reimbursed their expenses, if any, of attendance at each meeting of the Board. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of committees of the Board may be allowed like compensation and reimbursement of expenses for service on the committee.

 

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ARTICLE IV

 

BOARD MEETINGS

 

Section 4.1. Annual Meetings. The Board may meet as soon as practicable after the adjournment of each annual stockholders meeting at the place of the annual stockholders meeting unless the Board shall fix another time and place and give notice thereof in the manner required herein for special meetings of the Board. No notice to the directors shall be necessary to legally convene this meeting, except as provided in this Section 4.1.

 

Section 4.2. Regular Meetings. Regularly scheduled, periodic meetings of the Board may be held without notice at such times, dates and places (within or without the State of Delaware) as shall from time to time be determined by the Board.

 

Section 4.3. Special Meetings. Special meetings of the Board (a) may be called by the Chairman of the Board or President and (b) shall be called by the Chairman of the Board, President or Secretary on the written request of at least a majority of directors then in office, or the sole director, as the case may be, and shall be held at such time, date and place (within or without the State of Delaware) as may be determined by the person calling the meeting or, if called upon the request of directors or the sole director, as specified in such written request. Notice of each special meeting of the Board shall be given, as provided in Section 9.3, to each director: (i) at least 24 hours before the meeting if such notice is oral notice given personally or by telephone or written notice given by hand delivery or by means of a form of electronic transmission and delivery; (ii) at least two days before the meeting if such notice is sent by a nationally recognized overnight delivery service; and (iii) at least five days before the meeting if such notice is sent through the United States mail. If the Secretary shall fail or refuse to give such notice, then the notice may be given by the officer who called the meeting or the directors who requested the meeting. Any and all business that may be transacted at a regular meeting of the Board may be transacted at a special meeting. Except as may be otherwise expressly provided by applicable law, the Certificate of Incorporation, or these Bylaws, neither the business to be transacted at, nor the purpose of, any special meeting need be specified in the notice or waiver of notice of such meeting. A special meeting may be held at any time without notice if all the directors are present or if those not present waive notice of the meeting in accordance with Section 9.4.

 

Section 4.4. Quorum; Required Vote. A majority of the Board shall constitute a quorum for the transaction of business at any meeting of the Board, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board, except as may be otherwise specifically provided by applicable law, the Certificate of Incorporation or these Bylaws. If a quorum shall not be present at any meeting, a majority of the directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.

 

Section 4.5. Consent In Lieu of Meeting. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board or any committee thereof may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions (or paper reproductions thereof) are filed with the minutes of proceedings of the Board or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

 

Section 4.6. Organization. The chairman of each meeting of the Board shall be the Chairman of the Board or, in the absence (or inability or refusal to act) of the Chairman of the Board, the Chief Executive Officer (if he or she shall be a director) or, in the absence (or inability or refusal to act) of the Chief Executive Officer or if the Chief Executive Officer is not a director, the President (if he or she shall be a director) or in the absence (or inability or refusal to act) of the President or if the President is not a director, a chairman elected from the directors present. The Secretary shall act as secretary of all meetings of the Board. In the absence (or inability or refusal to act) of the Secretary, an Assistant Secretary shall perform the duties of the Secretary at such meeting. In the absence (or inability or refusal to act) of the Secretary and all Assistant Secretaries, the chairman of the meeting may appoint any person to act as secretary of the meeting.

 

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ARTICLE V

 

COMMITTEES OF DIRECTORS

 

Section 5.1. Establishment. The Board may by resolution of the Board designate one or more committees, each committee to consist of one or more of the directors of the Corporation. Each committee shall keep regular minutes of its meetings and report the same to the Board when required by the resolution designating such committee. The Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve any such committee. 

 

Section 5.2. Available Powers. Any committee established pursuant to Section 5.1 hereof, to the extent permitted by applicable law and by resolution of the Board, shall have and may exercise all of the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers that may require it.

 

Section 5.3. Alternate Members. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in place of any such absent or disqualified member.

 

Section 5.4. Procedures. Unless the Board otherwise provides, the time, date, place, if any, and notice of meetings of a committee shall be determined by such committee. At meetings of a committee, a majority of the number of members of the committee (but not including any alternate member, unless such alternate member has replaced any absent or disqualified member at the time of, or in connection with, such meeting) shall constitute a quorum for the transaction of business. The act of a majority of the members present at any meeting at which a quorum is present shall be the act of the committee, except as otherwise specifically provided by applicable law, the Certificate of Incorporation, these Bylaws or the Board. If a quorum is not present at a meeting of a committee, the members present may adjourn the meeting from time to time, without notice other than an announcement at the meeting, until a quorum is present. Unless the Board otherwise provides and except as provided in these Bylaws, each committee designated by the Board may make, alter, amend and repeal rules for the conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board is authorized to conduct its business pursuant to Article III and Article IV of these Bylaws.

 

ARTICLE VI

 

OFFICERS

 

Section 6.1. Officers. The officers of the Corporation elected by the Board shall be a Chief Executive Officer, a Chief Financial Officer, a Secretary and such other officers (including without limitation, a Chairman of the Board, Presidents, Vice Presidents, Partners, Managing Directors, Senior Managing Directors, Assistant Secretaries and a Treasurer) as the Board from time to time may determine. Officers elected by the Board shall each have such powers and duties as generally pertain to their respective offices, subject to the specific provisions of this Article VI. Such officers shall also have such powers and duties as from time to time may be conferred by the Board. The Chief Executive Officer or President may also appoint such other officers (including without limitation one or more Vice Presidents and Controllers) as may be necessary or desirable for the conduct of the business of the Corporation. Such other officers shall have such powers and duties and shall hold their offices for such terms as may be provided in these Bylaws or as may be prescribed by the Board or, if such officer has been appointed by the Chief Executive Officer or President, as may be prescribed by the appointing officer.

 

(a) Chairman of the Board. The Chairman of the Board shall preside when present at all meetings of the stockholders and the Board. The Chairman of the Board shall have general supervision and control of the acquisition activities of the Corporation subject to the ultimate authority of the Board, and shall be responsible for the execution of the policies of the Board with respect to such matters. In the absence (or inability or refusal to act) of the Chairman of the Board, the Chief Executive Officer (if he or she shall be a director) shall preside when present at all meetings of the stockholders and the Board. The powers and duties of the Chairman of the Board shall not include supervision or control of the preparation of the financial statements of the Corporation (other than through participation as a member of the Board). The position of Chairman of the Board and Chief Executive Officer may be held by the same person.

 

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(b) Chief Executive Officer. The Chief Executive Officer shall be the chief executive officer of the Corporation, shall have general supervision of the affairs of the Corporation and general control of all of its business subject to the ultimate authority of the Board, and shall be responsible for the execution of the policies of the Board with respect to such matters, except to the extent any such powers and duties have been prescribed to the Chairman of the Board pursuant to Section 6.1(a) above. In the absence (or inability or refusal to act) of the Chairman of the Board, the Chief Executive Officer (if he or she shall be a director) shall preside when present at all meetings of the stockholders and the Board. The position of Chief Executive Officer and President may be held by the same person. 

 

(c) President. The President shall make recommendations to the Chief Executive Officer on all operational matters that would normally be reserved for the final executive responsibility of the Chief Executive Officer. In the absence (or inability or refusal to act) of the Chairman of the Board and Chief Executive Officer, the President (if he or she shall be a director) shall preside when present at all meetings of the stockholders and the Board. The President shall also perform such duties and have such powers as shall be designated by the Board. The position of President and Chief Executive Officer may be held by the same person.

 

(d) Vice Presidents. In the absence (or inability or refusal to act) of the President, the Vice President (or in the event there be more than one Vice President, the Vice Presidents in the order designated by the Board) shall perform the duties and have the powers of the President. Any one or more of the Vice Presidents may be given an additional designation of rank or function.

 

(e) Secretary.

 

(i) The Secretary shall attend all meetings of the stockholders, the Board and (as required) committees of the Board and shall record the proceedings of such meetings in books to be kept for that purpose. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board and shall perform such other duties as may be prescribed by the Board, the Chairman of the Board, Chief Executive Officer or President. The Secretary shall have custody of the corporate seal of the Corporation and the Secretary, or any Assistant Secretary, shall have authority to affix the same to any instrument requiring it, and when so affixed, it may be attested by his or her signature or by the signature of such Assistant Secretary. The Board may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing thereof by his or her signature.

 

(ii) The Secretary shall keep, or cause to be kept, at the principal executive office of the Corporation or at the office of the Corporation’s transfer agent or registrar, if one has been appointed, a stock ledger, or duplicate stock ledger, showing the names of the stockholders and their addresses, the number and classes of shares held by each and, with respect to certificated shares, the number and date of certificates issued for the same and the number and date of certificates cancelled.

 

(f) Assistant Secretaries. The Assistant Secretary or, if there be more than one, the Assistant Secretaries in the order determined by the Board shall, in the absence (or inability or refusal to act) of the Secretary, perform the duties and have the powers of the Secretary.

 

(g) Chief Financial Officer. The Chief Financial Officer shall perform all duties commonly incident to that office (including, without limitation, the care and custody of the funds and securities of the Corporation, which from time to time may come into the Chief Financial Officer’s hands and the deposit of the funds of the Corporation in such banks or trust companies as the Board, the Chief Executive Officer or the President may authorize).

 

(h) Treasurer. The Treasurer shall, in the absence (or inability or refusal to act) of the Chief Financial Officer, perform the duties and exercise the powers of the Chief Financial Officer.

 

Section 6.2. Term of Office; Removal; Vacancies. The elected officers of the Corporation shall be appointed by the Board and shall hold office until their successors are duly elected and qualified by the Board or until their earlier death, resignation, retirement, disqualification, or removal from office. Any officer may be removed, with or without cause, at any time by the Board. Any officer appointed by the Chief Executive Officer or President may also be removed, with or without cause, by the Chief Executive Officer or President, as the case may be, unless the Board otherwise provides. Any vacancy occurring in any elected office of the Corporation may be filled by the Board. Any vacancy occurring in any office appointed by the Chief Executive Officer or President may be filled by the Chief Executive Officer, or President, as the case may be, unless the Board then determines that such office shall thereupon be elected by the Board, in which case the Board shall elect such officer. 

 

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Section 6.3. Other Officers. The Board may delegate the power to appoint such other officers and agents, and may also remove such officers and agents or delegate the power to remove same, as it shall from time to time deem necessary or desirable.

 

Section 6.4. Multiple Officeholders; Stockholder and Director Officers. Any number of offices may be held by the same person unless the Certificate of Incorporation or these Bylaws otherwise provide. Officers need not be stockholders or residents of the State of Delaware.

 

ARTICLE VII

 

SHARES

 

Section 7.1. Certificated and Uncertificated Shares. The shares of the Corporation may be certificated or uncertificated, subject to the sole discretion of the Board and the requirements of the DGCL.

 

Section 7.2. Multiple Classes of Stock. If the Corporation shall be authorized to issue more than one class of stock or more than one series of any class, the Corporation shall (a) cause the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights to be set forth in full or summarized on the face or back of any certificate that the Corporation issues to represent shares of such class or series of stock or (b) in the case of uncertificated shares, within a reasonable time after the issuance or transfer of such shares, send to the registered owner thereof a written notice containing the information required to be set forth on certificates as specified in clause (a) above; provided, however, that, except as otherwise provided by applicable law, in lieu of the foregoing requirements, there may be set forth on the face or back of such certificate or, in the case of uncertificated shares, on such written notice a statement that the Corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences or rights.

 

Section 7.3. Signatures. Each certificate representing capital stock of the Corporation shall be signed by or in the name of the Corporation by (a) the Chairman of the Board, Chief Executive Officer, the President or a Vice President and (b) the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the Corporation. Any or all the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar on the date of issue.

 

Section 7.4. Consideration and Payment for Shares.

 

(a) Subject to applicable law and the Certificate of Incorporation, shares of stock may be issued for such consideration, having in the case of shares with par value a value not less than the par value thereof, and to such persons, as determined from time to time by the Board. The consideration may consist of any tangible or intangible property or any benefit to the Corporation including cash, promissory notes, services performed, contracts for services to be performed or other securities, or any combination thereof.

 

(b) Subject to applicable law and the Certificate of Incorporation, shares may not be issued until the full amount of the consideration has been paid, unless upon the face or back of each certificate issued to represent any partly paid shares of capital stock or upon the books and records of the Corporation in the case of partly paid uncertificated shares, there shall have been set forth the total amount of the consideration to be paid therefor and the amount paid thereon up to and including the time said certificate representing certificated shares or said uncertificated shares are issued.

 

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Section 7.5. Lost, Destroyed or Wrongfully Taken Certificates.

 

(a) If an owner of a certificate representing shares claims that such certificate has been lost, destroyed or wrongfully taken, the Corporation shall issue a new certificate representing such shares or such shares in uncertificated form if the owner: (i) requests such a new certificate before the Corporation has notice that the certificate representing such shares has been acquired by a protected purchaser; (ii) if requested by the Corporation, delivers to the Corporation a bond sufficient to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, wrongful taking or destruction of such certificate or the issuance of such new certificate or uncertificated shares; and (iii) satisfies other reasonable requirements imposed by the Corporation. 

 

(b) If a certificate representing shares has been lost, apparently destroyed or wrongfully taken, and the owner fails to notify the Corporation of that fact within a reasonable time after the owner has notice of such loss, apparent destruction or wrongful taking and the Corporation registers a transfer of such shares before receiving notification, the owner shall be precluded from asserting against the Corporation any claim for registering such transfer or a claim to a new certificate representing such shares or such shares in uncertificated form.

 

Section 7.6. Transfer of Stock.

 

(a) Transfers of record of shares of stock of the corporation shall be made only upon its books by the holders thereof, in person or by attorney duly authorized, and, in the case of stock represented by certificate, upon the surrender of a properly endorsed certificate or certificates for a like number of shares.

 

(b) The corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes of stock of the corporation to restrict the transfer of shares of stock of the corporation of any one or more classes owned by such stockholders in any manner not prohibited by the DGCL.

 

Section 7.7. Registered Stockholders. The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

 

Section 7.8. Regulations. The Board shall have power and authority to make such additional rules and regulations, subject to any applicable requirement of law, as the Board may deem necessary and appropriate with respect to the issue, transfer or registration of transfer of shares of stock or certificates representing shares. The Board may appoint one or more transfer agents or registrars and may require for the validity thereof that certificates representing shares bear the signature of any transfer agent or registrar so appointed.

 

ARTICLE VIII

 

INDEMNIFICATION

 

Section 8.1. Right to Indemnification. To the fullest extent permitted by applicable law, as the same exists or may hereafter be amended, the Corporation shall indemnify and hold harmless each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”), by reason of the fact that he or she is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, other enterprise or nonprofit entity, including service with respect to an employee benefit plan (hereinafter an “Indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent, or in any other capacity while serving as a director, officer, employee or agent, against all liability and loss suffered and expenses (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred by such Indemnitee in connection with such proceeding; provided, however, that, except as provided in Section 8.3 with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify an Indemnitee in connection with a proceeding (or part thereof) initiated by such Indemnitee only if such proceeding (or part thereof) was authorized by the Board.

 

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Section 8.2. Right to Advancement of Expenses. In addition to the right to indemnification conferred in Section 8.1, an Indemnitee shall also have the right to be paid by the Corporation to the fullest extent not prohibited by applicable law the expenses (including, without limitation, attorneys’ fees) incurred in defending or otherwise participating in any such proceeding in advance of its final disposition (hereinafter an “advancement of expenses”); provided, however, that, if the DGCL requires, an advancement of expenses incurred by an Indemnitee in his or her capacity as a director or officer of the Corporation (and not in any other capacity in which service was or is rendered by such Indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon the Corporation’s receipt of an undertaking (hereinafter an “undertaking”), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined that such Indemnitee is not entitled to be indemnified under this Article VIII or otherwise.

 

Section 8.3. Right of Indemnitee to Bring Suit. If a claim under Section 8.1 or Section 8.2 is not paid in full by the Corporation within 60 days after a written claim therefor has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be 20 days, the Indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Indemnitee shall also be entitled to be paid the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by an Indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (b) in any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that, the Indemnitee has not met any applicable standard for indemnification set forth in the DGCL. Neither the failure of the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including a determination by its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) that the Indemnitee has not met such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, shall be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article VIII or otherwise shall be on the Corporation. 

 

Section 8.4. Non-Exclusivity of Rights. The rights provided to any Indemnitee pursuant to this Article VIII shall not be exclusive of any other right, which such Indemnitee may have or hereafter acquire under applicable law, the Certificate of Incorporation, these Bylaws, an agreement, a vote of stockholders or disinterested directors, or otherwise.

 

Section 8.5. Insurance. The Corporation may maintain insurance, at its expense, to protect itself and/or any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.

 

Section 8.6. Indemnification of Other Persons. This Article VIII shall not limit the right of the Corporation to the extent and in the manner authorized or permitted by law to indemnify and to advance expenses to persons other than Indemnitees. Without limiting the foregoing, the Corporation may, to the extent authorized from time to time by the Board, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation and to any other person who is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, to the fullest extent of the provisions of this Article VIII with respect to the indemnification and advancement of expenses of Indemnitees under this Article VIII.

 

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Section 8.7. Amendments. Any repeal or amendment of this Article VIII by the Board or the stockholders of the Corporation or by changes in applicable law, or the adoption of any other provision of these Bylaws inconsistent with this Article VIII, will, to the extent permitted by applicable law, be prospective only (except to the extent such amendment or change in applicable law permits the Corporation to provide broader indemnification rights to Indemnitees on a retroactive basis than permitted prior thereto), and will not in any way diminish or adversely affect any right or protection existing hereunder in respect of any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision; provided however, that amendments or repeals of this Article VIII shall require the affirmative vote of the stockholders holding at least 66 ⅔% of the voting power of all outstanding shares of capital stock of the Corporation.

 

Section 8.8. Certain Definitions. For purposes of this Article VIII, (a) references to “other enterprise” shall include any employee benefit plan; (b) references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; (c) references to “serving at the request of the Corporation” shall include any service that imposes duties on, or involves services by, a person with respect to any employee benefit plan, its participants, or beneficiaries; and (d) a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interest of the Corporation” for purposes of Section 145 of the DGCL.

 

Section 8.9. Contract Rights. The rights provided to Indemnitees pursuant to this Article VIII shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be a director, officer, agent or employee and shall inure to the benefit of the Indemnitee’s heirs, executors and administrators.

 

Section 8.10. Severability. If any provision or provisions of this Article VIII shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Article VIII shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Article VIII (including, without limitation, each such portion of this Article VIII containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

 

ARTICLE IX

 

MISCELLANEOUS

 

Section 9.1. Place of Meetings. If the place of any meeting of stockholders, the Board or committee of the Board for which notice is required under these Bylaws is not designated in the notice of such meeting, such meeting shall be held at the principal business office of the Corporation; provided, however, if the Board has, in its sole discretion, determined that a meeting shall not be held at any place, but instead shall be held by means of remote communication pursuant to Section 9.5 hereof, then such meeting shall not be held at any place.

 

Section 9.2. Fixing Record Dates.

 

(a) In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board may fix a record date, which shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall not be more than 60 nor less than 10 days before the date of such meeting. If the Board so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of and to vote at a meeting of stockholders shall be at the close of business on the business day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the business day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance with the foregoing provisions of this Section 9.2(a) at the adjourned meeting.

 

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(b) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.

 

Section 9.3. Means of Giving Notice.

 

(a) Notice to Directors. Whenever under applicable law, the Certificate of Incorporation or these Bylaws notice is required to be given to any director, such notice shall be given either (i) in writing and sent by mail, or by a nationally recognized delivery service, (ii) by means of facsimile telecommunication or other form of electronic transmission, or (iii) by oral notice given personally or by telephone. A notice to a director will be deemed given as follows: (i) if given by hand delivery, orally, or by telephone, when actually received by the director, (ii) if sent through the United States mail, when deposited in the United States mail, with postage and fees thereon prepaid, addressed to the director at the director’s address appearing on the records of the Corporation, (iii) if sent for next day delivery by a nationally recognized overnight delivery service, when deposited with such service, with fees thereon prepaid, addressed to the director at the director’s address appearing on the records of the Corporation, (iv) if sent by facsimile telecommunication, when sent to the facsimile transmission number for such director appearing on the records of the Corporation, (v) if sent by electronic mail, when sent to the electronic mail address for such director appearing on the records of the Corporation, or (vi) if sent by any other form of electronic transmission, when sent to the address, location or number (as applicable) for such director appearing on the records of the Corporation. 

 

(b) Notice to Stockholders. Whenever under applicable law, the Certificate of Incorporation or these Bylaws notice is required to be given to any stockholder, such notice may be given (i) in writing and sent either by hand delivery, through the United States mail, or by a nationally recognized overnight delivery service for next day delivery, or (ii) by means of a form of electronic transmission consented to by the stockholder, to the extent permitted by, and subject to the conditions set forth in Section 232 of the DGCL. A notice to a stockholder shall be deemed given as follows: (i) if given by hand delivery, when actually received by the stockholder, (ii) if sent through the United States mail, when deposited in the United States mail, with postage and fees thereon prepaid, addressed to the stockholder at the stockholder’s address appearing on the stock ledger of the Corporation, (iii) if sent for next day delivery by a nationally recognized overnight delivery service, when deposited with such service, with fees thereon prepaid, addressed to the stockholder at the stockholder’s address appearing on the stock ledger of the Corporation, and (iv) if given by a form of electronic transmission consented to by the stockholder to whom the notice is given and otherwise meeting the requirements set forth above, (A) if by facsimile transmission, when directed to a number at which the stockholder has consented to receive notice, (B) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice, (C) if by a posting on an electronic network together with separate notice to the stockholder of such specified posting, upon the later of (1) such posting and (2) the giving of such separate notice, and (D) if by any other form of electronic transmission, when directed to the stockholder. A stockholder may revoke such stockholder’s consent to receiving notice by means of electronic communication by giving written notice of such revocation to the Corporation. Any such consent shall be deemed revoked if (1) the Corporation is unable to deliver by electronic transmission two consecutive notices given by the Corporation in accordance with such consent and (2) such inability becomes known to the Secretary or an Assistant Secretary or to the Corporation’s transfer agent, or other person responsible for the giving of notice; provided, however, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action.

 

(c) Electronic Transmission. “Electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process, including but not limited to transmission by telex, facsimile telecommunication, electronic mail, telegram and cablegram.

 

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(d) Notice to Stockholders Sharing Same Address. Without limiting the manner by which notice otherwise may be given effectively by the Corporation to stockholders, any notice to stockholders given by the Corporation under any provision of the DGCL, the Certificate of Incorporation or these Bylaws shall be effective if given by a single written notice to stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. A stockholder may revoke such stockholder’s consent by delivering written notice of such revocation to the Corporation. Any stockholder who fails to object in writing to the Corporation within 60 days of having been given written notice by the Corporation of its intention to send such a single written notice shall be deemed to have consented to receiving such single written notice.

 

(e) Exceptions to Notice Requirements. Whenever notice is required to be given, under the DGCL, the Certificate of Incorporation or these Bylaws, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting that shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. In the event that the action taken by the Corporation is such as to require the filing of a certificate with the Secretary of State of Delaware, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful. 

 

Whenever notice is required to be given by the Corporation, under any provision of the DGCL, the Certificate of Incorporation or these Bylaws, to any stockholder to whom (1) notice of two consecutive annual meetings of stockholders and all notices of stockholder meetings or of the taking of action by written consent of stockholders without a meeting to such stockholder during the period between such two consecutive annual meetings, or (2) all, and at least two payments (if sent by first-class mail) of dividends or interest on securities during a 12-month period, have been mailed addressed to such stockholder at such stockholder’s address as shown on the records of the Corporation and have been returned undeliverable, the giving of such notice to such stockholder shall not be required. Any action or meeting that shall be taken or held without notice to such stockholder shall have the same force and effect as if such notice had been duly given. If any such stockholder shall deliver to the Corporation a written notice setting forth such stockholder’s then current address, the requirement that notice be given to such stockholder shall be reinstated. In the event that the action taken by the Corporation is such as to require the filing of a certificate with the Secretary of State of Delaware, the certificate need not state that notice was not given to persons to whom notice was not required to be given pursuant to Section 230(b) of the DGCL. The exception in subsection (1) of the first sentence of this paragraph to the requirement that notice be given shall not be applicable to any notice returned as undeliverable if the notice was given by electronic transmission.

 

Section 9.4. Waiver of Notice. Whenever any notice is required to be given under applicable law, the Certificate of Incorporation, or these Bylaws, a written waiver of such notice, signed by the person or persons entitled to said notice, or a waiver by electronic transmission by the person entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent to such required notice. All such waivers shall be kept with the books of the Corporation. Attendance at a meeting shall constitute a waiver of notice of such meeting, except where a person attends for the express purpose of objecting to the transaction of any business on the ground that the meeting was not lawfully called or convened.

 

Section 9.5. Meeting Attendance via Remote Communication Equipment.

 

(a) Stockholder Meetings. If authorized by the Board in its sole discretion, and subject to such guidelines and procedures as the Board may adopt, stockholders entitled to vote at such meeting and proxy holders not physically present at a meeting of stockholders may, by means of remote communication:

 

(i) participate in a meeting of stockholders; and

 

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(ii) be deemed present in person and vote at a meeting of stockholders, whether such meeting is to be held at a designated place or solely by means of remote communication, provided that (A) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxy holder, (B) the Corporation shall implement reasonable measures to provide such stockholders and proxy holders a reasonable opportunity to participate in the meeting and, if entitled to vote, to vote on matters submitted to the applicable stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (C) if any stockholder or proxy holder votes or takes other action at the meeting by means of remote communication, a record of such votes or other action shall be maintained by the Corporation.

 

(b) Board Meetings. Unless otherwise restricted by applicable law, the Certificate of Incorporation or these Bylaws, members of the Board or any committee thereof may participate in a meeting of the Board or any committee thereof by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other. Such participation in a meeting shall constitute presence in person at the meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting was not lawfully called or convened.

 

Section 9.6. Dividends. The Board may from time to time declare, and the Corporation may pay, dividends (payable in cash, property or shares of the Corporation’s capital stock) on the Corporation’s outstanding shares of capital stock, subject to applicable law and the Certificate of Incorporation.

 

Section 9.7. Reserves. The Board may set apart out of the funds of the Corporation available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve.  

 

Section 9.8. Contracts and Negotiable Instruments. Except as otherwise provided by applicable law, the Certificate of Incorporation or these Bylaws, any contract, bond, deed, lease, mortgage or other instrument may be executed and delivered in the name and on behalf of the Corporation by such officer or officers or other employee or employees of the Corporation as the Board may from time to time authorize. Such authority may be general or confined to specific instances as the Board may determine. The Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial Officer, the Treasurer or any Vice President may execute and deliver any contract, bond, deed, lease, mortgage or other instrument in the name and on behalf of the Corporation. Subject to any restrictions imposed by the Board, the Chairman of the Board Chief Executive Officer, President, the Chief Financial Officer, the Treasurer or any Vice President may delegate powers to execute and deliver any contract, bond, deed, lease, mortgage or other instrument in the name and on behalf of the Corporation to other officers or employees of the Corporation under such person’s supervision and authority, it being understood, however, that any such delegation of power shall not relieve such officer of responsibility with respect to the exercise of such delegated power.

 

Section 9.9. Fiscal Year. The fiscal year of the Corporation shall be fixed by the Board.

 

Section 9.10. Seal. The Board may adopt a corporate seal, which shall be in such form as the Board determines. The seal may be used by causing it or a facsimile thereof to be impressed, affixed or otherwise reproduced.

 

Section 9.11. Books and Records. The books and records of the Corporation may be kept within or outside the State of Delaware at such place or places as may from time to time be designated by the Board.

 

Section 9.12. Resignation. Any director, committee member or officer may resign by giving notice thereof in writing or by electronic transmission to the Chairman of the Board, the Chief Executive Officer, the President or the Secretary. The resignation shall take effect at the time it is delivered unless the resignation specifies a later effective date or an effective date determined upon the happening of an event or events. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

 

Section 9.13. Surety Bonds. Such officers, employees and agents of the Corporation (if any) as the Chairman of the Board, Chief Executive Officer, President or the Board may direct, from time to time, shall be bonded for the faithful performance of their duties and for the restoration to the Corporation, in case of their death, resignation, retirement, disqualification or removal from office, of all books, papers, vouchers, money and other property of whatever kind in their possession or under their control belonging to the Corporation, in such amounts and by such surety companies as the Chairman of the Board, Chief Executive Officer, President or the Board may determine. The premiums on such bonds shall be paid by the Corporation and the bonds so furnished shall be in the custody of the Secretary.

 

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Section 9.14. Securities of Other Corporations. Powers of attorney, proxies, waivers of notice of meeting, consents in writing and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the Chairman of the Board, Chief Executive Officer, President, any Vice President or any officers authorized by the Board. Any such officer, may, in the name of and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities, or to consent in writing, in the name of the Corporation as such holder, to any action by such corporation, and at any such meeting or with respect to any such consent shall possess and may exercise any and all rights and power incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed. The Board may from time to time confer like powers upon any other person or persons.

 

Section 9.15. Amendments. The Board shall have the power to adopt, amend, alter or repeal the Bylaws. The affirmative vote of a majority of the Board shall be required to adopt, amend, alter or repeal the Bylaws. The Bylaws also may be adopted, amended, altered or repealed by the stockholders; provided, however, that in addition to any vote of the holders of any class or series of capital stock of the Corporation required by applicable law or the Certificate of Incorporation, the affirmative vote of the holders of at least 66 ⅔% of the voting power (except as otherwise provided in Section 8.7) of all outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required for the stockholders to adopt, amend, alter or repeal the Bylaws.

 

 

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Exhibit 10.1

 

TRANSITION SERVICES AGREEMENT

 

This TRANSITION SERVICES AGREEMENT (the “Agreement”) is made as of January 4, 2021 (the “Effective Date”) by and between Customers Bank, a bank chartered under the laws of the Commonwealth of Pennsylvania (“Seller”) and BM Technologies, Inc., a Delaware corporation (“Purchaser”). Seller and Purchaser are referred to herein collectively as the “Parties” and individually as a “Party.”

 

INTRODUCTION

 

WHEREAS, Seller and Purchaser, together with BankMobile Technologies, Inc. (“BMT”), MFAC Merger Sub, Inc., a Pennsylvania corporation and Customers Bancorp, Inc., a Pennsylvania corporation, have entered into an Agreement and Plan of Merger, dated as of August 6, 2020 (as amended, including by the First Amendment to Agreement and Plan of Merger, dated November 2, 2020 and the Second Amendment to Agreement and Plan of Merger, dated December 8, 2020, the “Merger Agreement”) (capitalized terms not defined in this Agreement shall have the meanings indicated in the Merger Agreement);

 

WHEREAS, under the Merger Agreement, Purchaser has agreed to purchase from Seller certain assets related to Seller’s BMT business (the “Business”), and the Merger Agreement contemplates that the Parties shall execute and deliver this Agreement at the Closing;

 

WHEREAS, it is planned that with the Purchaser’s purchase of the Business, the Purchaser will acquire the services of approximately three hundred (300) new employees. This will include the current senior management team of the Business as well as leaders and staff who, when combined with supplementation of specific skills via third party contracts, will possess the skills, tools and experience to meet certain operational, administrative, risk management, compliance, accounting, human resources, information services, security, and other needs of the merged companies;

 

WHEREAS, Purchaser personnel shall in all situations after the acquisition retain control of all management decisions, and any support received from the Seller shall be for historical information, transition, or advisory purposes only, and

 

WHEREAS, Purchaser and Seller recognize that in specific areas it may be highly desired that, after the Closing, the Purchaser have access to employees, resources, historical records or institutional memory of specific individuals of the Seller, and that Purchaser shall procure from Seller, certain advisory services and information, as set forth herein.

 

NOW, THEREFORE, in consideration of the promises and covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:

 

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ARTICLE I
TRANSITION SERVICES

 

Section 1.1 Transition Services.

 

(a) Scope and Duration of Seller Transition Services. Seller, itself and/or by and through its Affiliates, and its and their respective employees, agents or contractors, shall provide or cause to be provided to Purchaser, solely for the benefit of Purchaser, those services set forth on Annex A hereto and in a manner consistent with the Introduction, as it may be amended from time to time by mutual written agreement of the Parties (collectively, the “Seller Transition Services”) until the earlier of (i) expiration of the service period applicable to such Transition Services as set forth with respect to each applicable Seller Transition Service on Annex A hereto, or (ii) expiration of the Term (as defined below). Seller shall provide the advisory services or institutional memory based upon the need identified by the Purchaser to the Seller. Seller shall not be required to perform Seller Transition Services hereunder in any manner that violates any applicable law or regulation, or the principles set forth in the Introduction to this Agreement. It is acknowledged by Seller that the objective of this Agreement is to obligate Seller to provide, throughout the Term, any and all agreed upon advisory services and advice that is requested by Purchaser with respect to the assets purchased and employees hired pursuant to the Merger Agreement.

 

(b) Modified Transition Services. Any modifications to the Transition Services shall be subject to mutual agreement pursuant to ARTICLE IX hereof.

 

(c) Subcontractors. Upon prior consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed, Seller may subcontract with a qualified unaffiliated third party (a “Subcontractor”) to provide any Transition Services; provided that no notice shall be required with respect to the continued use of subcontractors in the manner utilized by Seller in connection with the Business immediately prior to the Closing, or with respect to changes in subcontractors which are consistent with Seller’s operation of the Business immediately prior to the Closing. Notwithstanding any subcontracting of Seller’s obligations under this Agreement, Seller shall, for the term of this Agreement, remain primarily liable for the delivery and performance of the Transition Services.

 

(d) Scope and Duration of Purchaser Transition Services. Purchaser, itself and/or by and through its respective employees, shall provide or cause to be provided to Seller, solely for the benefit of Seller, those services set forth on Annex B hereto, as it may be amended from time to time by mutual written agreement of the Parties (collectively, the “Purchaser Transition Services”) until the expiration of the service period applicable to such Transition Services as set forth with respect to the applicable Seller Transition Service on Annex B hereto.

 

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Section 1.2 Service Coordinators and Issue Resolution.

 

(a) Seller and Purchaser each hereby appoint as service coordinators their respective employees identified on Schedule 1.2 hereto (each, a “Service Coordinator”) to be the primary point of contact between Seller and Purchaser with respect to the Transition Services, including, and subject to the terms of this Schedule 1.2, with respect to disputes between the Parties arising out of or relating to this Agreement or the provision of Transition Services hereunder. Each Party shall have the right, upon reasonable advance written notice to the other Party, to replace its Service Coordinator with an employee or officer of such Party with comparable knowledge, expertise, and decision-making authority.

 

(b) In the event the Service Coordinators fail to resolve any dispute arising between the Parties in connection with the Transition Services within a reasonable time of receiving notice of such dispute from a Party, and in any event within ten (10) Business Days of such notification, then Purchaser shall designate an officer or officers holding the office of Senior Vice President (or equivalent office) or above (such officers, the “Senior Officers”) and such Senior Officers shall attempt in good faith to conclusively resolve any such dispute (i) with the members of an operating committee designated by Seller, and (ii) in the event the Senior Officers and operating committee fail to resolve the dispute, an executive committee shall be designated by Seller and Purchaser. If the Senior Officers and the operating and executive committees designated by Seller and Purchaser cannot resolve such dispute within a reasonable period of time, and in any event within twenty (20) Business Days of the referral of such dispute to them, either Party may submit the dispute to litigation as provided for in Section 10.8.

 

(c) Any dispute arising out of or relating to this Agreement shall be submitted for resolution pursuant to this Section 1.2 before any Party may commence any legal proceeding in connection therewith. A Party’s failure to comply with the preceding sentence shall constitute cause for the dismissal without prejudice of any such legal proceeding. This Section 1.2(c) is without prejudice to either Party’s right to seek interim relief against the other Party (such as an injunction) to protect its rights and interests, or to enforce the obligations of the other Party and the parties need not negotiate disputes with respect to equitable remedies prior to seeking relief from a court of competent jurisdiction.

 

Section 1.3 Migration Plan.

 

(a) On or prior to the date hereof, the Parties shall have negotiated and materially finalized a plan to transition from the performance of the Seller Transition Services by Seller and its Affiliates to the performance of such services by Purchaser, including moving the information technology systems and data used in the Business from Seller’s infrastructure to Purchaser’s or its designee’s infrastructure (“Migration”) (such plan, the “Migration Plan”). The Migration Plan must include full conversion support of the general ledger and data center network systems to FIS, if not completed at the time of closing. The Migration Plan shall include a governance and arbitration process, in which both Parties shall agree to participate, which shall be subject to the change request process set forth in ARTICLE IX.

 

(b) Purchaser shall be responsible for the Migration, including the construction and deployment of any systems or physical space required for the Migration. Seller shall use commercially reasonable efforts to assist Purchaser in completing the Migration. Purchaser shall be responsible for all fees and expenses incurred by Purchaser and reasonable out-of-pocket third-party costs of Seller incurred in the course of providing any assistance with the Migration requested by Purchaser.

 

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(c) The Parties acknowledge that the Migration Plan is a document that may change, and any such material changes will be subject to the change control process set forth in ARTICLE IX. Each Party shall use its commercially reasonable efforts to perform its obligations under the Migration Plan according to the schedule set forth in the Migration Plan, and each Party shall use sufficient and qualified resources and personnel to implement the Migration Plan, taking into account the need to reasonably manage the cost of such transition and minimize the disruption to the ongoing business activities of the Parties.

 

Section 1.4 Additional Transition Services. If requested by Purchaser, Seller shall provide services in addition to the Transition Services (“Additional Transition Services”), as may be agreed pursuant to the Change Control process set forth in ARTICLE IX. The scope of any such Additional Transition Services, as well as the prices and other terms applicable to such additional services, shall be as mutually agreed by Purchaser and Seller and shall be consistent with the principles set forth in the Introduction to this Agreement, and as further contemplated by ARTICLE IX.

 

Section 1.5 Standard of Performance. Seller shall use commercially reasonable efforts to perform or procure the provision of the Transition Services for Purchaser to standards of performance comparable in all material respects to which such Transition Services were performed by Seller or its Affiliates in connection with the Business immediately prior to Closing; provided that Seller shall not be responsible for the performance of any product programs or features developed and/or implemented by Purchaser after the Closing Date.

 

Section 1.6 Access. Each Party shall use good faith efforts to provide the other Party with access to information and computer systems, facilities, networks (including voice or data networks) or software to the extent reasonably necessary and in accordance with any applicable laws and regulations to enable the provision of Transition Services contemplated by this Agreement, subject to Section 7 hereof. The Party requesting access shall give the other Party reasonable prior written notice and justification of the need for such access.

 

Section 1.7 Independent Contractor. For all purposes hereof, each Party shall at all times act as an independent contractor and shall have no authority to represent the other Party in any way or otherwise be deemed an agent, lawyer, employee, representative, joint ventures or fiduciary of such other Party nor shall this Agreement or the transactions contemplated hereby be deemed to create any joint venture between the Parties. Each Party shall not declare or represent to any third party that such Party shall have any power or authority to negotiate or conclude any agreement, or to make any representation or to give any undertaking on behalf of the other Party in any way whatsoever.

 

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ARTICLE II

SERVICE FEES AND EXPENSES

 

Section 2.1 Service Fees.

 

(a) Subject to adjustment in accordance with this Section 2.1, Purchaser shall pay a fee for the Seller Transition Services and Additional Transition Services it receives during the Term as follows (collectively, the “Purchaser Service Fees”):

 

(i) Twelve Thousand Five Hundred Dollars ($12,500.00) per month plus any expenses associated with the services provided; and

 

(ii) with respect to any Additional Transition Services provided by Seller, on the timetable and in the amount agreed by the Parties and set out in the executed amendment to this Agreement under which such Additional Transition Services are provided as contemplated in ARTICLE IX.

 

(b) The Service Fees are exclusive of any sales tax, transfer tax, value-added tax, goods and services tax or similar tax (“Taxes”). Any Taxes (but excluding any Tax based upon net income) payable with respect to the Service Fees shall be invoiced by Seller and paid by Purchaser within thirty (30) days of receipt of such invoice. Seller shall be responsible for remitting any such Taxes to the appropriate taxing authority.

 

(c) If the cost to Seller of providing a Transition Service increases as a result of actions taken outside the scope of this Agreement by or at the request of Purchaser or as a result of any change in applicable law or regulation or action of any Government Entity (collectively, “Imposed Changes”), then the resulting increase in costs if approved by the Purchaser in advance, would be passed through to Purchaser by means of an increase in the relevant Service Fees in the amount of such actual increase in the cost of the provision of such Transition Services, plus any direct, out of pocket, up-front costs of modifying the Transition Services as a result of such Imposed Changes, provided, however, that (i) in no event shall Seller be obligated to perform any service hereunder other than in accordance with applicable law and regulation, and (ii) Seller shall not be obligated to perform such Service unless Purchaser agrees to pay such costs of modifying the Transition Services to comply with such Imposed Changes and such increased Service Fees.

 

Section 2.2 Expenses. Purchaser shall be responsible for any direct third-party out-of- pocket costs or expenses incurred by Seller, at pass-through amounts, and disclosed in writing to Purchaser prior to the date of this Agreement in connection with providing the Transition Services.

 

Section 2.3 Records. Each Party shall maintain records of all receipts, invoices, reports and other documents relating to the Transition Services rendered hereunder in accordance with applicable law and regulation and its standard accounting practices and procedures, which practices and procedures are employed by such Party in its provision of services for itself and its Affiliates.

 

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ARTICLE III
PAYMENT

 

Section 3.1 Invoicing and Payment. For the Transition Services described on Annex A on the date hereof, Purchaser shall pay the net monthly fees set forth in Section 2.1 within thirty (30) calendar days after receipt of an invoice from Seller. For any Additional Transition Services, if any, the net monthly fee shall be adjusted and paid by Purchaser in accordance with the executed amendment to this Agreement under which such Additional Transition Services are provided. For any third-party expenses incurred by Seller in connection with providing the Transition Services and payable by Purchaser in accordance with Section 2.2 hereof, Seller shall invoice Purchaser, and Purchaser shall remit payment to Seller for all such invoiced expenses within thirty (30) calendar days after receipt of each such invoice. Any undisputed amount unpaid after the expiration of thirty (30) calendar days after the due date shall bear interest equal to one-half percent (0.5%) per month of the overdue amount. Each invoice for expenses shall set forth in reasonable detail, for the period covered by such invoice, the source of the expenses incurred.

 

ARTICLE IV TRANSITION

 

Section 4.1 Return of Materials. Promptly at the end of the service period with respect to a Transition Service, at the end of the Term or upon termination of this Agreement in accordance with ARTICLE VI, as the case may be, Purchaser shall, at the other Party’s expense and written direction, return or destroy and certify the return or destruction of, any and all of the other Party’s books, records, files, databases, intellectual property (including embodiments thereof), Confidential Information (as defined below) or information related to customer data in the possession, custody or control of Purchaser (the “Materials”); provided that Purchaser shall be permitted to retain copies the Materials solely as required in order to comply with applicable law, rules and regulation, or for audit, compliance or regulatory purposes to the extent permitted by applicable law and regulation; and provided, further, that Purchaser shall not be obligated to destroy any Materials if such destruction would, in the reasonable opinion of counsel to such Purchaser, constitute a violation of applicable law or regulation.

 

ARTICLE V
INTELLECTUAL PROPERTY

 

Section 5.1 Title to Intellectual Property.

 

(a) Each of the Parties agrees that any intellectual property of the other Party made available to it in connection with the Transition Services, and any derivative works, additions, modifications or enhancements thereof created by the other Party pursuant to this Agreement, are and shall remain the sole property of the other Party, and such Party hereby irrevocably assigns any and all right, title and interest therein to such other Party. Each Party agrees not to use, and to cause its Affiliates not to use, intellectual property of the other Party for any purpose other than in connection with the performance of the Transition Services during the Term.

 

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(b) Each Party acknowledges that the other Party may be providing services similar to the Transition Services to its own businesses and/or to other third parties during the Term, without restriction hereunder.

 

Section 5.2 Use of Trademarks. Except as expressly set forth in the Merger Agreement, neither Party shall use the other Party’s trademarks, service marks, trade names, domain names or other source identifiers without such Party’s prior written consent.

 

Section 5.3 Software Licenses and Data Subscriptions. Except as provided in the Merger Agreement or as set forth on Schedule 5.3 hereto, Seller and its Affiliates shall not be required to transfer or assign to Purchaser any third-party software licenses, data subscriptions or any software or hardware owned by Seller or any of its Affiliates in connection with the provision of the Seller Transition Services.

 

Section 5.4 Patents. Except as expressly set forth in the Merger Agreement, neither Party shall use the other Party’s Patents without such Party’s prior written consent.

 

ARTICLE VI

TERM AND TERMINATION

 

Section 6.1 Term. The term of this Agreement (the “Term”) is twelve (12) months and shall commence on the Closing; provided that the Term of any individual Transition Service may be for a shorter period of time as may be set forth on Annex A hereto as agreed by the Purchaser in writing.

 

Section 6.2 Termination without Cause. Purchaser may terminate this Agreement without penalty at any time but with thirty (30) days advance notice by writing to Seller if Purchaser determines that there is no longer a business need for Transition Services. Purchaser shall pay Seller any undisputed Service Fees, costs, and expenses due or incurred for Transition Services performed prior to termination of the Agreement.

 

Section 6.3 Termination for Cause. Either Party (the “Terminating Party”) may terminate this Agreement with immediate effect by notice in writing to the other Party (the “Other Party”) on or at any time after the occurrence of any of the following events:

 

(a) the Other Party is in default of any of its material obligations under this Agreement and (if the breach is capable of remedy) has failed to remedy the breach within thirty (30) days after receipt of notice in writing from the Terminating Party giving particulars of the breach;

 

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(b) the Other Party shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official for it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any corporate action to authorize any of the foregoing;

 

(c) an involuntary case or other proceeding shall be commenced against the Other Party seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official for it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of sixty (60) days.

 

Section 6.4 Survival. Section 2.2 (Expenses), Section 2.3 (Records), ARTICLE III (Payments)(to the extent such fees accrued prior to termination, cancellation or expiration), Section 4.1 (Return of Materials), Section 5.1 (Intellectual Property), this Section 6.4 (Survival), Section 7.1 (Confidentiality), Section 8.2 (Limitations of Liability) and Article X (Miscellaneous) shall survive any termination or expiration of this Agreement.

 

ARTICLE VII
CONFIDENTIALITY

 

Section 7.1 Confidentiality.

 

(a) Each Party acknowledges that, in connection with the performance by a Party of its obligations hereunder, such Party may be provided with information about confidential and proprietary information of the other Party and third parties with which the other Party conducts business. The confidential information of such other Party and third parties is defined below and is collectively referred to as “Confidential Information.” In recognition of the foregoing, each Party covenants and agrees:

 

(i) that it will keep and maintain all Confidential Information in confidence, using such degree of care as is appropriate to avoid unauthorized use or disclosure;

 

(ii) that it will not, directly or indirectly, disclose any Confidential Information to anyone outside of the other Party or the Related Parties, as provided herein, except with the other Party’s prior written consent or as may be permitted under this ARTICLE VII;

 

(iii) that such Party will not make use of any Confidential Information for its own purpose or the benefit of anyone or any other entity other than the other Party, provided that Purchaser can make use of any Confidential Information related to the Business in its operation of the Business; and

 

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(iv) that such Party will take no action with respect to the Confidential Information that is inconsistent with its confidential and proprietary nature.

 

(b) Each Party shall be permitted to disclose the Confidential Information only as follows:

 

(i) to its employees, agents, auditors, counsel, directors, officers, and contractors (“Related Parties”) and Subcontractors, having a need to know such information in connection with the performance of the Transition Services. Each Party shall be responsible for all its Related Parties and Subcontractors’ compliance with the terms of this Agreement; and

 

(ii) if disclosure is required by applicable law or regulation, provided that a Party shall notify the other Party in writing as soon as reasonably practicable in advance of such disclosure, and provide the other Party with copies of any related information so that the other Party may take appropriate action to protect the Confidential Information.

 

(c) For purposes of this Agreement, Confidential Information shall include all business information of the other Party, including but not limited to the following:

 

(i) information relating to the other Party’s planned or existing computer systems and systems architecture, including computer hardware, computer software, documentation, methods of processing and operational methods;

 

(ii) sales, profits, organizational restructuring, new business initiatives and financial information;

 

(iii) information that describes the other Party’s products, including product designs, and how such products are administered and managed;

 

(iv) information that describes the other Party’s product strategies, tax interpretations, tax positions and treatment of any item;

 

(v) confidential information and software of, and contracts with (and any information related thereto), third parties with which the other Party conducts business;

 

(vi) information relating to the other Party’s customers; and

 

(vii) Seller’s customer information that is inadvertently accessed in accordance with Section 1.6 of the Agreement.

 

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(d) Notwithstanding the foregoing, Confidential Information shall not include information that (i) is or becomes generally available to the public other than as a result of a disclosure directly or indirectly by a Party or its Related Parties or Subcontractors in violation of this ARTICLE VII, (ii) was available to a Party on a non-confidential basis prior to its disclosure to such Party by the other Party or the other Party’s Related Parties or Subcontractors, (iii) is or becomes available on a non-confidential basis to a Party from a Person other than the other Party, provided that such Person was not known to the receiving Party to be bound by any agreement with the disclosing Party to keep such information confidential or to be otherwise prohibited from transmitting the information, or (iv) is independently developed by the Receiving Party or its Related Parties without use of the Confidential Information. Each Party acknowledges that the disclosure of Confidential Information may cause irreparable injury and damages, that money damages may not be a sufficient remedy for any actual or threatened disclosure and that a Party shall (without proof of actual damages) be entitled to seek equitable relief, including an injunction and specific performance, as a remedy if the other Party breaches or threatens to disclose Confidential Information in violation hereof. A breaching Party shall not object to the entry of an injunction or other equitable relief against such Party on the basis that an adequate remedy is available at law or lack of irreparable harm. Without limitation of the foregoing, each Party shall advise the other Party promptly in the event that it learns or has reason to believe that any person or entity, which has had access to Confidential Information, has violated or intends to violate the terms of this Agreement. This provision shall not in any way limit such other remedies as may be available to either Party at law or in equity.

 

Section 7.2 Systems Security. [Intentionally Omitted]

 

Section 7.3 Insurance. To the extent it has not already done so, Purchaser and Seller each shall obtain, within ninety (90) days of the date hereof, from a financially sound and reputable insurer, cyber security, and data breach liability insurance in an amount equal to at least $10,000,000 on terms and conditions reasonably satisfactory to the other Party and will cause such insurance policy to be maintained until the Termination Date.

 

ARTICLE VIII
REPRESENTATIONS AND WARRANTIES

 

Section 8.1 Representations and Warranties.

 

(a) Each Party represents and warrants that, on the Closing Date, it has the authority to enter into this Agreement and its performance under this Agreement will not conflict with any other obligation or agreement of such Party or with any law, rule or regulation.

 

(b) Except as expressly provided in this Agreement, no representation, warranty or condition, express or implied, statutory or otherwise, as to condition, quality, satisfactory quality, performance or fitness for purpose or otherwise is given by either Seller or Purchaser and all such representations, warranties and conditions are excluded except to the extent that their exclusion is prohibited by applicable law.

 

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Section 8.2 Limitations of Liability.

 

(a) THE AGGREGATE LIABILITY OF EITHER PARTY IN CONNECTION WITH THE PERFORMANCE, DELIVERY OR PROVISION OF THE TRANSITION SERVICES UNDER THIS AGREEMENT SHALL, WITH THE EXCEPTION OF A DATA BREACH, BE LIMITED TO $100,000 CUMULATIVELY.

 

(b) EXCEPT FOR DAMAGES ARISING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SELLER, THE PARTIES EXPRESSLY WAIVE AND FOREGO ANY RIGHT TO RECOVER EXEMPLARY, LOST PROFITS, CONSEQUENTIAL OR SIMILAR DAMAGES IN ANY LITIGATION ARISING OUT OF OR RESULTING FROM ANY CONTROVERSY OR CLAIM RELATING TO THIS AGREEMENT OR ANY OF THE TRANSITION SERVICES PROVIDED HEREUNDER, WHETHER SUCH CLAIM IS BASED ON WARRANTY, CONTRACT, TORT (INCLUDING NEGLIGENCE OR STRICT LIABILITY) OR OTHERWISE, EVEN IF AN AUTHORIZED REPRESENTATIVE OF SUCH PARTY IS ADVISED OF THE POSSIBILITY OR LIKELIHOOD OF THE SAME.

 

ARTICLE IX
CHANGE REQUEST

 

Section 9.1 Change Request.

 

(a) Subject to this ARTICLE IX, either Party may propose any change or addition to the Transition Services by written notice to the other Party specifying the proposed change in reasonable detail (such notice, a “Change Request”), provided, that any changed or additional services will be advisory or informational in nature, in accordance with the Introduction to this Agreement.

 

(b) Seller or Purchaser shall provide the other Party with a reasonably detailed written outline specification describing the nature of the change, an assessment of the impact of the change on the Transition Services, the Service Fees (as applicable) and an estimate of the time required to implement the change, the costs associated with the change and the terms for payment of such costs (such outline, an “Evaluation Report”) within twenty (20) Business Days of receiving the Change Request.

 

(c) The approving Party shall notify the requesting Party within ten (10) Business Days of the date on which the Evaluation Report was received whether or not the approving Party wishes to proceed with the Change Request; provided, however, that the Parties shall in good faith negotiate the terms and pricing of the Change Request before the requesting Party provides such notice to proceed.

 

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(d) Within ten (10) Business Days of receipt of the requesting Party’s notice to proceed with the Change Request, the approving Party shall produce a final Evaluation Report which shall include a comprehensive list of the charges for the implementation of the Change Request (“Change Request Charges”). Any Change Request Charges shall be calculated in a manner consistent with Section 2.1.

 

(e) Both the Seller and Purchaser shall act in good faith in relation to Change Requests, and shall not unreasonably withhold any consent, or cause any delay in relation to them; provided that, notwithstanding anything to the contrary herein, the approving Party shall have sole discretion regarding whether to provide Additional Transition Services which were not performed by Seller or Purchaser for the Business at any time during the one hundred eighty (180) day period prior to Closing. If the Seller and Purchaser cannot agree upon a Change Request or the approving Party’s final Evaluation Report (including the Change Request Charges), each of the Seller and Purchaser may refer the matter to be resolved in accordance with Section 1.2.

 

(f) The Seller shall not have any obligation to commence work in connection with any change to the approving Party Transition Services or any Additional Transaction Services until the relevant Change Request and Evaluation Report has been agreed to by each Party in writing.

 

ARTICLE X

MISCELLANEOUS

 

Section 10.1 No Third-Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any Person other than the Parties and their respective successors and permitted assigns and, to the extent specified herein, their respective Affiliates.

 

Section 10.2 Entire Agreement. This Agreement (including the Annexes and Schedule hereto), together with the Merger Agreement and any other documents delivered by the Parties in connection herewith or therewith, constitutes the entire agreement between the Parties with respect to the subject matter hereof and thereof and supersede any prior agreements or understandings between the Purchaser, on the one hand, and the Seller, on the other hand.

 

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Section 10.3 Notices. All notices, requests, demands, claims and other communications hereunder shall be in writing. Any notice, request, demand, claim or other communication hereunder shall be deemed duly delivered four (4) Business Days after it is sent by registered or certified mail, return receipt requested, postage prepaid, or one (1) Business Day after it is sent for next Business Day delivery via a reputable nationwide overnight courier service, in each case to the intended recipient as set forth below:

 

If to the Seller:   Copy to:
     

Customers Bank

701 Reading Ave

West Reading, PA 19611 Attention:

E-mail:

 

 

Attention: Facsimile: E-mail:

     
If to the Purchaser:   Copies to:

 

BM Technologies, Inc.

201 King of Prussia Road, Suite 240

Radnor, PA 19087

Attention: Bob Diegel

Email: rramsey@customersbank.com

 

 

Nelson Mullins Riley & Scarborough, LLP

101 Constitution Ave, NW, Suite 900

Washington DC 20001

Attention: Jonathan Talcott

Email: jon.talcott@nelsonmullins.com

 

Any Party may give any notice, request, demand, claim, or other communication hereunder using any other means (including personal delivery, expedited courier, messenger service, ordinary mail, or electronic mail), but no such notice, request, demand, claim or other communication shall be deemed to have been duly given unless and until it actually is received by the party for whom it is intended. Any Party may change the address to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth.

 

Section 10.4 Amendment; Waiver. Subject to ARTICLE IX and Sections 1.4 and 10.10, any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by both Parties, or in the case of a waiver, by the Party against whom the waiver is to be effective. No failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

 

Section 10.5 Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable, the Parties agree that the body making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration or area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified.

 

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Section 10.6 Binding Agreement; 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 Party, which written approval shall not be unreasonably withheld, delayed, or conditioned. Notwithstanding the foregoing, this Agreement, and all rights, interests and obligations hereunder, may be assigned, without such consent, by either Party to an Affiliate thereof or an entity that acquires all or substantially all of such Party’s or such Affiliate’s business or assets. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.

 

Section 10.7 Governing Law. This Agreement and any disputes hereunder shall be governed by and construed in accordance with the internal laws of the Commonwealth of Pennsylvania without giving effect to any choice or conflict of law provision or rule (whether of the Commonwealth of Pennsylvania or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the Commonwealth of Pennsylvania.

 

Section 10.8 Submission to Jurisdiction. Subject to Section 1.2 hereof, each of the Parties to this Agreement (a) agrees that all actions arising out of or relating to this Agreement or any of the transactions contemplated by this Agreement shall be heard and determined in the Federal Courts of the United States of America or the courts of the Commonwealth of Pennsylvania, (b) irrevocably consents to submit itself to the exclusive jurisdiction and venue of such courts in any action, (c) agrees that all claims in respect of such action shall be heard and determined in any such court, (d) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, and (e) agrees not to bring any action arising out of or relating to this Agreement or any of the transactions contemplated by this Agreement in any other court. Each of the Parties hereto waives any defense of inconvenient forum to the maintenance of any action so brought and waives any bond, surety or other security that might be required of any other Party with respect thereto. Any Party hereto may make service on another Party by sending or delivering a copy of the process to the Party to be served at the address and in the manner provided for the giving of notices in Section 10.3. Nothing in this Section 10.8, however, shall affect the right of any Party to serve legal process in any other manner permitted by law.

 

Section 10.9 Waiver of Jury Trial. To the extent permitted by applicable law, each Party hereby irrevocably waives all rights to trial by jury in any action (whether based on contract, tort or otherwise) arising out of or relating to this Agreement or the transactions contemplated hereby or the actions of any Party in the negotiation, administration, performance and enforcement of this Agreement. Each Party (a) certifies that no Representative of the other Party has represented, expressly or otherwise, that such Party would not, in the event of any action, seek to enforce the foregoing waiver and (b) acknowledges that it and the other Party have been induced to enter into this Agreement, by among other things, the mutual waiver and certifications in this Section 10.9.

 

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Section 10.10 Force Majeure. If either Party is prevented from complying, either totally or in part, with any of the terms or provisions of this Agreement by reason of fire, flood, storm, strike, lockout or other labor trouble, any law, order, proclamation, regulation, ordinance, demand or requirement of any governmental authority, riot, war, terrorist act, rebellion or other causes beyond the reasonable control of such Party, or other acts of God (a “Force Majeure Event”), then, upon written notice to the other, the affected provisions and/or other requirements of this Agreement shall be suspended or reduced by an amount consistent with reductions made to the other operations of such Party affected by the Force Majeure Event during the period of such disability and the affected Party shall have no liability to the other in connection therewith. Each Party shall use reasonable commercial efforts to remove such disability within fifteen (15) days of giving notice of such disability.

 

Section 10.11 Mutual Drafting. This Agreement is the mutual product of the Parties, and each provision hereof has been subject to the mutual consultation, negotiation, and agreement of each of the Parties, and shall not be construed for or against any Party. Each Party acknowledges and represents that it has been represented by its own legal counsel in connection with the transactions contemplated hereby, with the opportunity to seek advice as to its legal rights from such counsel.

 

Section 10.12 Headings. The headings in this Agreement are for convenience of reference only and will not affect the construction of any provisions hereof.

 

Section 10.13 Conflicts. To the extent any term or provision of the Merger Agreement, or any other document or other agreement executed in connection with the Merger Agreement, is in conflict with any term or provision of this Agreement or any Annex or Schedule hereto, the terms and provisions of this Agreement and the Annexes or Schedules hereto shall govern solely to the extent of any such conflict. To the extent any term or provision of this Agreement is in conflict with any term or provision of any Annex or Schedule hereto, the terms and provisions of the Annex or Schedule hereto shall govern solely to the extent of any such conflict.

 

Section 10.14 Counterparts and PDF Signature. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. The electronic transmission of any signed original counterpart of this Agreement shall be deemed to be the delivery of an original counterpart of this Agreement.

 

Section 10.15 Interpretation. For purposes of this Agreement, (a) the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation”; (b) the word “or” is not exclusive; and (c) the words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this Agreement as a whole. Unless the context otherwise requires, references herein: (x) to Articles, Sections, Schedules and Exhibits mean the Articles and Sections of, and Schedules and Exhibits attached to, this Agreement; (y) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the Party drafting an instrument or causing any instrument to be drafted. The Schedules and Exhibits referred to herein shall be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein.

 

[End of Text; Signature Page Follows]

 

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IN WITNESS WHEREOF, the Parties hereto have executed this Transition Services Agreement as of the date first written above.

 

  BM TECHNOLOGIES, INC.
     
  By: /s/ Luvleen Sidhu
  Name:  Luvleen Sidhu
  Title: Chief Executive Officer
     
  CUSTOMERS BANK
     
  By: /s/ Richard Ehst
  Name: Richard Ehst
  Title: President and Chief Executive Officer

 

Seller

Services Coordinator:

James Collins

73 Old Dublin Pike

Doylestown PA 18901

(267) 356-0105

 

Purchaser

Services Coordinator:

Robert Diegel

201 King of Prussia Rd

Suite 350

Radnor, PA 19087

484-986-7790

 

[Signature Page to Transition Services Agreement]

 

 

 

 

ANNEX A

SELLER TRANSITION SERVICES

 

[Schedules to this exhibit have been omitted pursuant to Item 601(b)(2) of Registration S-K. The Registrant hereby agrees to furnish a copy of any omitted schedules to the SEC upon request.]

 

 

 

 

ANNEX B

PURCHASER TRANSITION SERVICES


[Schedules to this exhibit have been omitted pursuant to Item 601(b)(2) of Registration S-K. The Registrant hereby agrees to furnish a copy of any omitted schedules to the SEC upon request.]

 

 

 

 

Exhibit 10.2

 

SOFTWARE LICENSE AGREEMENT

 

This Software License Agreement (“Agreement”) is entered into this 4th day of January, 2021 (the “Effective Date”) by and between BM Technologies, Inc., a Delaware corporation, with offices at 201 King of Prussia Road, Suite 240 Radnor, PA 19087 (“Licensor”), and Customers Bank, a Pennsylvania state-chartered bank with offices located at 99 Bridge Street, Phoenixville, PA 19460 (“Licensee”).

 

Preamble

 

WHEREAS, Licensor owns the Software; and

 

WHEREAS, Licensee desires to utilize such Software, including any Updates, Upgrades, customizations, or corrections (collectively, “Software Changes”) thereto; and

 

WHEREAS, for good and valuable consideration, the receipt of which is hereby acknowledged, Licensor is willing to license the Software and any Software Changes to Licensee; and

 

WHEREAS, Licensee is willing to accept the Software license under the conditions set forth herein.

 

NOW THEREFORE, Licensor and Licensee agree as follows:

 

Agreement

 

1. Definitions

 

“Affiliate” means, with respect to a party, any entity controlling, controlled by, or under common control with such party. For purposes of this definition, “control” means direct or indirect ownership of fifty percent (50%) or more of the shares of the entity entitled to vote in the election of directors (or, in the case of an entity that is not a corporation, for the election of the corresponding managing authority).

 

“Assumed Value” means the ten million-dollar ($10,000,000.00) valuation of the License granted hereunder.

 

“Customer” means a customer of Licensee or any of its Affiliates, including any person who (a) applies to Licensee or any of its Affiliates for a financial product or service; (b) has obtained any financial product or service from Licensee or any of its Affiliates; (c) has a loan or other account serviced or subserviced by Licensee or any of its Affiliates; and/or (d) does not have an account with Licensee or any of its Affiliates but nonetheless engages in a transaction using property or services of Licensee or any of its Affiliates, such as use of a Licensee ATM by a non-Licensee customer.

 

“Customer Information” means any personally identifiable information or records in any form (written, electronic, or otherwise) relating to a Customer, including (i) a Customer’s name, address, telephone number, loan number, deposit account number, loan payment history, delinquency status, insurance carrier or payment information, tax amount or payment information; (ii) the fact that a Customer has a relationship with Licensee or any of its Affiliates; and (iii) any other personally identifiable information of a Customer; provided that “Customer Information” shall not mean any such information that Licensor has obtained independently and not in connection with this Agreement or any other agreement with Licensee or any of its Affiliates.

 

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“Early Termination Penalty” means the portion of the Assumed Value to be paid by Licensor to Licensee, and is calculated by multiplying the Assumed Value by the quotient of the number of months remaining in the Term after termination divided by 120.

 

“Information Security Program” means Licensor’s program or programs to: (a) ensure the security and confidentiality of Confidential Information to which Licensor has access; (b) protect against any anticipated threats or hazards to the security or integrity of the Confidential Information; and (c) protect against unauthorized access to or use of Confidential Information that could result in substantial harm or inconvenience to Licensee or any Customer. Such Information Security Program shall include maintenance of a comprehensive written Information Security Program and computer system security requirements sufficient to comply with the Privacy and Data Security Requirements and protect all Confidential Information.

 

“Intellectual Property Rights” means (i) copyrights and other rights associated with works of authorship; (ii) trademark and trade name rights and similar rights; (iii) trade secret rights; (iv) patents, designs, algorithms, utility models, and other industrial property rights, and all improvements thereto; and (v) all registrations, applications, renewals, extensions, continuations, divisions, or reissues thereof now or hereafter in force.

 

“Interagency Guidelines” means the Interagency Guidelines Establishing Standards For Safeguarding Customer Information published on February 1, 2001, as the same may be amended from time to time.

 

“Privacy and Data Security Requirements” means the obligations imposed by: (a) Title V of the Gramm-Leach-Bliley Act, 15 U.S.C. §§ 6801 et seq.; (b) the applicable federal regulations implementing such act; (c) the Interagency Guidelines; and (d) all other applicable international, federal, state and local laws, rules, regulations, and orders relating to the privacy and security of Customer Information, including the federal Fair Credit Reporting Act, 15 U.S.C. §§ 1681 et seq.; the California Consumer Privacy Act, Cal. Civ. Code § 1798.100, et seq.; the NY SHIELD Act, N.Y. Gen. Bus. Law § 899-AA, et seq.; and any other similar state laws, each as amended from time to time; (e) Payment Card Industry (PCI) Data Security Standards; and (f) all applicable policies and procedures of Licensee communicated to Licensor.

 

“Representatives” means a party’s employees, officers, directors, agents, consultants, advisors, or lawyers.

 

“Software” means the mobile banking technology provided by Licensor to Licensee and includes, but is not limited to, the functionality set forth in Exhibit “A” and includes all “Software Changes.”

 

“Software Changes” has the meaning set forth above.

 

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“Update” means any error correction, bug or defect fix, enhancement, modification, patch, alteration, improvement, correction, addition, or revision to improve the performance or correct any error or defect.

 

“Upgrade” means any enhancement, improvement, modification, addition, localization, successor or new version, or new functionality that is not an Update.

 

2. License Grant

 

2.1 Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee and its Affiliates, and Licensee and its Affiliates hereby accept from Licensor, a non-exclusive, nontransferable, royalty-free, fully paid-up license to use both the Software and any Software Changes in executable code form during the Term within the United States.

 

2.2 Licensor shall continue to own all right, title, and interest in and to the Software, the Software Changes, and all Intellectual Property Rights embodied therein or related thereto, including, but not limited to, the source and executable codes. Except as expressly provided herein, Licensor grants no Intellectual Property Rights to Licensee or its Affiliates by implication, estoppel, or otherwise.

 

2.3 Licensee shall safeguard the Software and Software Changes and its related materials with that degree of care as is exercised by other similarly situated financial institutions such that no unauthorized use is made of the Software, Software Changes, or related materials and no disclosure of any part of their contents is made to anyone other than Licensee’s Representatives whose duties reasonably require such disclosure, or, as otherwise reasonably necessary in the ordinary course of Licensee’s business. Licensee shall make its Representatives fully aware of their responsibility to fulfill the obligations of Licensee under this Agreement.

 

2.4 During the Term, Licensor may, at its sole discretion, provide Updates to or Upgrades of the Software. Licensor shall, from time to time, update the Software to improve basic functionality, security, and responsiveness and ensure that the Software provides at least industry-standard functionality, security, and responsiveness. Licensor anticipates that a minimum of two such updates per year will be required to ensure that Licensee continues running a current version of the Software. Unless otherwise agreed in writing by the parties, Licensor shall not charge, and Licensee shall not be responsible to pay, any additional fees, costs, or expenses for Updates, Upgrades, or other Software Changes made by Licensor. In no event shall Licensor materially degrade the functionality, responsiveness, or security of the Software.

 

3. Software Warranties

 

3.1 Related to the Software and Software Changes, Licensor represents and warrants that:

 

(a) Licensor has all Intellectual Property Rights necessary to provide Licensee with the Software and Software Changes;

 

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(b) Licensor does not infringe the Intellectual Property Rights of any third party in licensing to Licensee the Software or the Software Changes;

 

(c) Licensor will make any Software Changes to the Software under this Agreement in accordance with industry standards and in a professional and workmanlike manner;

 

(d) The Software will remain free from material programming errors and defects in workmanship and materials and will substantially conform to the specifications included in Exhibit “A” attached hereto for one year from delivery of the software to Licensor (“Initial Warranty Period”). If material programming errors are discovered in the Software during the Initial Warranty Period, Licensor shall promptly remedy such errors at no additional expense to Licensee.

 

(e) Following delivery to Licensee of any Software Changes to the Software, such Software Changes will remain free from material programming errors and defects in workmanship and materials, and will substantially conform to the specifications and any related documentation for one-hundred eighty (180) days from delivery thereof (“Software Changes Warranty Period”). If material programming errors are discovered in the Software Changes during the Software Changes Warranty Period, Licensor shall promptly remedy such errors at no additional expense to Licensee.

 

3.2 Except as otherwise stated in Section 3.1 above, Licensor makes no other warranties with respect to the Software or the Software Changes, including but not limited to warranties of merchantability or fitness for a particular purpose.

 

4. Intellectual Property Rights and Restrictions on Use

 

4.1 Licensee recognizes that the Software and Software Changes, if any, are the property of, and all rights thereto are owned by Licensor. Licensee also acknowledges that such Software and Software Changes are a trade secret of Licensor, are valuable and confidential to Licensor, and that its use and disclosure must be carefully and continuously controlled.

 

4.2 Title to the Software and Software Changes, if any, shall always remain with Licensor.

 

4.3 The Software is intended to be used only by Licensee and its Affiliates as set forth in this Agreement to service Licensee’s Customers, including direct-to-consumer banking or for use by employees as direct-to-consumer users of Licensee’s Software.

 

4.4 Licensee shall treat the Software and Software Changes, if any, as confidential and proprietary, and shall protect them in the same manner that it protects the confidentiality of its own similarly confidential information. While this Agreement is in effect, or while Licensee has custody and possession of the Software or Software Changes, Licensee will not:

 

(a) provide or make available the Software or Software Changes to any person or entity other than employees of Licensee who have a need to know consistent with Licensee’s use thereof under this Agreement, unless otherwise agreed in writing by the parties hereto; or

 

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(b) create or attempt to create, or permit others to create or attempt to create, by disassembling, reverse engineering or otherwise, the source program or source code or any part thereof from the object program or other information made available to Licensee pursuant to this Agreement.

 

4.5 Licensee agrees to promptly notify Licensor if it obtains information as to any unauthorized possession, use, or disclosure of the Software or Software Changes by any person or entity, and further agrees to cooperate with Licensor in protecting Licensor’s proprietary rights to the Software and Software Changes.

 

4.6 Licensee shall not use the Software or Software Changes to offer private label banking services that directly compete with Licensor’s business existing as of the Effective Date; provided that, nothing herein shall prevent Licensee from using the Software or Software Changes in private label banking arrangements in cooperation with Licensor.

 

4.7 If Licensee or its Representatives materially breach any material provision of this Agreement, such material breach must be cured within thirty (30) days of receipt of Licensor’s written notice describing such material breach.

 

4.8 The Parties shall not develop any Intellectual Property Rights that will be deemed jointly owned unless they have agreed, in advance and in a separate writing, that such Intellectual Property Rights will be jointly owned.

 

4.9 Licensee will not, and will not permit any third party to: (a) transmit viruses or other malicious computer code on, or interfere with the integrity or performance of, the Software or Software Changes; (b) decompile, disassemble, reverse engineer (except to the extent expressly permitted by applicable law), or otherwise attempt to derive source code or other trade secrets from the Software or Software Changes; (c) modify, translate, or create any derivative works based upon the Software or Software Changes, or any portion thereof; (d) distribute, disclose, market, rent, lease, assign, sublicense, pledge or otherwise transfer access to the Software or Software Changes, in whole or in part, to any third party; (e) release the results of benchmark tests or other comparisons of the Software or Software Changes with other programs; (f) remove, efface, or obscure any copyright or other proprietary notices or legends included in the Software or Software Changes; or (g) otherwise use or access the Software or Software Changes in any manner exceeding the scope of this Agreement.

 

4.10 As between the parties, Licensor owns all right, title, and interest in and to the Intellectual Property Rights used to provide the Software or Software Changes. Licensee shall have only those license rights in or to the Software of Software Changes expressly granted to it pursuant to this Agreement, and all other rights are reserved by Licensor.

 

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5. Term and Termination

 

5.1 The license subject to this Agreement shall continue until the earlier to occur of:

 

(a) The ten-year anniversary of the Effective Date;

 

(b) Licensee’s material breach of the material terms of the Agreement that remains uncured after the period specified in Section 4.7;

 

(c) Licensor’s material breach of the material terms of the Agreement that remains uncured thirty (30) days after receipt of Licensee’s written notice describing such material breach; or

 

5.2 Within ten (10) business days of termination of the Agreement under Section 5.1(c) above, Licensor shall pay Licensee the Early Termination Penalty.

 

5.3 Upon the termination of the Agreement as set forth herein, Licensor shall have the right to take possession of the Software and Software Changes, if any. Licensee agrees to cooperate with Licensor in transferring the Software Changes to Licensor upon termination of this Agreement.

 

5.4 Notwithstanding anything to the contrary set forth herein, Licensee may terminate the Agreement at any time, without notice, and without penalty, and for any reason or no reason at all.

 

5.5 Upon expiration or termination of this Agreement, Licensor shall use commercially reasonable efforts to assist Licensee in effecting an orderly transition of Licensee’s Customers and Customer Information to another vendor selected by Licensee at its sole discretion. Subject to the foregoing,

 

(a) Licensor shall provide a copy of all Customer Information held by Licensor in the form or format reasonably requested by Licensee;

 

(b) Licensee shall cease using and uninstall or otherwise deactivate, as requested, the Software and all Software Changes.

 

6. Indemnification; Limitation of Liability

 

6.1 Licensor agrees to indemnify, defend, and hold Licensee and its Affiliates and Representatives (collectively, the “Licensee Indemnified Parties”) harmless from and against any claims brought by any third-party against the Licensee Indemnified Parties to the extent such claims are based on or arise out of allegations that the Software or the Software Changes infringe upon the Intellectual Property Rights of any third-party. Licensor shall have no liability or responsibility under the foregoing sentence to the extent such third-party claims are based on or arise out of customizations or enhancements to the Software or the Software Changes made by Licensee without Licensor’s knowledge.

 

6.2 Licensee agrees to indemnify, defend, and hold Licensor and its Affiliates and Representatives (collectively, the “Licensor Indemnified Parties”) harmless from and against any claims brought by any third-party against the Licensor Indemnified Parties to the extent such claims are based on or arise out of customizations or enhancements to the Software or Software Changes made by Licensee without Licensor’s knowledge.

 

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6.3 The indemnification obligations set forth herein are contingent upon the party to be indemnified (“Indemnified Party”):

 

(a) Giving the party providing indemnification hereunder (“Indemnifying Party”) prompt written notice of any action brought against the Indemnified Party; and

 

(b) Cooperating with the Indemnifying Party in the defense of any such action and allowing the Indemnifying Party to control the defense and settlement of any such action at its sole cost and expense.

 

6.4 NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY OR LIMITATION OF LIABILITY, NEITHER PARTY WILL BE LIABLE TO THE OTHER PARTY FOR CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES OF ANY KIND (INCLUDING, WITHOUT LIMITATION, LOST REVENUES OR PROFITS, LOSS OF USE, OR LOSS OF GOODWILL OR REPUTATION) WITH RESPECT TO ANY CLAIMS ARISING FROM OR RELATING TO THIS AGREEMENT OR THE SOFTWARE, WHETHER BASED ON CONTRACT, TORT OR OTHERWISE (INCLUDING NEGLIGENCE AND STRICT LIABILITY), REGARDLESS OF WHETHER SUCH PARTY WAS ADVISED, HAD OTHER REASON TO KNOW, OR IN FACT KNEW OF THE POSSIBILITY THEREOF.

 

7. Confidentiality

 

7.1. Each party that receives information from the other party hereto (the “Receiving Party”) undertakes to retain in confidence the terms of this Agreement and all other non-public information, technology, Customer Information, materials and know-how of the other party (the “Disclosing Party”) disclosed or acquired by the Receiving Party pursuant to or in connection with this Agreement that is either designated as proprietary or confidential or, by the nature of the circumstances surrounding disclosure, ought in good faith to be treated as proprietary or confidential (“Confidential Information”); provided that each party may disclose the terms and conditions of this Agreement to its immediate legal and financial consultants in the ordinary course of its business. The Receiving Party will not use any Confidential Information for any purpose other than to carry out the activities contemplated by this Agreement. The Receiving Party agrees to use commercially reasonable efforts to protect the Disclosing Party’s Confidential Information, and in any event, to take precautions at least as great as those taken to protect its own confidential information of a similar nature.

 

7.2 The Receiving Party will promptly notify the Disclosing Party in writing in the event that the Receiving Party learns of any unauthorized use or disclosure of any Confidential Information that it has received from the Disclosing Party, and will cooperate in good faith to remedy such occurrence to the extent reasonably possible. The restrictions set forth in this Section 7 will not apply to any information that: (a) was known by the Receiving Party without an obligation of confidentiality prior to disclosure thereof by the Disclosing Party; (b) was in or entered the public domain through no fault of the Receiving Party; (c) is disclosed to the Receiving Party by a third party legally entitled to make such disclosure without violation of any obligation of confidentiality; (d) is required to be disclosed by applicable laws or regulations (but in such event, only to the extent required to be disclosed); or (e) is independently developed by the Receiving Party without reference to any Confidential Information of the Disclosing Party.

 

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7.3 Upon request of the Disclosing Party, the Receiving Party will return all materials, in any medium, that contain or reveal all or any part of any Confidential Information of the Disclosing Party or certify to the Disclosing Party destruction of the Receiving Party’s copies of Confidential Information. Notwithstanding the foregoing, the Receiving Party may retain Confidential Information only the extent required by applicable laws or regulations. The Receiving Party acknowledges that breach of this provision by it would result in irreparable harm to the Disclosing Party, for which money damages would be an insufficient remedy, and therefore that the Disclosing Party will be entitled to seek injunctive relief to enforce the provisions this Section.

 

7.4 Under no circumstances will Licensee’s Confidential Information (whether stored electronically or in hard copy format) be directly or indirectly transmitted to or accessed from any location that is not subject to the laws and jurisdiction of the United States of America without the prior written consent of Licensee. Neither Licensor nor its Representatives shall directly or indirectly access any Customer Information or Licensee’s software, networks, systems or data from any location that is not subject to the laws and jurisdiction of the United States of America without the prior written consent of Licensee. If Licensor’s Representatives store or access Customer Information on a portable device, such Customer Information must be encrypted in a reasonable manner.

 

8. Security.

 

8.1 Licensor will maintain and enforce safety, electronic, and physical security procedures with respect to its access, use, and possession of Licensee’s Confidential Information, including Customer Information, that are (i) compliant with Licensee’s information security guidelines, policies and requirements (including Database Security Technical Implementation Guide (STIG) templates, National Institute of Standards and Technology (NIST) standards, and Control Objectives for Information and related Technology (COBIT) frameworks), which may be provided by Licensee to Licensor from time to time or, if such guidelines, policies and requirements are not provided by Licensee, at least compliant with the Federal Risk and Authorization Management Program (FedRAMP) standards and other industry standards for such types of locations, and (ii) which provide appropriate technical and organizational safeguards against accidental or unlawful destruction, loss, alteration or unauthorized disclosure or access of such information.

 

8.2 Without limiting the generality of the foregoing, Licensor will take all reasonable measures to secure and defend its locations and equipment against “hackers” and others who may seek, without authorization, to modify or access Licensor systems or the information found therein. Licensor will periodically test its systems for potential areas where security could be breached.

 

8.3 Licensor (a) will deliver to Licensee a root cause assessment and future incident mitigation plan with regard to any breach of security or unauthorized access affecting Licensee’s Confidential Information, (b) will provide Licensee all written details regarding Licensor’s internal investigation regarding any security breach, (c) upon Licensee’s request, provide a second more in-depth investigation and results of findings, (d) agrees not to notify any regulatory authority nor any Customer or consumer, on behalf of Licensee unless Licensee specifically requests in writing that Licensor do so, and (e) shall cooperate with Licensee to work together to formulate a plan to rectify all security breaches.

 

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9. General Provisions

 

9.1 This Agreement (including all exhibits, attachments, and amendments hereto) constitutes the entire agreement and understanding of the parties as to the subject matter hereof and supersedes and replaces in its entirety any prior discussions or agreements, all of which are merged herein. None of the terms of this Agreement may be amended or otherwise modified except by an instrument in writing executed by Licensor and Licensee. If any term of this Agreement shall be held to be invalid, illegal or unenforceable, the validity of all other terms hereof shall in no way be affected thereby, and this Agreement shall be construed and be enforceable as if such invalid, illegal, or unenforceable term had not been included herein. Section headings are for convenience or reference only and shall not govern the interpretation of any of the provisions of this Agreement

 

9.2 This Agreement shall not be construed so as to confer any right or benefit upon any person or entity other than the parties to this Agreement and their respective successors and assigns.

 

9.3 This Agreement shall be governed by, and enforced in accordance with, the internal laws of the Commonwealth of Pennsylvania, including its statutes of limitations.

 

9.4 Licensor and Licensee each hereby irrevocably submits to the nonexclusive jurisdiction of the courts of the Commonwealth of Pennsylvania and the United States District Court of the Eastern District of Pennsylvania for the purpose of any suit, action or other proceeding arising out of or relating to this Agreement. Licensor and Licensee each hereby further agrees to service of process in any such suit being made upon such party by mail at the address specified for notices in Section 9.9 hereof.

 

9.5 LICENSOR AND LICENSEE EACH WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER, OR THE PERFORMANCE OF ANY SUCH RIGHTS OR OBLIGATIONS.

 

9.6 This Agreement does not in any way create the relationship of principal and agent, or any similar relationship between Licensor and Licensee, including, but not limited to, that of joint venturers, partners, employees, agents or associates. Neither party is granted any right or authority to assume or create any obligation or responsibility for, or on behalf of, the other party or to otherwise bind the other party, other than as may be expressly authorized in this Agreement.

 

9.7 Licensor nor Licensee shall (and neither shall have any right to) assign, sell, transfer, delegate or otherwise dispose of, whether voluntarily or involuntarily, by operation of law or otherwise, this Agreement or any rights or obligations under this Agreement without the express written consent of the other party; provided that Licensor may assign this agreement to an affiliate of Licensor without written consent of Licensee. Any attempted assignment in violation of this Section 9.7 shall be void and of no effect. Notwithstanding the foregoing, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors (including, without limitation, successors by merger) and permitted assigns.

 

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9.8 No course of dealing, course of performance or failure of either party to enforce strictly any term, right or condition of this Agreement shall be construed as a waiver of any other term, right or condition. No waiver or breach of any provision of this Agreement shall be construed to be a waiver of any subsequent breach of the same or any other provision.

 

9.9 All notices and other communications required or permitted under this Agreement shall be in writing and addressed to Licensor or Licensee, as the case may be, at their respective addresses set forth below:

 

If to Licensor:

 

BM Technologies, Inc.

201 King of Prussia Road, Suite 350

Radnor, PA 19087

Attn: Robert Savino, CPO

E-mail: RSavino@bankmobile.com

 

With a copy to:

 

BM Technologies, Inc.

201 King of Prussia Road, Suite 240

Radnor, PA 19087

Attn: Chief Financial Officer

 

If to Licensee:

 

Customers Bank

701 Reading Avenue

West Reading, PA 19611

Attn: Jim Collins, Chief Administrative Officer

Telephone: (267) 327-4942

E-mail: JCollins@customersbank.com

 

With a copy to:

 

Customers Bank

701 Reading Avenue

West Reading, PA 19611

Attn: Michael A. De Tommaso, General Counsel

Telephone: (484) 334-4233

E-mail: MDeTommaso@customersbank.com

 

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All notices and other communications required or permitted under this Agreement shall be effective upon the earlier of actual receipt thereof by the person to whom notice is directed or, in the case of notices and communications sent by United States mail, three (3) Business Days after such notice or communication shall have been deposited in the United States mail.

 

9.10 This Agreement may be executed in any number of separate counterparts, all of which, when taken together, shall constitute one and the same instrument, notwithstanding the fact that all parties did not sign the same counterpart.

 

9.11 Whenever the context shall require, the plural shall include the singular, the whole shall include any part thereof, and any gender shall include both genders.

 

9.12 This Agreement may be executed by digital signatures and delivered electronically in PDF format which shall be given the same legal weight as though they were ink original signatures.

 

9.13 Neither party shall be liable to the other for any failure or delay in performing its obligations hereunder (or any resulting loss or damage) if such failure or delay is primarily due to circumstances beyond its reasonable control, including, but not limited to, (a) unavoidable Internet network failures or Internet capacity limitations, (b) acts of God including storms, earthquakes, fires, pandemics, epidemics, or (c) unavoidable acts of third parties including terrorist acts, acts of civil or military authorities, fires, embargoes, war, or riot.

 

9.14 All provisions of this Agreement that by their nature are intended to survive the expiration or termination of this Agreement shall survive and remain in full force and effect, including, but not limited to, Sections 1, 3, 4, 5.4, 5.6, 6, 7, 9.3, 9.4, 9.5, and 9.9.

 

9.15 Licensor shall cooperate with Licensee and its Affiliates, and its or their third-party contractors as is reasonably necessary for Licensee and its Affiliates to receive the full benefits of its rights under this Agreement.

 

[Signatures appear on the following page]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Software License Agreement on this 4th day of January, 2021.

 

Customers Bank (“Licensee”)  
     
By:  /s/ Richard Ehst   
  Name:   Richard Ehst  
  Title: President and Chief Executive Officer  
     
BM Technologies, Inc. (“Licensor”)  
     
By:  /s/ Luvleen Sidhu   
  Name:  Luvleen Sidhu  
  Title: Chief Executive Officer  

 

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EXHIBIT “A”

 

[Schedules to this exhibit have been omitted pursuant to Item 601(b)(2) of Registration S-K. The Registrant hereby agrees to furnish a copy of any omitted schedules to the SEC upon request.]

 

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EXHIBIT “B”

 

SOURCE CODE ESCROW ADDENDUM

 

Licensee may elect to have a copy of the Source Code of the Software and any Software Changes placed in escrow. If Licensee chooses this option, concurrent with the execution of this Agreement, the parties will execute an escrow agreement with a reputable source code escrow management firm to be agreed upon by both parties, and Licensor will deliver to the escrow agent a complete master, reproducible copy of all Software Source Code. “Source Code” means software code in human-readable language, high-level language from which, when compiled or assembled becomes the object code of a software program, including all build tools necessary for an ordinarily skilled programmer to compile or assemble the code into fully functioning object code. Licensor will update the Software Source Code in escrow following any update or upgrade to the Software to reflect all revisions, modifications and enhancements to the Software that are made available under this Agreement. Licensee will pay all fees and charges of any kind whatsoever due to the escrow agent so as to maintain the escrow agreement in full force and effect at all times during the term of this Agreement. Upon occurrence of a Release Condition, the Software Source Code placed in escrow will be delivered to Licensee for use, reproduction and modification solely in connection with Licensee’s use, maintenance and support of the Software in accordance with its rights under this Agreement. “Release Condition(s)” include each of the following: (a) Licensor is adjudged insolvent or bankrupt, or becomes the subject of any proceedings seeking relief under any foreign or domestic laws relating to insolvency; (b) there is an assignment of Licensor for the benefit of its creditors; (c) there is an appointment of a receiver, liquidator, or trustee of any of the Licensor’s property or assets and such receiver liquidator, or trustee fails to timely assume this Agreement as an executory contract; or (d) Licensor or its business is liquidated, dissolved or wound up. Licensor hereby grants to Licensee a non-exclusive, royalty-free license to use, copy, reverse engineer and create derivative works of the Software solely for the purposes specified in this provision. Licensee covenants not to exercise its rights under this provision until the occurrence of a Release Condition.

 

 

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Exhibit 10.3

 

DEPOSIT PROCESSING SERVICES AGREEMENT

 

THIS DEPOSIT PROCESSING SERVICES AGREEMENT (this “Agreement”) is entered into as of this 4th day of January, 2021 (“Effective Date”) by and between Customers Bank (“Bank”), a Member of the Federal Reserve System with its principal place of business at 99 Bridge St., Phoenixville, PA 19460, and BM Technologies, Inc. (“BMT”), a Delaware corporation with its principal place of business at 201 King of Prussia Road, Suite 240, Radnor, PA 19087. BMT and Bank are hereinafter referred to, collectively, as the “Parties,” and individually each as a “Party.”

 

RECITALS

 

Bank is a Member of the Federal Reserve System that, among other things, offers and maintains personal deposit accounts for customers.

 

BMT is engaged in the business of white label banking, (also known as Banking as a Service or “BaaS”) and banking platform technology (“FinTech”). Through the BaaS model, BMT partners with chartered banks and non-chartered FinTech companies to provide the technology and banking compliant infrastructure to allow partners’ employees, prospects and customers to benefit from accelerated money movement, unique rewards and incentives as well as attractive deposit products (and other financial services products), including but not limited to the servicing and delivery of personal deposit and loan accounts with customized features to such partners.

 

The Parties desire to work together to establish and maintain Bank personal deposit accounts in connection with such customized programs offered by BMT.

 

NOW, THEREFORE, in consideration of the mutual covenants and representations contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:

 

SECTION I
DEFINITIONS

 

1.1 Certain Definitions. As used in this Agreement, the following terms have the definitions indicated.

 

“Applicable Law” means all applicable federal and state statutes, regulations, judicial decisions, rules, orders and requirements, of a Regulatory Authority as such statutes, regulations, requirements, or orders, may be amended or in effect from time to time during the term of this Agreement.

 

“BMT FinTech” means all proprietary software owned or licensed by BMT and made available to Bank pursuant to this Agreement and/or pursuant to a separate license agreement by and between the Parties, including, but not limited to, its mobile and web-based applications, user interface, data systems, databases, financial and banking processes, and related systems and processes used and operated by BMT in connection with its online banking system for retail and commercial Banking and financial services.

 

“Card” means a debit card or other electronic access device issued by third party financial institution to a Depositor for purposes of accessing the Depositor Account.

 

“Complaint” means an oral or written statement or inquiry from a Customer, or his or her representatives, expressing dissatisfaction about products and/or services offered by Bank and serviced by BMT, including those in conjunction with a Third-Party Provider, and regulatory correspondence, including but not limited to federal and state authorities.

 

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“Complaint Log” means a report which is prepared monthly by BMT for each calendar month listing all Complaints received by BMT during the prior calendar month and the disposition of prior Complaints during the prior calendar month. The Complaint Log shall include, without limitation, the date the Complaint was received, the channel of receipt (telephone, email, specific agency such as the FDIC or Better Business Bureau), the date the Complaint was responded to, a description of the issues raised in the Complaint, and a description of the resolution of the Complaint.

 

“Escalated Complaints” means (i) Complaints filed by, or forwarded from, any federal or state regulator; (ii) Complaints filed with any government official – federal, state or local; (iii) Complaints with specific allegations of discriminatory practices; (iv) Complaints with specific allegations suggesting the Servicer or Purchaser has engaged in an unfair, deceptive, or abusive act or practice; (v) Complaints with specific allegations of fraudulent practices, in each case, with respect to loan servicing; or (vi) Complaints alleging violations of consumer protection laws or regulations.

 

“Depositor” means a current customer of BMT who has entered into a Depositor Agreement.

 

“Depositor Account” means a personal deposit account that is held by Bank in the name or for the benefit of a Depositor pursuant to a Depositor Agreement.

 

“Depositor Agreement” means the agreement that governs the relationship among Bank, BMT and a Depositor and prescribes the terms and conditions under which the related Depositor Account is established, maintained and used, and all related disclosures provided with respect thereto.

 

“Depositor Program” means the administration and processing operation of Depositor Accounts pursuant to the Depositor Agreement.

 

“Durbin Exempt” means financial institutions in the exempt category that have been determined to have, together with their affiliates, reported assets of less than $10 billion, and therefore are exempt from the interchange fee standards under 12 CFR Part 235.

 

“FDIC” means the Federal Deposit Insurance Corporation or any successor entity.

 

“Fees” means all fees and charges generated from the use of the Depositor Accounts, including any Card usage, interchange, and miscellaneous fees.

 

“Financial Transaction(s)” means a Depositor Account transaction involving the withdrawal of funds from or the deposit of funds to a Depositor Account.

 

“Graphic Standards” means all standards, policies, and other requirements adopted by Bank from time to time with respect to use of its Marks.

 

“Issuer Network Assessments” means domestic assessments, cross-border volume fees, transaction processing fees, and other related fees, net of rebates and incentives, assessed by the payment card or ATM networks (or any similar entities) on Bank for providing transaction processing and other payment-related products and services.

 

“Joint Oversight Policies” means the policies and procedures as to be agreed to by the Parties, as may be amended from time to time.

 

“Mark” means trade names, trademarks, service marks and logos, whether or not registered.

 

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“Material Adverse Effect” means a change, effect, event, or circumstance that would have, individually or in the aggregate, a material adverse change in, as the case may be, the assets, liabilities, financial position, or results of operations, prospects, or business conditions of a Party, taken as a whole.

 

“Net Interchange Fees” means the total of all interchange revenue (net of any Issuer Network Assessments) received from payment card networks in connection with the use of Cards.

 

“Network” means Allpoint, MasterCard, VISA, Cirrus, Plus, and/or any similar electronic payment processing system over which Financial Transactions with respect to debit, credit and prepaid cards are captured, authorized, processed, and settled.

 

“Network Rules” means the laws and/or operating rules of any Network, as may be amended from time to time and provided to BMT in writing.

 

“OFAC” means the U.S. Department of Treasury’s Office of Foreign Assets Control.

 

“Regulatory Authority” means any local, state, or federal agency, office, or supervising entity, or any other authority having jurisdiction over Bank or BMT, in such a manner as to impact the operations or activity being contemplated under this Agreement.

 

“Solicitation Material” means all advertisements, brochures, applications, telemarketing scripts, point of purchase displays, packaging, television advertisements, radio advertisements, electronic web pages, electronic web links, and any other type of advertisement, marketing material, or interactive media developed, launched, or distributed for purposes of marketing or promoting a Depositor Program.

 

“Supervisory Objection” has the meaning set forth in Section. 7.2(d).

 

“Term” has the meaning set forth in Section 7.1.

 

“Higher Education” means an educational institution wherein BMT offers its student refund and other disbursement services.

 

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SECTION II

OBLIGATIONS AND COVENANTS

 

2.1 General Intent. It is the intent of the Parties to offer Bank deposit accounts to potential customers through partnerships with various Higher Education clients and select white label and private marketing relationships in conjunction with other customized products and services offered by BMT. As set forth herein, BMT, on behalf of Bank, will provide setup, processing, reporting, customer care and other administrative services including, but not limited to, customer services, with respect to those Depositor Accounts, and Bank will establish and maintain the Depositor Accounts opened by such customers.

 

2.2 Specific Obligations of BMT. BMT shall be responsible for the following obligations in accordance with Joint Oversight Policies, Network Rules, and Applicable Law.

 

(a) Contracts with Higher Education Clients. From time to time, BMT may enter into agreements with Higher Education clients to provide the services and products to them and/or their students, faculty, staff, alumni, and/or other related parties. As part of such agreements, and using Solicitation Materials approved by Bank, BMT shall make available to the Higher Education clients and/or their students, faculty, staff, alumni, and/or other related parties to the Depositor Program, including Depositor Accounts, BMT shall manage such relationships with the Higher Education clients on an ongoing basis and shall process any Depositor Accounts under the Depositor Program.

 

(b) Contracts with White Label Partners. From time to time, BMT may enter into agreements with private and public companies to provide white label banking technology platform, loan and deposit account origination and other financial products and services to the partner and/or their employees, prospects and customers. As part of such agreements, and using Solicitation Materials approved by Bank, BMT shall make available the Depositor Program, including Depositor Accounts and services, BMT shall manage such relationships with the white label partners on an ongoing basis and shall process any Depositor Accounts at the discretion of its bank partners under the Depositor Program.

 

(c) Operations of Depositor Program. BMT, directly or pursuant to contracts with third party service providers, shall provide for all necessary operations of the Depositor Program, in accordance with Schedule 2.2, including the necessary management, financial expertise, staff, and software needed to conduct the Depositor Program, excluding all Bank staff, systems, networks, utilities, software, and hardware.

 

(d) Master Account Recordkeeping. BMT will provide the appropriate reports and supporting documentation necessary for Bank to make entries to an account established by Bank for such purpose to (i) reflect the Financial Transactions to the Depositor Accounts and (ii) maintain such necessary records to establish a Depositor Account for each individual Depositor with sufficient detail as required by Applicable Law to assist in ensuring that the Depositor Accounts qualify for FDIC insurance.

 

(e) Verification of Customer Identity. BMT, consistent with policies and procedures that shall be developed by BMT shall be responsible for the collection and verification of such Depositor information as is necessary to (1) verify Depositor identity and complete appropriate Office of Foreign Assets Control validation and (ii) to satisfy the customer identification program requirements applicable to insured depository institutions found in 31 C.F.R. Chapter X. For the avoidance of doubt, Bank hereby acknowledges that BMT’s policies and procedures in place relating to the verification of customer identity as referenced in the preceding sentence are approved as of the Effective Date. Bank shall approve, in its sole discretion all such policies and procedures.

 

(f) Depositor Account Recordkeeping. BMT shall be responsible for the processing of all transactional activity in connection with the Depositor Accounts, including: (i) ACH and wire transfer transactions initiated at the direction of Depositors; (ii) deposits to Depositor Accounts (via ACH, mail, wire transfers, and direct credits from Higher Education clients (including disbursement funds from the Higher Education clients to recipients individually identified to BMT and identified by BMT to Bank)).; and (iii) coordinating and providing support for payments made from Depositor Accounts, including payment by check, debit card, and electronic payment.

 

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(g) Check Production and Card Management. BMT shall be responsible for the following:

 

i. arranging for the production of all checks and/or Cards provided to Depositors in connection with any Depositor Account, including the manufacturing, printing, and distribution of all checks and/or Cards including providing the Depositor Agreement related thereto, identifying third party financial institutions as. the Card issuer on each Card and the related Depositor Agreement, and including such other names and Marks as may be required to conform to Graphic Standards, Applicable Law, Joint Oversight Policies, and the Network Rules;

 

ii. handling and distributing, or having arranged for the handling and distributing of Cards and/or checks as necessary; and

 

iii. managing all security aspects of the Cards.

 

(h) Document Retention. Consistent with Applicable Law, Joint Oversight Policies or Network Rules, BMT shall retain on behalf of Bank such potential Depositor’s application, all supporting information and documentation, and any reports prepared therefrom, as provided by Applicable Law, the Joint Oversight Policies, and the Network Rules, and shall at all times be available to Bank in electronic form promptly upon request.

 

(i) Compliance with Law and Regulation. BMT shall develop, implement, and maintain internal controls reasonably designed to ensure regulatory compliance at all times with Applicable Law including providing Bank with applicable fraud-related information to assist Bank with its Bank Secrecy Act/Anti-Money Laundering obligations and maintaining necessary tax documentation for Depositors (as applicable), maintaining an appropriate regulatory compliance training program, and ensuring the ongoing oversight of third parties for compliance with Applicable Law to identify areas of improvement, weaknesses, and trends that may identify non-compliance with applicable laws and/or agreed upon contracts.

 

(j) Banking Services. Bank will act as a correspondent to enable BMT to provide banking services including wire processing services, ACH processing services, onboarding, fraud, check processing services, network BIN sponsorship services and ATM sponsorship in connection with the Depositor Program. BMT shall be responsible for all costs, fees and expenses incurred in connection with its responsibilities under this Agreement to obtain banking services through such third-party financial institutions.

 

(k) Marketing and Advertising. BMT shall work with the Higher Education and white label clients for marketing the Depositor Program to end users, in accordance with the terms and conditions of the client agreement. In all cases, Bank will have final authority and approval for all Solicitation Materials.

 

(l) Alternative Durbin-Exempt Banks. BMT shall use its best efforts to find alternative Durbin-Exempt banks for such Depositor Accounts as soon as practicable after the execution of this Agreement.

 

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2.3 Specific Obligations of Bank. Bank shall perform the following obligations in accordance with the Joint Oversight Policies, Network Rules, the Depositor Agreement and Applicable Law:

 

(a) Sponsorship into money movement channels. Bank will sponsor BMT into Fed, money movement, card networks and other associations necessary to enable BMT to provide services described herein to its clients and end users. If the Parties determine that it is necessary to obtain a separate routing/transit number, solely with respect to the Depositor Program, Bank shall cooperate with BMT in its efforts to transfer a routing/transit number from a third party financial institution which may include working with BMT and one or more of its existing bank partners to transfer an existing routing/transit number(s), including by entering into any required agreements to facilitate the continued use of existing routing/transit number(s) and, if necessary, obtain and maintain a separate routing/transit number in connection with the Depositor Program.

 

(b) Deposit Insurance. Bank shall ensure that its FDIC deposit insurance remains in full force and effect so that the Depositor Account of each Depositor qualifies for FDIC deposit insurance, subject to FDIC rules and regulations, in the Depositor’s individual right and capacity, either on a pass-through or direct basis. Bank shall bear all costs associated with providing this insurance.

 

(c) Availability of Checks. Bank shall permit BMT to make payable through in connection with certain Depositor Accounts to be made available to each Depositor through BMT, with which Depositors may draw against their Depositor Accounts, and Bank shall permit these payable through check transactions when properly drawn on the Depositor Accounts based on funds available in the Depositor Accounts, all in accordance with any Depositor Agreement.

 

(d) Availability of Cards. Bank shall sponsor BMT in accordance with Card Network rules to (i) permit the Depositor Accounts to be linked to Cards issued by a third party financial institution available to Depositors serviced by BMT allowing Depositors to execute Card transactions based on funds available in the Depositor Accounts in compliance with applicable Network Rules and (ii) permit the Card transactions made by Depositors based on funds available in the Depositor Accounts and applicable Network Rules.

 

(e) ATM Operations. BMT is solely responsible for managing an ATM network and will ensure that network is serviced, maintained, settled and monitored in accordance industry standard practices for ATMs. Notwithstanding the foregoing, Bank shall provide the cash on deposit at appropriate levels for designated BMT ATMs at no cost to BMT.

 

(f) Interest Expense Banking Services. Bank will bear the full costs of any interest paid to Depositors in the Depositor Program. BMT shall administrate the calculation and crediting of funds to the accounts on behalf of the bank

 

2.4 Compliance Obligations. Each Party shall perform its respective obligations under this Agreement pursuant to Applicable Law. Each Party shall possess and maintain at all times all licenses, permits, approvals, and registrations required by Applicable Law and the Joint Oversight Policies to perform its obligations pursuant to this Agreement. Each Party, at its own expense, shall be responsible for obtaining any and all regulatory approvals related to the transactions contemplated herein, and shall use its respective best efforts to obtain all such regulatory approvals and cooperate with the other Party to facilitate the procurement of all such regulatory approvals.

 

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2.5 Handling of Complaints. BMT shall notify Bank of any and all complaints related to a Depositor Account received in connection with the Depositor Program from a Regulatory Authority, and shall promptly respond to and resolve such complaints as instructed by Bank. In addition, BMT shall cooperate with Bank in assessing and evaluating the frequency, nature, or underlying causes for any consumer complaints, and preventing the recurrence thereof. Each notice regarding a Depositor or third-party complaint shall include the name and address of the complainant, a brief summary of the complaint, the date upon which such complaint or inquiry was received, and BMT’s proposed resolution thereof.

 

(a) Tracking Complaints. BMT shall track Complaints related to the bank. The tracking requirements of this clause (a) shall apply to all Complaints, whether received orally or in writing, including those delivered by email or other electronic media, and shall include a description of the nature of the Complaint and BMT’s response thereto. BMT shall provide Bank with a copy of the Complaint Log for each calendar month on or before the tenth (10th) day of the following calendar month. Escalated Complaints shall be reported to the Bank within two (2) Business Days of BMT being notified of such Escalated Complaint. If Bank is named in the Escalated Complaint, BMT shall notify Bank promptly after receiving such Escalated Complaint and BMT will identify in the Complaint Log which Escalated Complaints specifically name Bank. BMT shall maintain an internal procedure to ensure that all Complaints are tracked and responded to appropriately in accordance with generally accepted practices related to the deposit processing services, and shall provide Bank with evidence thereof upon request.

 

(b) BMT Complaint Responses. With respect to each Escalated Complaint in which Bank is named, BMT shall forward each proposed response to Bank for review prior to sending the response to the Person that made the Escalated Complaint. Bank shall have three (3) Business Days from receipt of BMT’s proposed response to mutually agree upon each such proposed response with the Bank. If Bank and BMT cannot mutually agree upon a response within three (3) Business Days, then BMT may send the response to such Complaint in such form, and when, it deems necessary or appropriate. The final written response to any Complaints shall be maintained in such a manner that Complaints can be promptly identified by BMT. Without limiting any other obligations of BMT to provide responses to Complaints as provided herein, upon Bank’s request, BMT shall provide Bank with electronic copies of all final written responses to Complaints.

 

(c) Recording and Monitoring of Servicing-Related Telephone Calls. With respect to the recording and monitoring of servicing-related telephone calls with consumers, BMT shall:

 

i) retain recordings of such telephone calls for a period of at least one (1) year from the date on which such telephone calls were recorded; and

 

(ii) permit Bank, upon request, to listen to a sampling of such recorded telephone calls or provide unredacted recorded calls to the bank upon request.

 

(d) Personnel Training. BMT shall, at all times during the term of this Agreement, ensure that all personnel involved in the servicing are appropriately and currently trained in all aspects of their respective duties.

 

● During the course of Bank’s review, Bank may request additional documentation from BMT. This information is to be gathered and provided upon request within established timeframes or within timeframes to satisfy regulatory requests.

 

● If appropriate, Bank may request that BMT issue fee refunds and an apology letter/email to be sent to complaining consumer. All copies of documentation for the refund and the apology letter/email should be saved with the relevant complaint folder.

 

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2.6 Approvals of Solicitation Materials. All Solicitation Materials shall be submitted to Bank in advance for Bank’s prior written approval (which approval (i) may be granted or withheld in Bank’s sole discretion, and (ii) shall be provided within two (2) business days) and, as necessary, the approval of any third parties. BMT shall not release, launch, or distribute any Solicitation Materials in any form without having first obtained confirmation Bank approvals. Notwithstanding the foregoing, the Parties agree that non-material changes to the approved Solicitation Materials including, but not limited to, the name of a University, the logo of such entity and related items shall not require the approval of Bank. The content of all Depositor Agreements, shall be subject to Bank’s prior written approval (which approval (i) may be granted or withheld in Bank’s sole discretion, (ii) shall be provided within two (2) business days and (iii) may not be unreasonably withheld, conditioned or delayed) and the approval of any applicable third parties to the extent expressly required. Notwithstanding Bank’s approval of the form or content of a Depositor Agreement, Bank shall have the right, in its sole and absolute discretion, from time to time, with reasonable advance notice, if possible, to require alterations to or amendments of, or provide a substitute for, the Depositor Agreement (each a “Revision” and, collectively, “Revisions”) thereof in the event that (1) Bank reasonably determines that Applicable Law, Joint Oversight Policies, or Network Rules require such Revision, (ii) either Party receives any written demand or order from a court, Regulatory Authority, or a Network, mandating that such Revisions must be implemented, or (iii) either Party receives or becomes aware of an actual or threatened legal claim based upon or in any way related to the affected portion of the Depositor Program. Bank shall notify BMT in writing of any required Revisions, and, unless otherwise directed by Bank, BMT shall within the timeframe set forth by Applicable Law (i) incorporate said Revisions into such Depositor Agreement and/or Solicitation Materials as may be distributed thereafter, and (ii) distribute replacement Depositor Agreements incorporating the Revisions to all Depositors who had received prior versions of the Depositor Agreement. Bank hereby acknowledges that it approves the current version of the Deposit Agreement.

 

2.7 Access to BMT Reports. BMT shall provide Bank with access to all reports, and such services as Bank requests, to facilitate settlements, balance and reconcile Depositor Accounts, monitor for fraudulent Financial Transactions, comply with Bank’s Bank Secrecy Act and OFAC obligations, and otherwise monitor regulatory compliance, BMT shall keep accurate, complete, and up to date records on behalf of Bank of (1) the identity of each Depositor and the steps taken to verify such identity; (ii) all charges, Financial Transactions, and fees that have been made or charged Depositor, and (iii) such other information as may from time to time be required by Bank, the Joint Oversight Policies, or Applicable Law (collectively, the “Required Records”), BMT shall retain all Required Records for a minimum time period as mandated by Applicable Law, Joint Oversight Policies or the Network Rules. All Required Records shall be accurate, and to the extent presenting financial information, kept in a manner that is consistent with accounting standards and designed to fairly present the information set forth therein. BMT shall provide Bank access to any and all Depositor Program related records, including, but not limited to, Required Records that Bank reasonably requests in connection with compliance with Bank’s obligations under Applicable Law and/or Joint Oversight Policies, which policies shall substantially be consistent with Applicable Law.

 

2.8 Right to Audit. Bank shall have the right, at its own expense, to conduct periodic audits of BMT. Bank may select an independent third-party auditor to conduct such audits, Such audits, in Bank’s and/or the auditor’s discretion, may include an on-site inspection of the respective facilities and a review of documents, contracts, hardware and software systems, security systems, policies, procedures, and books and records of BMT and such third parties. Such audits may be conducted during business days upon reasonable advance notice. BMT agrees to cooperate with such audit and provide copies or access to such documents, information, and BMT personnel as reasonably necessary or helpful for the auditor to conduct such audit. In exercising its rights under this paragraph, Bank and its representatives shall take reasonable steps to avoid disruption of the business of the audited party. BMT shall provide to Bank such information as Bank may reasonably request regarding BMT and the Depositor Program, for purposes of performing a periodic due diligence and/or compliance review as permitted by Applicable Law and the Joint Oversight Policies.

 

2.9 Examination by Regulatory Authorities. BMT shall permit any Regulatory Authority with supervisory authority over Bank to inspect, audit, and examine the facilities, records, and personnel relating to the Depositor Program to ensure compliance with Applicable Law at any time during normal business hours upon reasonable notice. BMT shall permit any such Regulatory Authority to make abstracts of any such records directly pertaining to the subject matter of this Agreement during such an inspection, audit, or examination.

 

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2.10 Other Agreements Not Precluded. This Agreement shall not preclude BMT from entering into similar agreements to provide deposit processing services to other banks or financial institutions, nor shall it preclude Bank from providing products or services to providers of other depositor programs generally through Bank’s own marketing efforts or through the marketing efforts of other third parties. BMT shall have the right to offer additional products and services to Depositors in BMT’s sole discretion. Bank shall not solicit BMT’s customers for any reason unless such customers were customers of Bank prior to becoming customers of BMT, Notwithstanding the foregoing, the Parties acknowledge that this Section shall not preclude general solicitations by Bank such as mass mailing, media, arid otherwise not specifically targeted at Depositors.

 

2.11 Joint Program Management Committee. No later than thirty (30) days after the Effective Date, each Party shall designate individuals to serve on a standing joint program management committee (“Joint Program Management Committee”) which shall meet (including through participation by telephone or other electronic means) at least quarterly during the time this Agreement is in effect, at such times and places as the members of the Joint Program Management Committee shall agree. The initial members of the Joint Program Management Committee shall be designated in writing by each Party, which may change its designated individuals for the Joint Program Management Committee at, any time and from time to time. The purpose of the Joint Program Management Committee will be to review and discuss the effectiveness of the Depositor Program as a whole and the policies and procedures implemented to ensure compliance with this Agreement, Applicable Law, Joint Oversight Policies, and the Network Rules, All members of the Joint Program Management Committee shall exercise reasonable diligence and shall cooperate fully with other members of the Joint Program Management Committee in carrying out the purposes and functions of such committee. Each Party shall pay for its own expenses incurred with respect to its participation in the Joint Program Management Committee.

 

2.12 Joint Oversight Policies and Reporting. The Parties shall use best efforts and work together in good faith to reach an agreement on the terms of the Joint Oversight Policies and BM Reporting Requirements on, or prior to, sixty (60) days after the Effective Date, unless otherwise mutually agreed upon by the Parties.

 

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SECTION III

COMPENSATION

 

3.1 Bank Compensation. As its sole source of compensation for performance of all obligations pursuant to this Agreement, Bank shall retain any and all revenue it may generate from the investment of the funds held in the Depositor Accounts. Ancillary services required for the Depositor Program shall be included services and not generate additional compensation for Bank.

 

3.2 BMT Compensation. As consideration for the processing services and other services BMT is providing under this Agreement, Bank shall pay to BMT the fees as set forth on Schedule 3.2. Fees shall include, without limitation, Servicing Fees and Interchange Fees as defined in Schedule 3.2. In addition, BMT will have the right to retain all revenue generated by or from the Depositor Accounts, including, but not limited to, fees and all other miscellaneous revenues. BMT shall also retain all fees, and charges generated by its ATMs and from its payment processing services.

 

SECTION IV

REPRESENTATIONS OF BANK

 

Bank represents and warrants as follows:

 

4.1 Organization, Good-Standing and Conduct of Business. Bank is a banking corporation, duly organized, validly existing and in good standing under the laws of Pennsylvania, and has full power and authority and all necessary governmental and regulatory authorization to own its properties and assets and to carry on its business as it is presently being conducted.

 

4.2 Corporate Authority. The execution, delivery, and performance of this Agreement have been duly authorized. No further corporate acts or proceedings on the part of Bank are required or necessary to authorize this Agreement.

 

4.3 Binding Effect. When executed, this Agreement will constitute a valid and legally binding obligation of Bank, enforceable against Bank in accordance with its terms, subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium, or other similar laws now or hereafter in effect relating to rights of creditors of FDIC-insured institutions or the relief of debtors generally; (ii) laws relating to the safety and soundness of depository institutions; and (iii) general principles of equity.

 

4.4 Non-Contravention and Defaults; No Liens. Neither the execution or delivery of this Agreement, nor the fulfillment of, or compliance with, the terms and provisions hereof, will (i) result in a material breach of the terms, conditions, or provisions of, or constitute a default under, or result in a violation of, termination of, or acceleration of the performance provided by the terms of, any agreement to which Bank is a party or by which it may be bound; (ii) violate any provision of any law, rule or regulation; or (iii) violate any provisions of Bank’s Articles of Incorporation or Bylaws,

 

4.5 Necessary Approvals. No consent, approval, authorization, registration, or filing (excluding any such filings with the U.S. Securities and Exchange Commission) with or by any governmental authority, foreign or domestic, is required on the part of Bank in connection with the execution and delivery of this Agreement or the consummation by Bank of the transactions contemplated hereby.

 

4.6 Liabilities and Litigation. There are no claims, actions, suits or proceedings pending or, to Bank’s knowledge; threatened against Bank, at law or in equity, before or by any Federal, state, municipal, administrative or other court, governmental department, commission, board, or agency, an adverse determination of which could have a Material Adverse Effect on the business or operations of Bank, and Bank knows of no basis for any of the foregoing, There is no order, writ, injunction, or decree of any court, domestic or foreign, or any Federal or state agency affecting Bank or to which Bank is subject.

 

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4.7 Disclosure. Neither Bank nor any principal of Bank has been subject to any administrative or enforcement proceedings commenced by any Regulatory Authority, or any restraining order, decree, injunction, or judgment in any proceeding or lawsuit, alleging fraud or deceptive practice on the part of Bank or any principal thereof For purposes of Section 4.7, the word “principal” shall include any executive officer or director of Bank.

 

4.8 FDIC Insurance. As of the Effective Date and during the term of this Agreement, Bank is FDIC-insured to the maximum extent permitted under Applicable Law.

 

4.9 Well Capitalized. As of the Effective Date and during the term of this Agreement, Bank is designated “Well Capitalized” under the Prompt Corrective Action provisions of the Federal Deposit Insurance Act and all regulations and guidelines with respect thereto.

 

4.10 Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, BANK DISCLAIMS ALL OTHER WARRANTIES, CONDITIONS, AND REPRESENTATIONS OF ANY KIND, WHETHER EXPRESSED, IMPLIED, STATUTORY, OR OTHERWISE, INCLUDING THOSE RELATED TO MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON INFRINGEMENT AND THOSE ARISING OUT OF COURSE OF DEALING, USAGE, OR TRADE.

 

SECTION V

REPRESENTATIONS OF BMT

 

BMT represents and warrants as follows as of the date hereof;

 

5.1 Organization, Good-Standing and Conduct of Business. BMT is a corporation, duly organized, validly existing and in good standing under the laws of the State of Delaware, and has full power and authority and all necessary governmental and regulatory authorization to own its properties and assets and to carry on its business as it is presently being conducted, except where lacking authority or authorization would not have a Material Adverse Effect on BMT.

 

5.2 Corporate Authority. The execution, delivery, and performance of this Agreement have been duly authorized. No further corporate acts or proceedings on the part of BMT are required or necessary to authorize this Agreement.

 

5.3 Binding Effect. When executed, this Agreement will constitute a valid and legally binding obligation of BMT, enforceable against BMT in accordance with its terms, subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium, or other similar laws now or hereafter in effect relating to rights of creditors or the relief of debtors generally and (ii) general principles of equity.

 

5.4 Non-Contravention and Defaults; No Liens. Neither the execution or delivery of this Agreement, nor the fulfillment of, or compliance with, the terms and provisions hereof, will (i) result in a material breach of the terms, conditions, or provisions of, or constitute a default under, or result in a violation of, termination of or acceleration of the performance provided by the terms of, any agreement to which BMT is a party or by which it may be bound, (ii) violate any provision of any law, rule or regulation, (iii) result in the creation or imposition of any lien, charge, restriction, security interest or encumbrance of any nature whatsoever on any asset of BMT, or (iv) violate any provisions of BMT’s Certificate of Incorporation or Bylaws.

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5.5 Necessary Approvals. No consent, approval, authorization, registration, or filing (excluding any such filings with the U.S. Securities and Exchange Commission) with or by any governmental authority, foreign or domestic, is required on the part of BMT in connection with the execution and delivery of this Agreement or the consummation by BMT of the transactions contemplated hereby

 

5.6 Liabilities and Litigation. Except as disclosed by BMT in writing to Bank, there are no claims, actions, suits, or proceedings pending or, to BMT’s knowledge, threatened against BMT, at law or in equity, before or by any Federal, state, municipal, administrative, or other court, governmental department, commission, board, or agency, an adverse determination of which could have a Material Adverse Effect on the business or operations of BMT (including its ultimate ownership of the business), and BMT knows of no basis for any of the foregoing, There is no order, writ, injunction, or decree of any court, domestic or foreign, or any Federal or state agency affecting BMT or to which BMT is subject.

 

5.7 Disclosure. Except as disclosed by BMT in writing to Bank, neither BMT nor any principal of BMT has been subject to any administrative or enforcement proceedings commenced by any Regulatory Authority, or any restraining order, decree, injunction, or judgment in any proceeding or lawsuit, alleging fraud or deceptive practice on the part of BMT or any principal thereof. For purposes of Section 5.7, the word “principal” shall include any executive officer or director of BMT.

 

5.8 Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, BMT DISCLAIMS ALL OTHER. WARRANTIES, CONDITIONS, AND REPRESENTATIONS OF ANY KIND, WHETHER EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, INCLUDING THOSE RELATED TO MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT AND THOSE ARISING OUT OF COURSE OF DEALING, USAGE, OR TRADE.

 

SECTION VI

CONFIDENTIALITY; DATA PROTECTION; INTELLECTUAL PROPERTY

 

6.1 General. It is expected that the Parties will disclose to each other certain information, which may be considered confidential or proprietary (“Confidential Information”), and each Party recognizes the value and importance of the protection of the other’s Confidential Information.

 

6.2 Confidential Information. Confidential Information owned solely by one Party and disclosed to the other Party shall remain solely the property of the disclosing Party, and its confidentiality shall be maintained and protected by the other Party with at least the same effort used to protect such other Party’s own confidential information of a similar nature. Except to the extent required by this Agreement, each Party agrees not to duplicate in any manner the other’s Confidential Information or to disclose it to any third party or to any of their employees not having a need to know for purposes of this Agreement, Each Party further agrees not to use the other’s Confidential Information for any purpose other than the implementation of this Agreement. This confidentiality provision extends to all information (whether oral, written, electronic, or otherwise) provided by either Party (the “Disclosing Party”) to the other Party (the “Receiving Party”) pursuant hereto. Confidential Information includes, without limitation, software, data, prototypes, design plans, drawings, financial information, or other business and/or technical information, whether disclosed before or after the date of this Agreement. In addition, without limitation, and any provision to the contrary in this Agreement notwithstanding, the names of, and any and all information regarding the Depositor Accounts or other accounts belonging to, Depositors and potential Depositors is, and for all purposes shall be deemed to be, Confidential Information belonging to both Parties as permitted by Applicable Law, subject to Bank’s rights to use such information according to the terms of this Agreement. Except as otherwise provided herein, Confidential Information shall not include (i) information that is now in the public domain, or that later enters the public domain, through no action of the Receiving Party in violation of this Agreement or of any third party in violation of a duty owed to the Disclosing Party, (ii) information that the Receiving Party can demonstrate was already in its possession at the time of its disclosure hereunder, and that was not acquired, directly or indirectly, from the Disclosing Party on a confidential basis, (iii) information independently developed by the Receiving Party without reference to, or the use of, any Confidential Information, or (iv) information that is lawfully received from sources other than the Disclosing Party under circumstances not involving a breach of any confidentiality obligation. The Parties hereby acknowledge that BMT may elect to request confidential treatment of certain provisions of this Agreement from the Securities and Exchange Commission including, but not limited to, the pricing related provisions and exhibits as permitted by law and that the Parties will cooperate in order to effect such request.


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Each Receiving Party shall hold Information received by it in the strictest of confidence and shall not disclose it to any person or entity, other than the Receiving Party’s officers, directors, employees, third party service providers, agents, consultants and legal advisors (collectively, “Representatives”), without the Disclosing Party’s prior written consent, the Receiving Party shall share Confidential Information received hereunder only with those of its Representatives as are reasonably necessary to enable the Receiving Party to accomplish the purposes of this Agreement, and then only after advising such Representatives of the requirements of this Section and obtaining their agreement to abide herewith as if they were original parties hereto. The Receiving Party shall be responsible for any breach of this Agreement by its Representatives.

 

6.3 Ownership of Confidential Information. All Confidential Information and all documents, diskettes, tapes, procedural manuals, guides, specifications, plans, drawings, designs and similar materials, lists of present, past, or prospective customers, BMT proposals, invitations to submit proposals, price lists and data relating to the pricing of products and services, records, notebooks, and all other materials containing Confidential Information or information about concepts or ideas developed by or for a Disclosing Party (including all copies and reproductions thereof) that come into a Receiving Party’s possession or control, whether prepared by the Disclosing Party or others: (I) are the property of the Disclosing Party, and (ii) shall not be used by the Receiving Party in any way other than in connection with fulfilling the purposes of this Agreement.

 

6.4 Return of Confidential Information. Upon the written request of a Disclosing Party, which may be made at any time or from time to time, a Receiving Party shall, and/or shall cause its Representatives to, promptly return or (at the Receiving Party’s election) destroy all Confidential Information provided by the Disclosing Party. The Receiving Party is allowed to retain a copy of such information for such period of time necessary to comply with its record retention policy, Applicable Law or Network Rules, In such cases, the obligation to treat such information as confidential shall remain until such information may be destroyed in accordance with the applicable policy or rule. In the event of such written request by a Disclosing Party, all documents, analyses, studies, or other materials prepared by the Receiving Party or its Representatives that contain or reflect Confidential Information shall be forwarded to the Disclosing Party and no copies thereof shall be retained except as may otherwise be required to be retained pursuant to Applicable Law. Notwithstanding the foregoing, the Parties agree that (i) BMT owns and control any and all documents, Confidential Information, and similar non-bank related information obtained through its relationships with Higher Education clients as well as the BMT FinTech and shall not be required to return or destroy such information and (ii) both Parties shall have the right to retain a copy of transaction history documents of the Depositors.

 

6.5 Required Disclosures. Should a Receiving Party learn that it or its Representatives may, or will, be legally compelled to disclose Confidential Information (whether by interrogatories, subpoenas, civil investigative demands, or otherwise) provided by a Disclosing Party hereunder, or should a Receiving Party or its Representatives be requested to disclose such Confidential Information by a governmental authority or agency, the Receiving Party shall promptly notify the Disclosing Party to the extent such notice is not prohibited by Applicable Law. In addition, the Receiving Party shall inform the Disclosing Party of any developments with respect to such compulsion or request. When time is of the essence, the Receiving Party may provide notice or updates orally, but must follow these communications with written summaries. The Receiving Party shall reasonably cooperate with the Disclosing Party to enable the Disclosing Party to obtain a protective order or other similar relief. If, in the opinion of legal counsel and in the absence of a protective order or waiver by the Disclosing Party of compliance with this Section VI, the Receiving Party and/or its Representatives are legally compelled to disclose Confidential Information, the Receiving Party and/or such Representatives shall disclose only so much of the Confidential Information as is legally required. In any such event, the Receiving Party shall use its good faith efforts to ensure that any Confidential Information so disclosed is accorded confidential treatment to the greatest extent possible. Notwithstanding any provision to the contrary, each Party agrees and acknowledges that the other Party is permitted to announce the execution of this Agreement and file this Agreement with the U.S. Securities and Exchange Commission along with any subsequent amendments to this Agreement as required by Applicable Law.

 

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6.6 Injunctive Relief. Each Party acknowledges that remedies at law may be inadequate to protect the other against actual or threatened breach of the provisions of this Section. Without prejudice to any other rights and remedies available to a Party hereunder, each Receiving Party hereby consents to the granting of injunctive relief in the Disclosing Party’s favor, without proof of actual damages, in. the event of an actual or threatened breach hereof with respect to Confidential Information provided by such Disclosing Party.

 

6.7 Consumer Information and Program Security. Each Party acknowledges that Applicable Law, including but not limited to the Gramm-Leach Bliley Act of 1999, as amended, and the regulations promulgated thereunder (the Act and the regulations, collectively, the “GLB Act”) impose certain obligations on financial institutions with respect to the confidentiality of customer data (collectively, ‘Protected ‘Information”). Regardless of whether BMT and/or its Representatives are otherwise subject to the GLB Act, Bank and BMT and each of their respective Representatives shall fully comply with all requirements of the GLB Act or applicable state laws with respect to any Protected Information received or accessed in connection with the Program, has implemented, and shall continue to implement, support, and maintain, commercially reasonable security measures to secure against unauthorized access and/or damage to Depositor information and other Protected Information (collectively, the “Security Measures”).

 

6.8 Written Policies. BMT shall provide Bank with copies of written policies of BMT regarding the safeguarding the security of Protected Information promptly upon Bank’s request, In addition to any other Security Measure, BMT and Bank shall maintain an Identity Theft Prevention Program (the “IDTP”) designed to detect, prevent, and mitigate identity theft in connection with the Depositor Program. The IDTP shall be designed to comply with the provisions of Applicable Law and the Joint Oversight Policies, including, but not limited to, the federal banking agencies’ Interagency Guidelines on Identity Theft Detection, Prevention, and Mitigation, 12 C.F.R. Part 30, App. B.

 

6.9 Breach. Subject to the terms below regarding breaches with respect to Protected Information, BMT and Bank agree to promptly notify the other Party by telephone as soon as possible after verification in the event either of them becomes aware of any intrusion, security breach, unauthorized access to, or disclosure or use of any Protected Information that materially affects the security and integrity of such Protected Information and promptly inform the affected Party of the nature of the security breach, material incursion, or intrusion, what Protected Information has been or may be compromised, and the extent, if any, that such Protected Information has been or may be compromised. In such a case, BMT or Bank, as applicable, will provide an appropriate response in consultation with the other Party, which may include notification of Depositors and/or law enforcement. BMT or Bank, as applicable, shall keep the other Party informed of the corrective measures taken and the time for completing such corrective measures:

 

6.10 Disaster Recovery. Each Party shall prepare and maintain appropriate disaster recovery, business resumption, and contingency plans in compliance with Applicable Law, and reasonably acceptable to the other Party. Such plans shall be sufficient to enable the Party to promptly resume the performance of its obligations hereunder in the event of a natural disaster, destruction of such Party’s facilities or operations, utility or communication failures, or similar interruptions of operations, or of any necessary third party, Each Party shall make available to the other information related to its disaster recovery, business resumption and contingency plans, as well as making available any material changes thereto. Each Party shall regularly test disaster recovery, business resumption, and contingency plans as it deems reasonably appropriate and prudent in light of the nature and scope of the respective Party’s activities and operations and its obligations hereunder. Such testing shall be conducted no less frequently than once per calendar year, and each Party shall promptly provide the other Party with the results thereof upon request,

 

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6.11 Intellectual Property Ownership and Licenses.

 

(a) Except for the licenses and other rights set forth in this Agreement or set forth in a separate software license agreement by and between the Parties, each Party retains all right, title, and interest in and to the intellectual property rights owned by it, and neither Party is granted any right, title, or interest in or to the other Party’s intellectual property rights.

 

(b) In connection with the Depositor Program, either Party (the “Licensor”) may grant the other (the “Licensee”) a non-exclusive, limited, royalty free license to use and reproduce certain Marks owned by the Licensor to the extent necessary to enable the Licensee to perform its obligations in accordance with this Agreement. The Licensee shall only use such Marks (i) in a manner that will not dilute the value of such Mark, and (ii) in strict compliance with Applicable Laws, Joint Oversight Policies, Network Rules, and this Agreement. Any license granted hereunder shall be subject to any applicable usage and style guides or limitations as from time to time provided by the Licensor. Except as specifically set forth in this Subsection, no right, title, license, or interest in any Marks shall be granted to the Licensee or shall be deemed to have been acquired by the Licensee by virtue of this Agreement. Prior to using a Mark licensed hereunder, the Licensee shall provide written notice to the Licensor (a “Use Notice”) setting forth exemplars of the intended design and a description of the intended use. Within five (5) calendar days of receipt of a Use Notice, Licensor shall either approve the design and allow use, or identify the reason for withholding its approval. In the event that use is not approved, the Parties shall cooperate to find an acceptable design and/or use. Licensee may not sublicense any use of the Marks of Licensor without the prior written consent of Licensor in each instance, Any use of the Marks by Licensee (or any permitted sub-licensee) and any goodwill associated therewith shall inure to the benefit of Licensor.

 

SECTION VII

TERM AND TERMINATION

 

7.1 Term. This Agreement shall be in full force and effect beginning on the Effective Date and shall continue in effect until December 31, 2022. After December 31, 2022 this Agreement shall renew automatically for additional three (3) year terms unless either Party gives written notice of non-renewal 180 days prior to the expiration of the then-current term; provided, however that this Agreement may be terminated prior to the end of the initial term or any such renewal term as set forth in Section 7.2 (“Term”).

 

7.2 Termination. This Agreement may be terminated prior to the end of a Term under the following circumstances:

 

(a) at any time upon the written agreement of the Parties, specifying a mutually agreed upon termination date;

 

(b) by either Party upon the material breach by the other Party of any covenant or provision required to be performed by it hereunder, if (i) a plan to cure such breach is not provided by the breaching Party to the nonbreaching Party within thirty (30) days after receipt of written notice of such a breach from the nonbreaching Party; (ii) such plan is provided by the breaching Party, but the breach is not thereafter cured in accordance with such plan within sixty (60) additional days following the submission of the plan to the nonbreaching Party; and (iii) in either case, following the expiration of the initial thirty (30) day period if (i) applies, or following the expiration of the additional sixty (60) day period if (ii) applies, the nonbreaching Party shall have elected to terminate this Agreement by sending to the Party in breach a written notice of termination, which notice shall specify the date upon which the termination shall take effect;

 

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(c) by either Party in, the event of a Supervisory Objection (as defined below) that, after going through the process described below, in either Party’s good faith judgment requires such Party to terminate its obligations under this Agreement, such Party may terminate this Agreement upon sixty (60) days written notice to the other Party or such shorter notice as may be required by a Regulatory Authority; provided, however, that in the event either Party becomes aware of a Supervisory Objection, such Party shall, as soon as reasonably practicable and prior to any termination by it of this Agreement, (i) provide the other Party, to the extent permitted by Applicable Law, with a written certification from an officer of the Party summarizing such Supervisory Objection and (ii) with the reasonable cooperation of such other Party, use its reasonable best efforts to respond to and challenge any such Supervisory Objection, including, if necessary, proposing and implementing mutually agreed upon modifications to the Depositor Program that will satisfy the Regulatory Authority. If the Parties cannot address the Regulatory Authority’s concerns to its satisfaction or the expenses associated in connection with implementing modifications necessary to satisfy the Regulatory Authority will result in extreme economic hardship to either Party, this Agreement may be terminated in accordance with the foregoing. As used herein, “Supervisory Objection” means (i) an objection raised by an employee of a Regulatory Authority having the designation of examiner-in-charge or higher and having supervisory authority over a Party that expresses the Regulatory Authority’s opinion, in writing, that one or more provisions of this Agreement or the Depositor Program constitutes a material violation of Applicable Law, is unsafe or unsound, or is otherwise unfair, deceptive, or abusive, (ii) any cease-and-desist or other similar formal order of a Regulatory Authority or (iii) changes in the written treatment of Applicable Law by a Regulatory Authority;

 

(d) by BMT, upon 90 days’ written notice, (i) if it obtains approvals to open or acquire a financial institution and desires to transfer Depositor Accounts to such institution, or (ii) if BMT experiences a change of control, in which 50% or more of its capital stock changes ownership.

 

7.3 Effect of Termination or Expiration. In the event of termination or expiration of this Agreement by any Party:

 

(a) Any amounts due and owing from one Party to the other shall be promptly paid in full; and

 

(b) Sections I, III (to the extent payment obligations remain outstanding), IV, V, VI, 7.3, XVIII, IX, X, XI and XII shall survive such termination and provided further, that any termination hereof shall not preclude any Party hereto from recovering any legal or equitable damages or relief to which it is entitled.

 

SECTION VIII

TRANSFER OF DEPOSITOR ACCOUNTS

 

8.1 Transfer of Deposits. Upon the date of termination or expiration of this Agreement as provided in Section 7.1 or 7.2 of this Agreement or upon 180 days’ written request by BMT, Bank shall transfer the Depositor Accounts to an institution designated by BMT (the “Transfer”), subject to the requirements of Applicable Law, the Depositor Agreement and any other applicable requirements. Any required approvals shall be obtained as soon as practicable following the date notice of termination is given; provided, however, notwithstanding anything in this Agreement to the contrary, Bank’s obligation to maintain the Depositor Accounts as provided in this Agreement shall not terminate until any necessary approvals have been obtained. As part of the Transfer, Bank shall, to the extent permitted or considered necessary or appropriate, transfer any BINs, routing numbers and other related identifiers used in connection with the Depositor Accounts, and deliver any and all applicable information, account opening contracts and the like. The Parties shall cooperate with each other on the issuance of necessary notices to Depositors and on all other matters necessary or appropriate to a legal and efficient Transfer. Bank shall use best efforts to assist with the Transfer. Until the Transfer is complete, Bank shall continue to provide all services under this Agreement if requested to do so by BMT, unless otherwise directed by a Regulatory Authority.

 

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8.2 Closing Deliveries and Documents. Upon the consummation of the Transfer, the Parties shall deliver to each other such documents as are typical for such a transfer, including contracts and officer’s certificates, appropriate adjustments for returned and uncollected items shall be made, as appropriate, on a post-closing basis.

 

8.3 Certain Transfer Matters. Upon the Transfer, BMT or its designee shall be responsible for completing Forms 1099 and other tax reporting forms, if applicable, for Depositors who were set up in connection with the Depositor Program, and other similar customer-related matters.

 

SECTION IX
INSURANCE

 

9.1 General Liability Coverage. BMT shall, at its sole expense, obtain and maintain throughout the Term, policies of commercial general liability insurance which may include umbrella insurance, including contractual liability, having such terms and such limits as are reasonably required by Bank from time to time, but in any event an aggregate limit of not less than Ten Million Dollars ($10,000,000), and a per occurrence limit of not less than Ten Million Dollars ($10,000,000).

 

9.2 Policy Requirements. Each insurance policy required of BMT as set forth in 9.1 above shall (i) name Bank as an additional insured, (ii) by its terms, be considered primary and noncontributory with respect to any other insurance carried by Bank, and (iii) be issued by an insurer having an A.M. Best’s Key Rating Guide rating of A-IX or better. All insurance limits required hereunder may be met through a combination of primary and umbrella/excess policies, BMT agrees to give Bank thirty (30) days’ prior written notice that such policy has been canceled or materially changed.

 

9.3 No Limitation of Liability. Neither the issuance of any insurance policy required hereunder, nor the minimum levels of insurance coverage required herein, shall serve to limit any liability otherwise accruing to BMT hereunder or in connection with the Depositor Program.

 

SECTION X

INDEMNIFICATION

 

10.1 Indemnification by Bank. Bank shall indemnify and defend BMT and its parent, subsidiaries and affiliates, and its and their respective officers, directors, employees, and permitted assigns, against any direct losses or expenses arising from any legal action, claim, demand, or proceedings brought against any of them as a result of (a) any act of gross negligence, willful misconduct, or intentional tort on the part of Bank or its agents, officers, or employees; (b) any alleged or actual material breach by Bank of this Agreement; or (c) the authorized access and use by BMT of any Marks of Bank provided, however, Bank shall not be liable for any loss, claim, damage, or liability with respect to which BMT is obligated to indemnify Bank pursuant to Section 10.2.

 

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10.2 Indemnification by BMT. Excluding those situations in which Bank is obligated to indemnify and defend BMT under the provisions of Subsection 10.1, BMT shall indemnify and defend Bank and its parent, subsidiaries and affiliates, and its and their respective officers, directors, employees, and permitted assigns, against any losses or expenses, direct, including regulatory claims and fines, arising from (a) the gross negligence, willful misconduct, or intentional tort on the part of BMT or its agents, officers, or employees; or (b) any alleged or actual material breach of this Agreement.

 

10.3 Indemnification Procedure. If either Party (the “Indemnified Party”) becomes aware of any matter which may give rise to a claim for indemnification (“Indemnification Claim”) against the other Party (the “Indemnifying Party”), the Indemnified Party shall promptly notify the Indemnifying Party in writing; provided, however, that no delay on the part of the Indemnified Party in notifying the Indemnifying Party shall relieve the Indemnifying Party from any obligation hereunder unless (and then solely to the extent) the Indemnifying Party is materially prejudiced thereby. The Indemnifying Party will have the right to assume the defense of the third-party claim with counsel reasonably satisfactory to the Indemnified Party to represent the Indemnified Party in such proceeding, and shall pay the fees and disbursements of such counsel related to such proceeding, so long as (i) the Indemnifying Party notifies the Indemnified Party in writing within thirty (30) days after the Indemnified Party has given notice of the indemnification claim that the Indemnifying Party will indemnify the Indemnified Party in accordance with this Section, and (ii) the Indemnifying Party conducts the defense of the third-party claim actively and diligently. The Indemnified Party also may retain its own separate co-counsel at its sole cost and expense and participate in the defense of the claim. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party (i) if such settlement involves any form of relief other than the payment of money or any finding or admission of any violation of any law, regulation or order or any of the rights of any person or has any adverse effect on any other indemnification claims that have been or may be made against the Indemnified Party or (ii) if such settlement involves only the payment of money, unless it includes an unconditional release of such Indemnified Party of all liability on claims that are the subject of such proceeding. The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there is a final judgment for the plaintiff, the Indemnifying Party agrees to indemnify the Indemnified Party from and against any Loss by reason of such settlement or judgment. The Indemnified Party may assume control of the defense of any claim if (A) the Indemnifying Party fails to provide reasonable assurance to the Indemnified Party of its financial capacity to defend or provide indemnification with respect to such claim, (B) the Indemnified Party determines in good faith that there is a reasonable likelihood that an indemnification claim would materially and adversely affect it or any other indemnitees other than as a result of monetary damages that would be fully reimbursed by an Indemnifying Party under this Agreement, or (C) the Indemnifying Party refuses or falls to timely assume the defense of such indemnification claim.

 

SECTION XI

LIMITATION OF LIABILITY

 

11.1 THE AGGREGATE CUMULATIVE LIABILITY OF EACH PARTY WITH RESPECT TO THE OTHER PARTY FOR ANY LOSS OR DAMAGE ARISING OUT OF OR RELATED TO THIS AGREEMENT WITH RESPECT TO CLAIMS RELATING TO EVENTS DURING THE TERM OF THIS AGREEMENT SHALL NOT UNDER ANY CIRCUMSTANCES EXCEED FIVE MILLION DOLLARS ($5,000,000). 11.2 NOTWITHSTANDING ANY OTHER PROVISION N THIS AGREEMENT, NEITHER PARTY SHALL HAVE ANY LIABILITY TO THE OTHER PARTY FOR ANY INDIRECT, EXEMPLARY, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, LOST PROFITS, BUSINESS INTERRUPTION, OR LOST DATA) HOWEVER CAUSED AND, WHETHER IN CONTRACT, TORT, OR UNDER ANY OTHER THEORY OF LIABILITY, WHETHER OR NOT THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.

 

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11.3 NOTWITHSTANDING ANYTHING TN THIS AGREEMENT TO THE CONTRARY, THE LIMITATIONS OF LIABILITY SET FORTH IN THIS ARTICLE 11, INCLUDING, WITHOUT LIMITATION, THE MONETARY LIMITATION SET FORTH ABOVE, SHALL NOT APPLY TO ANY CLAIMS ARISING OR RESULTING FROM (A) A PARTY’S BREACH OF CONFIDENTIALITY OBLIGATIONS SET FORTH N SECTION VI; (B) INDEMNIFICATION OBLIGATIONS SET FORTH IN ARTICLE X; OR (C) A PARTY’S FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

 

SECTION XII

MISCELLANEOUS PROVISIONS

 

12.1 Cooperation and Access. The Parties shall reasonably cooperate in order to effect the transaction contemplated herein. The Parties hereby agree to provide the other with full and complete access to their respective operations to the extent relating to the transactions contemplated herein and all matters related thereto.

 

12.2 Arbitration. Any dispute arising under this Agreement shall be referred to and resolved by arbitration in the Commonwealth of Pennsylvania, in accordance with the rules of the American Arbitration Association, by a panel of three arbitrators, one of whom shall be selected by BMT, one of whom shall be selected by Bank, and the third of whom shall be selected by the arbitrators selected by BMT and Bank, A determination made in accordance with such rules shall be delivered in writing to the Parties hereto and shall be final and binding and conclusive upon them. Each Party shall pay its own legal, accounting, and other fees and expenses in connection with such an arbitration; provided, however, that the arbitrators may award arbitration costs, including legal, auditing, and other fees and expenses to the prevailing party in the arbitration proceeding if the arbitrators determine that such an award is appropriate,

 

12.3 Relationship of Parties. BMT and all of its agents and employees shall be considered independent contractors of Bank, and the Parties shall take such action as may be reasonably necessary to ensure such treatment, Bank shall at no time have any right or interest in the agreement(s) between BMT and the Higher Education clients and shall have no rights with respect to BMT customers except those rights which derive from the Depositor Agreements or from other contracts or relationships having no relation to the Depositor Program.

 

12.4 Entire Agreement. This Agreement contains the entire agreement of the Parties with respect to the subject matter contained herein and there are no agreements, warranties, covenants, or undertakings, other than those expressly set forth herein. BMT and Bank may enter into additional agreement for other products through separate agreements or amendments hereto.

 

12.5 Assignment. Neither this Agreement nor any of the rights or obligations under this Agreement, may be assigned or delegated, in whole or in part, by operation of law or otherwise, by any Party hereto without the prior written consent of the other Party hereto, and any such assignment without such prior written consent shall be null and void; provided, however, a Party may assign any or all of its rights and obligations under this Agreement to any of its Affiliates, but only to the extent that such assignment would not result in an impairment of the other Party’s rights under this Agreement; and provided, further, that a Party may, without the prior written consent of the other Party, assign all or any portion of its rights and obligations under this Agreement to an affiliate or subsidiary. Subject to the preceding sentence, this Agreement shall be binding upon, shall inure to the benefit of, and shall be enforceable by the Parties hereto and their permitted successors and assigns. No assignment shall relieve the assigning Party of any of its obligations hereunder. For the purposes of this Agreement, “affiliate” is a person who is controlled by or is under the common control of a Party, “control” being presumptively shown by a majority ownership and/or voting interest.

 

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12.6 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Pennsylvania without regard to its conflict of laws rules.

 

12.7 Amendment and Waiver. This Agreement may not be amended except by an instrument in writing signed on behalf of all of the Parties. Any term, provision, or condition of this Agreement (other than that required by law) may be waived in writing at any time by the Party which is entitled to the benefits thereof.

 

12.8 Force Majeure. Neither Party shall be deemed to be in default hereunder or liable for any losses arising out of the failure, delay or interruption of its performance of obligations under this Agreement due to any act of God, act of terrorism, act of public enemy, war, riot, flood, civil commotion, insurrection, severe weather conditions, or any other cause beyond that Party’s reasonable control.

 

12.9 Interpretation. The headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement.

 

12.10 Notice. Any notice to be given hereunder to the other Party, including any notice of a change of address, shall be in writing and shall be deemed validly given if (a) delivered personally or (b) sent by express delivery service, registered or certified mail, postage prepaid, return receipt requested or (c) sent by facsimile or email, as follows:

 

All such notices shall be deemed given on the date of actual receipt by the addressee if delivered personally, on the date of deposit with the express delivery service or the postal authorities if sent in either such manner, on the date the facsimile or email is sent if sent in such manner, and on the date of actual receipt by the addressee if delivered in any other manner. Notwithstanding the foregoing, each Party shall provide the other Party with a pre-notification of its intent to provide a notice hereunder, including, but not limited to, a notice of termination, two (2) business days prior to the notice so that the parties can use reasonable efforts to coordinate any necessary public disclosure of information.

 

12.11 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

 

END OF PAGE NEXT PAGE IS SIGNATURE PAGE

 

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IN WITNESS WHEREOF, this Deposit Processing Services Agreement is executed by the Parties’ authorized officers or representatives and shall be effective as of the Effective Date.

 

BM Technologies, Inc. (BMT)   Customers Bank (BANK)
     
By: /s/ Luvleen Sidhu   By: /s/ Richard Ehst
Name: Luvleen Sidhu   Name: Richard Ehst
Title: Chief Executive Officer   Title: President and Chief Executive Officer
     
Date: January 4, 2021   Date: January 4, 2021

 

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SCHEDULE 2.2

BMT DUTIES

 

[Schedules to this exhibit have been omitted pursuant to Item 601(b)(2) of Registration S-K. The Registrant hereby agrees to furnish a copy of any omitted schedules to the SEC upon request.]

 

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SCHEDULE 3.2

 

[Schedules to this exhibit have been omitted pursuant to Item 601(b)(2) of Registration S-K. The Registrant hereby agrees to furnish a copy of any omitted schedules to the SEC upon request.]

 

 

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Exhibit 10.4

 

NON-COMPETITION AND NON-SOLICITATION AGREEMENT

 

THIS NON-COMPETITION AND NON-SOLICITATION AGREEMENT (this “Agreement”) is being executed and delivered as of January 4, 2021, by Customers Bank, a Pennsylvania state chartered bank and the sole stockholder of the Company (defined below) (the “Subject Party”) in favor of and for the benefit of Megalith Financial Acquisition Corp., a Delaware corporation, which will be known after the consummation of the transactions contemplated by the Merger Agreement (as defined below) as “BM Technologies, Inc.” (including any successor entity thereto, the “Purchaser”), BankMobile Technologies, Inc., a Pennsylvania corporation (the “Company”), and each of the Purchaser’s and/or the Company’s respective Affiliates, successors and direct and indirect Subsidiaries (collectively with the Purchaser and the Company, the “Covered Parties”). Any capitalized term used, but not defined in this Agreement will have the meaning ascribed to such term in the Merger Agreement.

 

WHEREAS, on August 6, 2020, (i) the Purchaser, (ii) MFAC Merger Subsidiary Inc., a Pennsylvania corporation and a wholly-owned subsidiary of the Purchaser (“Merger Sub), the Subject Party, (iii) the Subject Party and (iv) the Company, entered into that certain Agreement and Plan of Merger (as amended, including by the First Amendment to Agreement and Plan of Merger, dated November 2, 2020 and the Second Amendment to Agreement and Plan of Merger, dated December 8, 2020, the “Merger Agreement”), pursuant to which, subject to the terms and conditions thereof, the Company merged with and into Merger Sub, with Merger Sub continuing as the surviving entity (the “Merger”), and with the Company’s stockholder receiving shares of the Purchaser’s common stock;

 

WHEREAS, as of the Closing Date, the Company provides a digital disbursement platform for colleges, universities and other higher educational institutions, student banking services through the disbursements platform, the T-Mobile Money product, white label digital banking services, and workplace banking services to clients with 999 employees or less (the “Business”);

 

WHEREAS, in connection with, and as a condition to the execution and delivery of the Merger Agreement and the consummation of the Merger and the other transactions contemplated thereby (the “Transactions”), and to enable the Purchaser to secure more fully the benefits of the Transactions, including the protection and maintenance of the goodwill and confidential information of the Company, the Purchaser has required that the Subject Party enter into this Agreement;

 

WHEREAS, the Subject Party is entering into this Agreement in order to induce the Purchaser and Merger Sub to consummate the Transactions, pursuant to which the Subject Party will directly or indirectly receive a material benefit; and

 

WHEREAS, the Subject Party, as the former sole stockholder of the Company, has contributed to the value of the Company and has obtained extensive and valuable knowledge and confidential information concerning the business of the Company.

 

 

 

 

NOW, THEREFORE, in order to induce the Purchaser to consummate the Transactions, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Subject Party hereby agrees as follows:

 

1. Restriction on Competition.

 

(a) Restriction. The Subject Party hereby agrees that during the period from the Closing until the four (4) year anniversary of the Closing Date (the “Termination Date”), and such period from the Closing until the Termination Date, the “Restricted Period”), the Subject Party will not, and will cause its Affiliates not to, without the prior written consent of Purchaser (which may be withheld in its sole discretion), anywhere in the United States or in any other markets in which the Covered Parties are engaged, or are actively contemplating to become engaged, in the Business as of the Closing Date or during the Restricted Period (the “Territory”), directly or indirectly engage in the Business (other than through a Covered Party) or own, manage, finance or control, or participate in the ownership, management, financing or control of, or become engaged or serve as an officer, director, member, partner, employee, agent, consultant, advisor or representative of, a business or entity (other than a Covered Party) that engages in the Business (a “Competitor”). Notwithstanding the foregoing, (i) a request by the Subject Party for prior written consent to engage in white label digital banking services with identified customers within the Territory shall not be unreasonably withheld, conditioned or delayed and (ii) the Subject Party and its Affiliates may own passive investments of no more than two percent (2%) of any class of outstanding equity interests in a Competitor that is publicly traded, so long as the Subject Party and its Affiliates and immediate family members are not involved in the management or control of such Competitor (“Permitted Ownership”).

 

(b) Acknowledgment. The Subject Party acknowledges and agrees, that (i) the Subject Party possesses knowledge of confidential information of the Company and the Business, (ii) the Subject Party’s execution of this Agreement is a material inducement to Purchaser to consummate the Transactions and to realize the goodwill of the Company, for which the Subject Party and/or its Affiliates will receive a substantial direct or indirect financial benefit, and that the Purchaser would not have entered into the Merger Agreement or consummated the Transactions but for the Subject Party’s agreements set forth in this Agreement, (iii) it would impair the goodwill of the Company and reduce the value of the assets of the Company and cause serious and irreparable injury if the Subject Party were to use its ability and knowledge by engaging in the Business in competition with a Covered Party, and/or to otherwise breach the obligations contained herein and that the Covered Parties would not have an adequate remedy at law because of the unique nature of the Business, (iv) the Subject Party and its Affiliates have no intention of engaging in the Business (other than through the Covered Parties) during the Restricted Period other than through Permitted Ownership, (v) the relevant public policy aspects of restrictive covenants, covenants not to compete and non-solicitation provisions have been discussed, and every effort has been made to limit the restrictions placed upon the Subject Party to those that are reasonable and necessary to protect the Covered Parties’ legitimate interests, (vi) the Covered Parties conduct and intend to conduct the Business everywhere in the Territory and compete with other businesses that are or could be located in any part of the Territory, (vii) the foregoing restrictions on competition are fair and reasonable in type of prohibited activity, geographic area covered, scope and duration, (viii) the consideration provided to the Subject Party under this Agreement and the Merger Agreement is not illusory, and (ix) such provisions do not impose a greater restraint than is necessary to protect the goodwill or other business interests of the Covered Parties.

 

2. No Solicitation; No Disparagement.

 

(a) No Solicitation of Employees and Consultants. The Subject Party agrees that, during the Restricted Period, the Subject Party will not, and will not permit its Affiliates to, without the prior written consent of the Purchaser (which may be withheld in its sole discretion), either on its own behalf or on behalf of any other Person (other than, if applicable, a Covered Party in the performance of the Subject Party’s duties on behalf of the Covered Parties), directly or indirectly: (i) hire or engage as an employee, independent contractor, consultant or otherwise any Covered Personnel (as defined below); (ii) solicit, induce, encourage or otherwise knowingly cause (or attempt to do any of the foregoing) any Covered Personnel to leave the service (whether as an employee, consultant or independent contractor) of any Covered Party; or (iii) in any way interfere with or attempt to interfere with the relationship between any Covered Personnel and any Covered Party; provided, however, the Subject Party and its Affiliates will not be deemed to have violated this Section 2(a) if any Covered Personnel voluntarily and independently solicits an offer of employment from the Subject Party or its Affiliate (or other Person whom any of them is acting on behalf of) by responding to a general advertisement or solicitation program conducted by or on behalf of the Subject Party or its Affiliate (or such other Person whom any of them is acting on behalf of) that is not targeted at such Covered Personnel or Covered Personnel generally, so long as such Covered Personnel is not hired. For purposes of this Agreement, “Covered Personnel” shall mean any Person who is or was an employee, consultant or independent contractor of the Covered Parties, as of the Closing Date, at any time during the Restricted Period and as of the relevant time of determination.

 

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(b) Non-Solicitation of Customers and Suppliers. The Subject Party agrees that, during the Restricted Period, the Subject Party and its Affiliates will not, without the prior written consent of the Purchaser (which may be withheld in its sole discretion), individually or on behalf of any other Person (other than, if applicable, a Covered Party in the performance of the Subject Party’s duties on behalf of the Covered Parties), directly or indirectly: (i) solicit, induce, encourage or otherwise knowingly cause (or attempt to do any of the foregoing) any Covered Customer (as defined below) to (A) cease being, or not become, a client or customer of any Covered Party with respect to the Business or (B) reduce the amount of business of such Covered Customer with any Covered Party, or otherwise alter such business relationship in a manner adverse to any Covered Party, in either case, with respect to or relating to the Business; (ii) knowingly interfere with or disrupt (or attempt to interfere with or disrupt) the contractual relationship between any Covered Party and any Covered Customer; (iii) divert any business with any Covered Customer relating to the Business from a Covered Party; (iv) solicit for business, provide services to, engage in or do business with, any Covered Customer for products or services that are part of the Business; or (v) interfere with or disrupt (or attempt to interfere with or disrupt), any Person that was a vendor, supplier, distributor, agent or other service provider of a Covered Party at the time of such interference or disruption, for a purpose competitive with a Covered Party as it relates to the Business. For purposes of this Agreement, a “Covered Customer” shall mean any Person who is or was an actual customer or client (or prospective customer or client with whom a Covered Party actively marketed or made or taken specific action to make a proposal) of a Covered Party, as of the Closing Date, at any time during the Restricted Period and as of the relevant time of determination.

 

(c) Non-Disparagement. The Subject Party agrees that from and after the Closing until the Second (2nd) anniversary of the end of the Restricted Period, the Subject Party and its Affiliates will not, directly or indirectly engage in any conduct that involves the making or publishing (including through electronic mail distribution or online social media) of any written or oral statements or remarks (including the repetition or distribution of derogatory rumors, allegations, negative reports or comments) that are disparaging, deleterious or damaging to the integrity, reputation or good will of one or more Covered Parties or their respective management, officers, employees, independent contractors or consultants. Notwithstanding the foregoing, subject to Section 3 below, the provisions of this Section 2(c) shall not restrict the Subject Party from providing truthful testimony or information in response to a subpoena or investigation by a Governmental Authority or in connection with any legal action by the Subject Party against any Covered Party under this Agreement, the Merger Agreement or any other Ancillary Document that is asserted by the Subject Party in good faith.

 

3. Confidentiality. From and after the Closing Date, the Subject Party will, and will cause its Representatives to, keep confidential and not (except, if applicable, in the performance of the Subject Party’s duties on behalf of the Covered Parties) directly or indirectly use, disclose, reveal, publish, transfer or provide access to, any and all Covered Party Information without the prior written consent of the Purchaser (which may be withheld in its sole discretion). As used in this Agreement, “Covered Party Information” means all material and information relating to the business, affairs and assets of any Covered Party, including material and information that concerns or relates to such Covered Party’s bidding and proposal, technical, computer hardware or software, administrative, management, operational, data processing, financial, marketing, sales, human resources, business development, planning and/or other business activities, regardless of whether such material and information is maintained in physical, electronic, or other form, that is: (A) gathered, compiled, generated, produced or maintained by such Covered Party through its Representatives, or provided to such Covered Party by its suppliers, service providers or customers; and (B) intended and maintained by such Covered Party or its Representatives, suppliers, service providers or customers to be kept in confidence. The obligations set forth in this Section 3 will not apply to any Covered Party Information where the Subject Party can prove that such material or information: (i) is known or available through other lawful sources not bound by a confidentiality agreement with, or other confidentiality obligation to, any Covered Party; (ii) is or becomes publicly known through no violation of this Agreement or other non-disclosure obligation of the Subject Party or any of its Representatives; (iii) is already in the possession of the Subject Party at the time of disclosure through lawful sources not bound by a confidentiality agreement or other confidentiality obligation as evidenced by the Subject Party’s documents and records; or (iv) is required to be disclosed pursuant to an order of any administrative body or court of competent jurisdiction (provided that (A) the applicable Covered Party is given reasonable prior written notice, (B) the Subject Party cooperates (and causes its Representatives to cooperate) with any reasonable request of any Covered Party to seek to prevent or narrow such disclosure and (C) if after compliance with clauses (A) and (B) such disclosure is still required, the Subject Party and its Representatives only disclose such portion of the Covered Party Information that is expressly required by such order, as it may be subsequently narrowed).

 

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4. Representations and Warranties. The Subject Party hereby represents and warrants, to and for the benefit of the Covered Parties as of the date of this Agreement and as of the Closing Date, that: (a) the Subject Party has full power and capacity to execute and deliver, and to perform all of the Subject Party’s obligations under, this Agreement; and (b) neither the execution and delivery of this Agreement nor the performance of the Subject Party’s obligations hereunder will result directly or indirectly in a violation or breach of any agreement or obligation by which the Subject Party is a party or otherwise bound. By entering into this Agreement, the Subject Party certifies and acknowledges that the Subject Party has carefully read all of the provisions of this Agreement, and that the Subject Party voluntarily and knowingly enters into this Agreement.

 

5. Remedies. The covenants and undertakings of the Subject Party contained in this Agreement relate to matters which are of a special, unique and extraordinary character and a violation of any of the terms of this Agreement may cause irreparable injury to the Covered Parties, the amount of which may be impossible to estimate or determine and which cannot be adequately compensated. The Subject Party agrees that, in the event of any breach or threatened breach by the Subject Party of any covenant or obligation contained in this Agreement, each applicable Covered Party will be entitled to seek the following remedies (in addition to, and not in lieu of, any other remedy at law or in equity or pursuant to the Merger Agreement or the other Ancillary Documents that may be available to the Covered Parties, including monetary damages), and a court of competent jurisdiction may award: (i) an injunction, restraining order or other equitable relief restraining or preventing such breach or threatened breach, without the necessity of proving actual damages or posting bond or security, which the Subject Party expressly waives; and (ii) recovery of the Covered Party’s attorneys’ fees and costs incurred in enforcing the Covered Party’s rights under this Agreement. The Subject Party hereby consents to the award of any of the above remedies to the applicable Covered Party in connection with any such breach or threatened breach. The Subject Party hereby acknowledges and agrees that in the event of any breach of this Agreement, any value attributed or allocated to this Agreement (or any other non-competition agreement with the Subject Party) under or in connection with the Merger Agreement shall not be considered a measure of, or a limit on, the damages of the Covered Parties.

 

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6. Survival of Obligations. The expiration of the Restricted Period will not relieve the Subject Party of any obligation or liability arising from any breach by the Subject Party of this Agreement during the Restricted Period. The Subject Party further agrees that the time period during which the covenants contained in Section 1 and Section 2 of this Agreement will be effective will be computed by excluding from such computation any time during which the Subject Party is in violation of any provision of such Sections.

 

7. Miscellaneous.

 

(a) Notices. All notices, consents, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered (i) in person, (ii) by facsimile or other electronic means, with affirmative confirmation of receipt, (iii) one Business Day after being sent, if sent by reputable, nationally recognized overnight courier service or (iv) three (3) Business Days after being mailed, if sent by registered or certified mail, pre-paid and return receipt requested, in each case to the applicable party at the following addresses (or at such other address for a party as shall be specified by like notice):

 

If to Purchaser (or any other Covered Party), to:

BM Technologies, Inc.

201 King of Prussia Road, Suite 350

Radnor, PA 19087

Attn: Board of Directors

 

with a copy (that will not constitute notice) to:

Nelson Mullins Riley & Scarborough
101 Constitution Avenue, NW, Suite 900
Washington, DC 20001
Attn: Jonathan H. Talcott, Esq.
Facsimile No.: (202) 689-2862
Telephone No.: (202) 689-2806
Email: jon.talcott@nelsonmullins.com

 

and

 

Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas, 11th Floor
New York, New York 10105
Attn: Matthew A. Gray, Esq.
Facsimile No.: (212) 370-7889
Telephone No.: (212) 370-1300
Email: mgray@egsllp.com

 


If to the Subject Party, to:
the address below the Subject Party’s name on the signature page to this Agreement.

 

 

(b) Integration and Non-Exclusivity. This Agreement, the Merger Agreement and the other Ancillary Documents contain the entire agreement between the Subject Party and the Covered Parties concerning the subject matter hereof. Notwithstanding the foregoing, the rights and remedies of the Covered Parties under this Agreement are not exclusive of or limited by any other rights or remedies which they may have, whether at law, in equity, by contract or otherwise, all of which will be cumulative (and not alternative). Without limiting the generality of the foregoing, the rights and remedies of the Covered Parties, and the obligations and liabilities of the Subject Party and its Affiliates, under this Agreement, are in addition to their respective rights, remedies, obligations and liabilities (i) under the laws of unfair competition, misappropriation of trade secrets, or other requirements of statutory or common law, or any applicable rules and regulations and (ii) otherwise conferred by contract, including the Merger Agreement and any other written agreement between the Subject Party or its Affiliate and any of the Covered Parties. Nothing in the Merger Agreement will limit any of the obligations, liabilities, rights or remedies of the Subject Party or the Covered Parties under this Agreement, nor will any breach of the Merger Agreement or any other agreement between the Subject Party or its Affiliate and any of the Covered Parties limit or otherwise affect any right or remedy of the Covered Parties under this Agreement. If any term or condition of any other agreement between the Subject Party or its Affiliate and any of the Covered Parties conflicts or is inconsistent with the terms and conditions of this Agreement, the more restrictive terms will control as to the Subject Party or its Affiliate, as applicable.

 

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(c) Severability; Reformation. Each provision of this Agreement is separable from every other provision of this Agreement. If any provision of this Agreement is found or held to be invalid, illegal or unenforceable, in whole or in part, by a court of competent jurisdiction, then (i) such provision will be deemed amended to conform to applicable laws so as to be valid, legal and enforceable to the fullest possible extent, (ii) the invalidity, illegality or unenforceability of such provision will not affect the validity, legality or enforceability of such provision under any other circumstances or in any other jurisdiction, and (iii) the invalidity, illegality or unenforceability of such provision will not affect the validity, legality or enforceability of the remainder of such provision or the validity, legality or enforceability of any other provision of this Agreement. The Subject Party and the Covered Parties will substitute for any invalid, illegal or unenforceable provision a suitable and equitable provision that carries out, so far as may be valid, legal and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision. Without limiting the foregoing, if any court of competent jurisdiction determines that any part hereof is unenforceable because of the duration, geographic area covered, scope of such provision, or otherwise, such court will have the power to reduce the duration, geographic area covered or scope of such provision, as the case may be, and, in its reduced form, such provision will then be enforceable. The Subject Party will, at a Covered Party’s request, join such Covered Party in requesting that such court take such action.

 

(d) Amendment; Waiver. This Agreement may not be amended or modified in any respect, except by a written agreement executed by the Subject Party, the Purchaser and Disinterested Director Majority (or their respective permitted successors or assigns). No waiver will be effective unless it is expressly set forth in a written instrument executed by the waiving party (and if such waiving party is a Covered Party, the Disinterested Director Majority) and any such waiver will have no effect except in the specific instance in which it is given. Any delay or omission by a party in exercising its rights under this Agreement, or failure to insist upon strict compliance with any term, covenant, or condition of this Agreement will not be deemed a waiver of such term, covenant, condition or right, nor will any waiver or relinquishment of any right or power under this Agreement at any time or times be deemed a waiver or relinquishment of such right or power at any other time or times.

 

(e) Dispute Resolution. Any dispute, difference, controversy or claim arising in connection with or related or incidental to, or question occurring under, this Agreement or the subject matter hereof (other than applications for a temporary restraining order, preliminary injunction, permanent injunction or other equitable relief or application for enforcement of a resolution under this Section 7(e)) (a “Dispute”) shall be governed by this Section 7(e). A party must, in the first instance, provide written notice of any Disputes to the other parties subject to such Dispute, which notice must provide a reasonably detailed description of the matters subject to the Dispute. Any Dispute that is not resolved may at any time after the delivery of such notice immediately be referred to and finally resolved by arbitration pursuant to the then-existing Expedited Procedures of the Commercial Arbitration Rules (the “AAA Procedures”) of the American Arbitration Association (the “AAA”). Any party involved in such Dispute may submit the Dispute to the AAA to commence the proceedings after the Resolution Period. To the extent that the AAA Procedures and this Agreement are in conflict, the terms of this Agreement shall control. The arbitration shall be conducted by one arbitrator nominated by the AAA promptly (but in any event within five (5) Business Days) after the submission of the Dispute to the AAA and reasonably acceptable to each party subject to the Dispute, which arbitrator shall be a commercial lawyer with substantial experience arbitrating disputes under acquisition agreements. The arbitrator shall accept his or her appointment and begin the arbitration process promptly (but in any event within five (5) Business Days) after his or her nomination and acceptance by the parties subject to the Dispute. The proceedings shall be streamlined and efficient. The arbitrator shall decide the Dispute in accordance with the substantive law of the State of New York. Time is of the essence. Each party shall submit a proposal for resolution of the Dispute to the arbitrator within twenty (20) days after confirmation of the appointment of the arbitrator. The arbitrator shall have the power to order any party to do, or to refrain from doing, anything consistent with this Agreement, the Ancillary Documents and applicable Law, including to perform its contractual obligation(s); provided, that the arbitrator shall be limited to ordering pursuant to the foregoing power (and, for the avoidance of doubt, shall order) the relevant party (or parties, as applicable) to comply with only one or the other of the proposals. The arbitrator's award shall be in writing and shall include a reasonable explanation of the arbitrator's reason(s) for selecting one or the other proposal. The seat of arbitration shall be in New York County, State of New York. The language of the arbitration shall be English.

 

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(f) Governing Law; Jurisdiction. This Agreement shall be governed by, construed and enforced in accordance with the Laws of the State of New York without regard to the conflict of laws principles thereof. Subject to Section 7(e), all Actions arising out of or relating to this Agreement shall be heard and determined exclusively in any state or federal court located in New York, New York (or in any appellate courts thereof) (the “Specified Courts”). Subject to Section 7(e), each party hereto hereby (a) submits to the exclusive jurisdiction of any Specified Court for the purpose of any Action arising out of or relating to this Agreement brought by any party hereto, (b) irrevocably waives, and agrees not to assert by way of motion, defense or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the Action is brought in an inconvenient forum, that the venue of the Action is improper, or that this Agreement or the transactions contemplated hereby may not be enforced in or by any Specified Court and (c) waives any bond, surety or other security that might be required of any other party with respect thereto. Each party agrees that a final judgment in any Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law or in equity. Each party irrevocably consents to the service of the summons and complaint and any other process in any other action or proceeding relating to the transactions contemplated by this Agreement, on behalf of itself, or its property, by personal delivery of copies of such process to such party at the applicable address set forth in Section 7(a). Nothing in this Section 7(f) shall affect the right of any party to serve legal process in any other manner permitted by Law.

 

(g) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SEEK TO ENFORCE THAT FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7(g). ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 7(g) WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

 

(h) Successors and Assigns; Third Party Beneficiaries. This Agreement will be binding upon the Subject Party and the Subject Party’s estate, successors and assigns, and will inure to the benefit of the Covered Parties, and their respective successors and assigns. No Covered Party may assign any or all of its rights under this Agreement, at any time, in whole or in part, to any Person without first obtaining the consent or approval of the Subject Party (which consent shall not be unreasonably withheld, conditioned or delayed). The Subject Party agrees that the obligations of the Subject Party under this Agreement are personal and will not be assigned by the Subject Party. Each of the Covered Parties are express third party beneficiaries of this Agreement and will be considered parties under and for purposes of this Agreement.

 

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(i) Disinterested Director Majority Authorized to Act on Behalf of Covered Parties. The parties acknowledge and agree that the Disinterested Director Majority is authorized and shall have the sole right to act on behalf of Purchaser and the other Covered Parties under this Agreement, including the right to enforce the Purchaser’s rights and remedies under this Agreement. Without limiting the foregoing, in the event that the Subject Party serves as a director, officer, employee or other authorized agent of a Covered Party, the Subject Party shall have no authority, express or implied, to act or make any determination on behalf of a Covered Party in connection with this Agreement or any dispute or Action with respect hereto.

 

(j) Construction. The Subject Party acknowledges that the Subject Party has been represented by counsel, or had the opportunity to be represented by counsel of the Subject Party’s choice. Any rule of construction to the effect that ambiguities are to be resolved against the drafting party will not be applied in the construction or interpretation of this Agreement. Neither the drafting history nor the negotiating history of this Agreement will be used or referred to in connection with the construction or interpretation of this Agreement. The headings and subheadings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. In this Agreement: (i) the words “include,” “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation”; (ii) the definitions contained herein are applicable to the singular as well as the plural forms of such terms; (iii) whenever required by the context, any pronoun shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (iv) the words “herein,” “hereto,” and “hereby” and other words of similar import shall be deemed in each case to refer to this Agreement as a whole and not to any particular Section or other subdivision of this Agreement; (v) the word “if” and other words of similar import when used herein shall be deemed in each case to be followed by the phrase “and only if”; (vi) the term “or” means “and/or”; and (vii) any agreement or instrument defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement or instrument as from time to time amended, modified or supplemented, including by waiver or consent and references to all attachments thereto and instruments incorporated therein.

 

(k) Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. A photocopy, faxed, scanned and/or emailed copy of this Agreement or any signature page to this Agreement, shall have the same validity and enforceability as an originally signed copy.

 

(l) Effectiveness. This Agreement shall be binding upon the Subject Party upon the Subject Party’s execution and delivery of this Agreement, but this Agreement shall only become effective upon the consummation of the Transactions. In the event that the Merger Agreement is validly terminated in accordance with its terms prior to the consummation of the Transactions, this Agreement shall automatically terminate and become null and void, and the parties shall have no obligations hereunder.

 

[Remainder of Page Intentionally Left Blank; Signature Page Follows]

 

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IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Non-Competition and Non-Solicitation Agreement as of the date first written above.

 

  Subject Party:
     
  Customers Bank
     
  By: /s/ Richard Ehst
  Name:  Richard Ehst
  Title: President and Chief Executive Officer

 

  Address for Notice:
   
  Address:
   
  701 Reading Avenue
  West Reading, PA 19611
  Attn: Carla Leibold, CFO
  484-923-8802
  cleibold@customersbank.com

 

{Signature Page to Non-Competition Agreement}

 

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Acknowledged and accepted as of the date first written above:
     
The Purchaser:  
     
MEGALITH FINANCIAL ACQUISITION CORP.  
     
By: /s/ A.J. Dunklau  
Name: A.J. Dunklau  
Title: Chief Executive Officer  
     
The Company:  
     
BANKMOBILE TECHNOLOGIES, INC.  
     
By: /s/ Luvleen Sidhu  
Name: Luvleen Sidhu  
Title: Chief Executive Officer  

 

{Signature Page to Non-Competition Agreement}

 

 

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Exhibit 10.5

 

INDEMNITY AGREEMENT

 

THIS INDEMNITY AGREEMENT (this “Agreement”) is made as of January 4, 2021, by and between BM Technologies, Inc., a Delaware corporation (the “Company”), and [•] (“Indemnitee”).

 

RECITALS

 

WHEREAS, highly competent persons have become more reluctant to serve publicly-held corporations as directors, officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of such corporations;

 

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions. At the same time, directors, officers and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself.  The Amended and Restated Certificate of Incorporation (the “Charter”) and the Bylaws (the “Bylaws”) of the Company require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to applicable provisions of the Delaware General Corporation Law (“DGCL”). The Charter, Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the Board, officers and other persons with respect to indemnification, hold harmless, exoneration, advancement and reimbursement rights;

 

WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;

 

WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company’s stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;

 

WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, hold harmless, exonerate and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so protected against liabilities;

 

WHEREAS, this Agreement is a supplement to and in furtherance of the Charter and Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;

 

WHEREAS, Indemnitee may not be willing to serve as an officer or director, advisor or in another capacity without adequate protection, and the Company desires Indemnitee to serve in such capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that Indemnitee be so indemnified; and

 

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

 

 

 

 

TERMS AND CONDITIONS

 

1. SERVICES TO THE COMPANY Indemnitee will serve or continue to serve as an officer, director, advisor, key employee or any other capacity of the Company, as applicable, for so long as Indemnitee is duly elected or appointed or retained or until Indemnitee tenders Indemnitee’s resignation or until Indemnitee is removed. The foregoing notwithstanding, this Agreement shall continue in full force and effect after Indemnitee has ceased to serve as a director, officer, advisor, key employee or in any other capacity of the Company, as provided in Section 17. This Agreement, however, shall not impose any obligation on Indemnitee or the Company to continue Indemnitee’s service to the Company beyond any period otherwise required by law or by other agreements or commitments of the parties, if any.

 

2. DEFINITIONS. As used in this Agreement:

 

(a)  References to “agent” shall mean any person who is or was a director, officer or employee of the Company or a subsidiary of the Company or other person authorized by the Company to act for the Company, to include such person serving in such capacity as a director, officer, employee, fiduciary or other official of another corporation, partnership, limited liability company, joint venture, trust or other enterprise at the request of, for the convenience of, or to represent the interests of the Company or a subsidiary of the Company.

 

(b)  The terms “Beneficial Owner” and “Beneficial Ownership” shall have the meanings set forth in Rule 13d-3 promulgated under the Exchange Act (as defined below) as in effect on the date hereof.

 

(c)  A “Change in Control” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following events:

 

(i) Acquisition of Stock by Third Party. Any Person (as defined below) is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing fifteen percent (15%) or more of the combined voting power of the Company’s then outstanding securities entitled to vote generally in the election of directors, unless (1) the change in the relative Beneficial Ownership of the Company’s securities by any Person results solely from a reduction in the aggregate number of outstanding shares of securities entitled to vote generally in the election of directors, or (2) such acquisition was approved in advance by the Continuing Directors (as defined below) and such acquisition would not constitute a Change in Control under part (iii) of this definition;

 

(ii) Change in Board of Directors. Individuals who, as of the date hereof, constitute the Board, and any new director whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two thirds of the directors then still in office who were directors on the date hereof or whose election for nomination for election was previously so approved (collectively, the “Continuing Directors”), cease for any reason to constitute at least a majority of the members of the Board;

 

(iii) Corporate Transactions. The effective date of a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination, involving the Company and one or more businesses (a “Business Combination”), in each case, unless, following such Business Combination: (1) all or substantially all of the individuals and entities who were the Beneficial Owners of securities entitled to vote generally in the election of directors immediately prior to such Business Combination beneficially own, directly or indirectly, more than 51% of the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more Subsidiaries (as defined below)) in substantially the same proportions as their ownership immediately prior to such Business Combination, of the securities entitled to vote generally in the election of directors; (2) no Person (excluding any corporation resulting from such Business Combination) is the Beneficial Owner, directly or indirectly, of 15% or more of the combined voting power of the then outstanding securities entitled to vote generally in the election of directors of the surviving corporation except to the extent that such ownership existed prior to the Business Combination; and (3) at least a majority of the Board of Directors of the corporation resulting from such Business Combination were Continuing Directors at the time of the execution of the initial agreement, or of the action of the Board of Directors, providing for such Business Combination;

 

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(iv) Liquidation. The approval by the stockholders of the Company of a complete liquidation of the Company or an agreement or series of agreements for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than factoring the Company’s current receivables or escrows due (or, if such stockholder approval is not required, the decision by the Board to proceed with such a liquidation, sale, or disposition in one transaction or a series of related transactions); or

 

(v) Other Events. There occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or any successor rule) (or a response to any similar item on any similar schedule or form) promulgated under the Exchange Act (as defined below), whether or not the Company is then subject to such reporting requirement.

 

(d)  “Corporate Status” describes the status of a person who is or was a director, officer, trustee, general partner, manager, managing member, fiduciary, employee or agent of the Company or of any other Enterprise (as defined below) which such person is or was serving at the request of the Company.

 

(e)  “Delaware Court” shall mean the Court of Chancery of the State of Delaware.

 

(f)  “Disinterested Director” shall mean a director of the Company who is not and was not a party to the Proceeding (as defined below) in respect of which indemnification is sought by Indemnitee.

 

(g)  “Enterprise” shall mean the Company and any other corporation, constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger to which the Company (or any of its wholly owned subsidiaries) is a party, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, trustee, general partner, managing member, fiduciary, employee or agent.

 

(h)  “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

(i)  “Expenses” shall include all direct and indirect costs, fees and expenses of any type or nature whatsoever, including, without limitation, all reasonable attorneys’ fees and costs, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, fees of private investigators and professional advisors, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, fax transmission charges, secretarial services and all other disbursements, obligations or expenses in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, settlement or appeal of, or otherwise participating in, a Proceeding (as defined below), including reasonable compensation for time spent by Indemnitee for which he or she is not otherwise compensated by the Company or any third party. Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding (as defined below), including without limitation the principal, premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent. “Expenses,” however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

 

(j)  References to “fines” shall include any excise tax assessed on Indemnitee with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, officer, employee, agent or fiduciary of the Company which imposes duties on, or involves services by, such director, officer, employee, agent or fiduciary with respect to an employee benefit plan, its participants or beneficiaries; and if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan, Indemnitee shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement.

 

(k)  “Independent Counsel” shall mean a law firm or a member of a law firm with significant experience in matters of corporation law and that neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements); or (ii) any other party to the Proceeding (as defined below) giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

 

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(l)  The term “Person” shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act as in effect on the date hereof; provided, however, that “Person” shall exclude: (i) the Company; (ii) any Subsidiaries (as defined below) of the Company; (iii) any employment benefit plan of the Company or of a Subsidiary (as defined below) of the Company or of any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company; and (iv) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or of a Subsidiary (as defined below) of the Company or of a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

 

(m)  The term “Proceeding” shall include any threatened, pending or completed action, suit, arbitration, mediation, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil (including intentional or unintentional tort claims), criminal, administrative or investigative or related nature, in which Indemnitee was, is, will or might be involved as a party or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action (or failure to act) taken by Indemnitee or of any action (or failure to act) on Indemnitee’s part while acting as a director or officer of the Company, or by reason of the fact that Indemnitee is or was serving at the request of the Company as a director, officer, trustee, general partner, managing member, fiduciary, employee or agent of any other Enterprise, in each case whether or not serving in such capacity at the time any liability or expense is incurred for which indemnification, reimbursement, or advancement of expenses can be provided under this Agreement.

 

(n)  The term “Subsidiary,” with respect to any Person, shall mean any corporation, limited liability company, partnership, joint venture, trust or other entity of which a majority of the voting power of the voting equity securities or equity interest is owned, directly or indirectly, by that Person.

 

3. INDEMNITY IN THIRD-PARTY PROCEEDINGS. To the fullest extent permitted by applicable law, the Company shall indemnify, hold harmless and exonerate Indemnitee in accordance with the provisions of this Section 3 if Indemnitee was, is, or is threatened to be made, a party to or a participant (as a witness, deponent or otherwise) in any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor by reason of Indemnitee’s Corporate Status. Pursuant to this Section 3, Indemnitee shall be indemnified, held harmless and exonerated against all Expenses, judgments, liabilities, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses, judgments, liabilities, fines, penalties and amounts paid in settlement) actually, and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal Proceeding, had no reasonable cause to believe that Indemnitee’s conduct was unlawful.

 

4. INDEMNITY IN PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. To the fullest extent permitted by applicable law, the Company shall indemnify, hold harmless and exonerate Indemnitee in accordance with the provisions of this Section 4 if Indemnitee was, is, or is threatened to be made, a party to or a participant (as a witness, deponent or otherwise) in any Proceeding by or in the right of the Company to procure a judgment in its favor by reason of Indemnitee’s Corporate Status. Pursuant to this Section 4, Indemnitee shall be indemnified, held harmless and exonerated against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company. No indemnification, hold harmless or exoneration for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that any court in which the Proceeding was brought or the Delaware Court shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification, to be held harmless or to exoneration.

 

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5. INDEMNIFICATION FOR EXPENSES OF A PARTY WHO IS WHOLLY OR PARTLY SUCCESSFUL. Notwithstanding any other provisions of this Agreement except for Section 27, to the extent that Indemnitee was or is, by reason of Indemnitee’s Corporate Status, a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall, to the fullest extent permitted by applicable law, indemnify, hold harmless and exonerate Indemnitee against all Expenses actually and reasonably incurred by Indemnitee in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall, to the fullest extent permitted by applicable law, indemnify, hold harmless and exonerate Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with each successfully resolved claim, issue or matter. If Indemnitee is not wholly successful in such Proceeding, the Company also shall, to the fullest extent permitted by applicable law, indemnify, hold harmless and exonerate Indemnitee against all Expenses reasonably incurred in connection with a claim, issue or matter related to any claim, issue, or matter on which Indemnitee was successful. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

 

6. INDEMNIFICATION FOR EXPENSES OF A WITNESS. Notwithstanding any other provision of this Agreement except for Section 27, to the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a witness or deponent in any Proceeding to which Indemnitee was or is not a party or threatened to be made a party, Indemnitee shall, to the fullest extent permitted by applicable law, be indemnified, held harmless and exonerated against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.

 

7. ADDITIONAL INDEMNIFICATION, HOLD HARMLESS AND EXONERATION RIGHTS. Notwithstanding any limitation in Sections 3, 4, or 5 and except for Section 27, the Company shall, to the fullest extent permitted by applicable law, indemnify, hold harmless and exonerate Indemnitee if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Expenses, judgments, liabilities, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses, judgments, liabilities, fines, penalties and amounts paid in settlement) actually and reasonably incurred by Indemnitee in connection with the Proceeding. No indemnification, hold harmless or exoneration rights shall be available under this Section 7 on account of Indemnitee’s conduct which constitutes a breach of Indemnitee’s duty of loyalty to the Company or its stockholders or is an act or omission not in good faith or which involves intentional misconduct or a knowing violation of the law.

 

8. CONTRIBUTION IN THE EVENT OF JOINT LIABILITY.

 

(a)  To the fullest extent permissible under applicable law, if the indemnification, hold harmless and/or exoneration rights provided for in this Agreement are unavailable to Indemnitee in whole or in part for any reason whatsoever, the Company, in lieu of indemnifying, holding harmless or exonerating Indemnitee, shall pay, in the first instance, the entire amount incurred by Indemnitee, whether for judgments, liabilities, fines, penalties, amounts paid or to be paid in settlement and/or for Expenses, in connection with any Proceeding without requiring Indemnitee to contribute to such payment, and the Company hereby waives and relinquishes any right of contribution it may have at any time against Indemnitee.

 

(b)  The Company shall not enter into any settlement of any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.

 

(c)  The Company hereby agrees to fully indemnify, hold harmless and exonerate Indemnitee from any claims for contribution which may be brought by officers, directors or employees of the Company other than Indemnitee who may be jointly liable with Indemnitee.

 

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9. EXCLUSIONS. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnification, advance expenses, hold harmless or exoneration payment in connection with any claim made against Indemnitee:

 

(a)  for which payment has actually been received by or on behalf of Indemnitee under any insurance policy or other indemnity or advancement provision, except with respect to any excess beyond the amount actually received under any insurance policy, contract, agreement, other indemnity or advancement provision or otherwise;

 

(b)  for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (or any successor rule) or similar provisions of state statutory law or common law; or

 

(c)  except as otherwise provided in Sections 14(f)-(g) hereof, prior to a Change in Control, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, hold harmless or exoneration payment, in its sole discretion, pursuant to the powers vested in the Company under applicable law. Indemnitee shall seek payments or advances from the Company only to the extent that such payments or advances are unavailable from any insurance policy of the Company covering Indemnitee.

 

10. ADVANCES OF EXPENSES; DEFENSE OF CLAIM.

 

(a)  Notwithstanding any provision of this Agreement to the contrary, except for Section 27, and to the fullest extent not prohibited by applicable law, the Company shall pay the Expenses incurred by Indemnitee (or reasonably expected by Indemnitee to be incurred by Indemnitee within three months) in connection with any Proceeding within ten (10) days after the receipt by the Company of a statement or statements requesting such advances from time to time, prior to the final disposition of any Proceeding. Advances shall, to the fullest extent permitted by law, be unsecured and interest free. Advances shall, to the fullest extent permitted by law, be made without regard to Indemnitee’s ability to repay the Expenses and without regard to Indemnitee’s ultimate entitlement to be indemnified, held harmless or exonerated under the other provisions of this Agreement. Advances shall include any and all reasonable Expenses incurred pursuing a Proceeding to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. To the fullest extent required by applicable law, such payments of Expenses in advance of the final disposition of the Proceeding shall be made only upon the Company’s receipt of an undertaking, by or on behalf of Indemnitee, to repay the advanced amounts to the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified, held harmless or exonerated by the Company under the provisions of this Agreement, the Charter, the Bylaws, applicable law or otherwise. This Section 10(a) shall not apply to any claim made by Indemnitee for which an indemnification, hold harmless or exoneration payment is excluded pursuant to Section 9.

 

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(b)  The Company will be entitled to participate in the Proceeding at its own expense.

 

(c)  The Company shall not settle any action, claim or Proceeding (in whole or in part) which would impose any Expense, judgment, liability, fine, penalty or limitation on Indemnitee without Indemnitee’s prior written consent.

 

11. PROCEDURE FOR NOTIFICATION AND APPLICATION FOR INDEMNIFICATION.

 

(a)  Indemnitee agrees to notify promptly the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding, claim, issue or matter therein which may be subject to indemnification, hold harmless or exoneration rights, or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement, or otherwise.

 

(b)  Indemnitee may deliver to the Company a written application to indemnify, hold harmless or exonerate Indemnitee in accordance with this Agreement. Such application(s) may be delivered from time to time and at such time(s) as Indemnitee deems appropriate in his or her sole discretion. Following such a written application for indemnification by Indemnitee, Indemnitee’s entitlement to indemnification shall be determined according to Section 12(a) of this Agreement.

 

12. PROCEDURE UPON APPLICATION FOR INDEMNIFICATION.

 

(a)  A determination, if required by applicable law, with respect to Indemnitee’s entitlement to indemnification shall be made in the specific case by one of the following methods, which shall be at the election of Indemnitee: (i) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (ii) by a committee of such directors designated by majority vote of such directors, (iii) if there are no Disinterested Directors or if such directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee, or (iv) by vote of the stockholders. The Company promptly will advise Indemnitee in writing with respect to any determination that Indemnitee is or is not entitled to indemnification, including a description of any reason or basis for which indemnification has been denied. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall reasonably cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby agrees to indemnify and to hold Indemnitee harmless therefrom.

 

(b)  In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) hereof, the Independent Counsel shall be selected as provided in this Section 12(b). The Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected and certifying that the Independent Counsel so selected meets the requirements of “Independent Counsel” as defined in Section 2 of this Agreement. If the Independent Counsel is selected by the Board, the Company shall give written notice to Indemnitee advising Indemnitee of the identity of the Independent Counsel so selected and certifying that the Independent Counsel so selected meets the requirements of “Independent Counsel” as defined in Section 2 of this Agreement. In either event, Indemnitee or the Company, as the case may be, may, within ten (10) days after such written notice of selection shall have been received, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court of competent jurisdiction has determined that such objection is without merit. If, within twenty (20) days after submission by Indemnitee of a written request for indemnification pursuant to Section 11(b) hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Delaware Court for resolution of any objection which shall have been made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Delaware Court, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 12(a) hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 14(a) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

 

(c)  The Company agrees to pay the reasonable fees and expenses of Independent Counsel and to fully indemnify and hold harmless such Independent Counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

 

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13. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS.

 

(a)  In making a determination with respect to entitlement to indemnification hereunder, the person, persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 11(b) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by the Disinterested Directors or Independent Counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by the Disinterested Directors or Independent Counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

 

(b)  If the person, persons or entity empowered or selected under Section 12 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within thirty (30) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent permitted by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a final judicial determination that any or all such indemnification is expressly prohibited under applicable law; provided, however, that such 30-day period may be extended for a reasonable time, not to exceed an additional fifteen (15) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto.

 

(c)  The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful.

 

(d)  For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the directors, manager, or officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise, its Board, any committee of the Board or any director, trustee, general partner, manager or managing member, or on information or records given or reports made to the Enterprise, its Board, any committee of the Board or any director, trustee, general partner, manager or managing member, by an independent certified public accountant or by an appraiser or other expert selected by the Enterprise, its Board, any committee of the Board or any director, trustee, general partner, manager or managing member. The provisions of this Section 13(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which Indemnitee may be deemed or found to have met the applicable standard of conduct set forth in this Agreement.

 

(e)  The knowledge and/or actions, or failure to act, of any other director, officer, trustee, partner, manager, managing member, fiduciary, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

 

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14. REMEDIES OF INDEMNITEE.

 

(a)  In the event that (i) a determination is made pursuant to Section 12 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses, to the fullest extent permitted by applicable law, is not timely made pursuant to Section 10 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 12(a) of this Agreement within thirty (30) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5, 6, 7 or the last sentence of Section 12(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, (v) a contribution payment is not made in a timely manner pursuant to Section 8 of this Agreement, (vi) payment of indemnification pursuant to Section 3 or 4 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vii) payment to Indemnitee pursuant to any hold harmless or exoneration rights under this Agreement or otherwise is not made in accordance with this Agreement, Indemnitee shall be entitled to an adjudication by the Delaware Court to such indemnification, hold harmless, exoneration, contribution or advancement rights. Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Except as set forth herein, the provisions of Delaware law (without regard to its conflict of laws rules) shall apply to any such arbitration. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

 

(b)  In the event that a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination.

 

(c)  In any judicial proceeding or arbitration commenced pursuant to this Section 14, Indemnitee shall be presumed to be entitled to be indemnified, held harmless, and exonerated and to receive advancement of Expenses under this Agreement and the Company shall have the burden of proving Indemnitee is not entitled to be indemnified, held harmless, and exonerated and to receive advancement of Expenses, as the case may be, and the Company may not refer to or introduce into evidence any determination pursuant to Section 12(a) of this Agreement adverse to Indemnitee for any purpose. If Indemnitee commences a judicial proceeding or arbitration pursuant to this Section 14, Indemnitee shall not be required to reimburse the Company for any advances pursuant to Section 10 until a final determination is made with respect to Indemnitee’s entitlement to indemnification (as to which all rights of appeal have been exhausted or lapsed).

 

(d)  If a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

 

(e)  The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement.

 

(f)  The Company shall indemnify and hold harmless Indemnitee to the fullest extent permitted by law against all Expenses and, if requested by Indemnitee, shall (within ten (10) days after the Company’s receipt of such written request) pay to Indemnitee, to the fullest extent permitted by applicable law, such Expenses which are incurred by Indemnitee in connection with any judicial proceeding or arbitration brought by Indemnitee: (i) to enforce his or her rights under, or to recover damages for breach of, this Agreement or any other indemnification, hold harmless, exoneration, advancement or contribution agreement or provision of the Charter, or the Bylaws now or hereafter in effect; or (ii) for recovery or advances under any insurance policy maintained by any person for the benefit of Indemnitee, regardless of the outcome and whether Indemnitee ultimately is determined to be entitled to such indemnification, hold harmless or exoneration right, advancement, contribution or insurance recovery, as the case may be (unless such judicial proceeding or arbitration was not brought by Indemnitee in good faith).

 

(g)  Interest shall be paid by the Company to Indemnitee at the legal rate under Delaware law for amounts which the Company indemnifies, holds harmless or exonerates, or advances, or is obliged to indemnify, hold harmless or exonerate or advance for the period commencing with the date on which Indemnitee requests indemnification, to be held harmless, exonerated, contribution, reimbursement or advancement of any Expenses and ending with the date on which such payment is made to Indemnitee by the Company.

 

9

 

 

15. SECURITY. Notwithstanding anything herein to the contrary, except for Section 27, to the extent requested by Indemnitee and approved by the Board, the Company may at any time and from time to time provide security to Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any such security, once provided to Indemnitee, may not be revoked or released without the prior written consent of Indemnitee.

 

16.  NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; INSURANCE; SUBROGATION.

 

(a)  The rights of Indemnitee as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Charter, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any Proceeding (regardless of when such Proceeding is first threatened, commenced or completed) or claim, issue or matter therein arising out of, or related to, any action taken or omitted by such Indemnitee in Indemnitee’s Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in applicable law, whether by statute or judicial decision, permits greater indemnification, hold harmless or exoneration rights or advancement of Expenses than would be afforded currently under the Charter, the Bylaws or this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

 

(b)  The DGCL, the Charter and the Bylaws permit the Company to purchase and maintain insurance or furnish similar protection or make other arrangements including, but not limited to, providing a trust fund, letter of credit, or surety bond (“Indemnification Arrangements”) on behalf of Indemnitee against any liability asserted against Indemnitee or incurred by or on behalf of Indemnitee or in such capacity as a director, officer, employee or agent of the Company, or arising out of Indemnitee’s status as such, whether or not the Company would have the power to indemnify Indemnitee against such liability under the provisions of this Agreement or under the DGCL, as it may then be in effect. The purchase, establishment, and maintenance of any such Indemnification Arrangement shall not in any way limit or affect the rights and obligations of the Company or of Indemnitee under this Agreement except as expressly provided herein, and the execution and delivery of this Agreement by the Company and Indemnitee shall not in any way limit or affect the rights and obligations of the Company or the other party or parties thereto under any such Indemnification Arrangement.

 

(c)  To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, trustees, partners, managers, managing members, fiduciaries, employees, or agents of the Company or of any other Enterprise which such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, trustee, partner, managers, managing member, fiduciary, employee or agent under such policy or policies. If, at the time the Company receives notice from any source of a Proceeding as to which Indemnitee is a party or a participant (as a witness, deponent or otherwise), the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.

 

(d)  In the event of any payment under this Agreement, the Company, to the fullest extent permitted by law, shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

 

10

 

 

(e)  The Company’s obligation to indemnify, hold harmless, exonerate or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, trustee, partner, manager, managing member, fiduciary, employee or agent of any other Enterprise shall be reduced by any amount Indemnitee has actually received as indemnification, hold harmless or exoneration payments or advancement of expenses from such Enterprise. Notwithstanding any other provision of this Agreement to the contrary except for Section 27, (i) Indemnitee shall have no obligation to reduce, offset, allocate, pursue or apportion any indemnification, hold harmless, exoneration, advancement, contribution or insurance coverage among multiple parties possessing such duties to Indemnitee prior to the Company’s satisfaction and performance of all its obligations under this Agreement, and (ii) the Company shall perform fully its obligations under this Agreement without regard to whether Indemnitee holds, may pursue or has pursued any indemnification, advancement, hold harmless, exoneration, contribution or insurance coverage rights against any person or entity other than the Company.

 

17. DURATION OF AGREEMENT. All agreements and obligations of the Company contained herein shall continue during the period Indemnitee serves as a director or officer of the Company or as a director, officer, trustee, partner, manager, managing member, fiduciary, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other Enterprise which Indemnitee serves at the request of the Company and shall continue thereafter so long as Indemnitee shall be subject to any possible Proceeding (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant to Section 14 of this Agreement) by reason of Indemnitee’s Corporate Status, whether or not Indemnitee is acting in any such capacity at the time any liability or expense is incurred for which indemnification or advancement can be provided under this Agreement.

 

18. SEVERABILITY. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

 

19. ENFORCEMENT AND BINDING EFFECT.

 

(a)  The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director, officer or key employee of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director, officer or key employee of the Company.

 

(b)  Without limiting any of the rights of Indemnitee under the Charter or Bylaws as they may be amended from time to time, this Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.

 

(c)  The indemnification, hold harmless, exoneration and advancement of expenses rights provided by or granted pursuant to this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or a director, officer, trustee, general partner, manager, managing member, fiduciary, employee or agent of any other Enterprise at the Company’s request, and shall inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.

 

(d)  The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

 

11

 

 

(e)  The Company and Indemnitee agree herein that a monetary remedy for breach of this Agreement, at some later date, may be inadequate, impracticable and difficult of proof, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto agree that Indemnitee may, to the fullest extent permitted by law, enforce this Agreement by seeking, among other things, injunctive relief and/or specific performance hereof, without any necessity of showing actual damage or irreparable harm and that by seeking injunctive relief and/or specific performance, Indemnitee shall not be precluded from seeking or obtaining any other relief to which Indemnitee may be entitled. The Company and Indemnitee further agree that Indemnitee shall, to the fullest extent permitted by law, be entitled to such specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the necessity of posting bonds or other undertaking in connection therewith. The Company acknowledges that in the absence of a waiver, a bond or undertaking may be required of Indemnitee by a court of competent jurisdiction. The Company hereby waives any such requirement of such a bond or undertaking to the fullest extent permitted by law.

 

20.   MODIFICATION AND WAIVER. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the Company and Indemnitee. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver.

 

21. NOTICES. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given (i) if delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third (3rd) business day after the date on which it is so mailed:

 

(a)  If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide in writing to the Company.

 

(b)  If to the Company, to:

 

BM Technologies, Inc.

201 King of Prussia Road, Suite 240

Radnor, PA 19087

Attention:  Bob Ramsey, CFO

Email: rramsey@bankmobile.com

 

 

With a copy, which shall not constitute notice, to

 

Nelson Mullins Riley & Scarborough, LLP

101 Constitution Ave, NW, Suite 900

New York, New York 10105

Washington DC 20001

Attention: Jonathan Talcott

Email: jon.talcott@nelsonmullins.com

 

or to any other address as may have been furnished to Indemnitee in writing by the Company.

 

22. APPLICABLE LAW AND CONSENT TO JURISDICTION. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, to the fullest extent permitted by law, the Company and Indemnitee hereby irrevocably and unconditionally: (a) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Delaware Court and not in any other state or federal court in the United States of America or any court in any other country; (b) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement; (c) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court; and (d) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum, or is subject (in whole or in part) to a jury trial. To the fullest extent permitted by law, the parties hereby agree that the mailing of process and other papers in connection with any such action or proceeding in the manner provided by Section 21 or in such other manner as may be permitted by law, shall be valid and sufficient service thereof.

 

12

 

 

23. IDENTICAL COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

 

24. MISCELLANEOUS. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

 

25. PERIOD OF LIMITATIONS. No legal action shall be brought and no cause of action shall be asserted by or in the right of the Company against Indemnitee, Indemnitee’s spouse, heirs, executors or personal or legal representatives after the expiration of two years from the date of accrual of such cause of action, and any claim or cause of action of the Company shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such two-year period; provided, however, that if any shorter period of limitations is otherwise applicable to any such cause of action such shorter period shall govern.

 

26. ADDITIONAL ACTS. If for the validation of any of the provisions in this Agreement any act, resolution, approval or other procedure is required to the fullest extent permitted by law, the Company undertakes to cause such act, resolution, approval or other procedure to be affected or adopted in a manner that will enable the Company to fulfill its obligations under this Agreement.

 

27. WAIVER OF CLAIMS TO TRUST ACCOUNT. Indemnitee hereby agrees that it does not have any right, title, interest or claim of any kind (each, a “Claim”) in or to any monies in the trust account established in connection with the Company’s initial public offering for the benefit of the Company and holders of shares issued in such offering, and hereby waives any Claim it may have in the future as a result of, or arising out of, any services provided to the Company and will not seek recourse against such trust account for any reason whatsoever.

 

28. MAINTENANCE OF INSURANCE. The Company shall use commercially reasonable efforts to obtain and maintain in effect during the entire period for which the Company is obligated to indemnify the Indemnitee under this Agreement, one or more policies of insurance with reputable insurance companies to provide the officers/directors of the Company with coverage for losses from wrongful acts and omissions and to ensure the Company’s performance of its indemnification obligations under this Agreement.  The Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director or officer under such policy or policies.  In all such insurance policies, the Indemnitee shall be named as an insured in such a manner as to provide the Indemnitee with the same rights and benefits as are accorded to the most favorably insured of the Company’s directors and officers.

 

[Signature Page Follows]

 

13

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Indemnity Agreement to be signed as of the day and year first above written.

 

  BM Technologies, Inc.
     
  By:  
    Name:                   
    Title:     
     
  INDEMNITEE
     
  By:  
    Name:  
    Address:  
     

 

[Signature page to Indemnity Agreement]

 

 

14

 

Exhibit 10.6

 

 

 

LOAN AGREEMENT

 

by and among

 

BM TECHNOLOGIES, INC. AND BMTX, INC.

as Borrowers

 

and

 

CUSTOMERS BANK

as Lender

 

Dated January 4, 2021

 

 

 

Walter Weir, Jr., Esquire

Weir & Partners LLP

1339 Chestnut Street, Suite 500

Philadelphia, PA 19107

wweir@weirpartners.com

Phone: (215) 665-8181 Fax: (215) 665-8191

 

 

 

TABLE OF CONTENTS

 

SECTION    
     
1. Definitions 1
     
2. Loan 5
     
3. Permanent Principal Reductions 6
     
4. Note 6
     
5. Interest/Late Charge 6
     
6. Payment of Principal and Interest 7
     
7. Prepayment 8
     
8. Advances Requests 8
     
9. Security Agreement 8
     
10. Loan Account 8
     
11. Application of Funds 8
     
12. Restricted Account 9
     
13. Closing 9
     
14. Conditions Precedent to Closing 9
     
15. Representations and Warranties 10
     
16. Affirmative Covenants 13
     
17. Negative Covenants 15
     
18. Events of Default 15
     
19. Remedies 16
     
20. Right of Set-Off 17
     
21. Cross-Default/Cross-Collateralization 17
     
22. Miscellaneous 17

 

i

 

EXHIBITS

 

Form of Borrowing Base Certificate EXHIBIT A
   
Note EXHIBIT B
   
Security Agreement EXHIBIT C
   
Perfection Certificate EXHIBIT D
   
Deposit Processing Services Agreement EXHIBIT E
   
Loan Advance Request EXHIBIT F

 

ii

 

LOAN AGREEMENT

 

THIS LOAN AGREEMENT is made this 4th day of January, 2021, by and among:

 

BM TECHNOLOGIES, INC. (formerly known as Megalith Financial Acquisition Corp.), a Delaware corporation with a place of business located at 201 King of Prussia Road, Suite 240, Radnor, PA 19087 ;

 

BMTX, Inc., a Pennsylvania business corporation and wholly owned subsidiary of BM Technologies, Inc., with a place of business located at 201 King of Prussia Road, Suite 240, Radnor, PA 19087 (BM Technologies, Inc. and BMTX, Inc. are referred to herein as the “Borrowers”); and

 

● CUSTOMERS BANK, a Pennsylvania state chartered bank with a place of business located at 99 Bridge Street, Phoenixville, PA 19460 (“Lender”).

 

B A C K G R O U N D:

 

Borrowers have applied to Lender for a Ten Million Dollar ($10,000,000.00) revolving line of credit to finance the MFAC Transaction and working capital needs. Lender is willing to make the Loan available to Borrowers under and subject to the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, the Borrowers and Lender, intending to be legally bound, hereby agree:

 

1. Definitions. As used in this Agreement, the following terms shall have the indicated meanings:

 

Agreement” means this Loan Agreement, as the same may be amended, modified, renewed, substituted and/or extended from time to time.

 

Anti-Terrorism Laws” means any laws relating to terrorism, trade sanctions programs and embargoes, import/export licensing, money laundering or bribery and corruption (including the FCPA and the Patriot Act), and any regulation, order, or directive promulgated, issued or enforced pursuant to such Laws, all as amended, supplemented or replaced from time to time.

 

Authorized Officer” means any of the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, or Secretary of either Borrower, acting singly.

 

Base Rate” means the variable per annum rate of interest so designated from time to time by the Lender as its prime rate (which rate is a reference rate and does not necessarily represent the lowest or best rate being charged to any customer) plus 150 basis points.

 

Borrowing Base means at any time 80% of Borrowers’ Qualified Accounts plus 100% of the collected amounts on deposit to the Restricted Account, but not to exceed $10,000,000 minus any permanent reduction to the Loan required under paragraph 3 of this Agreement.

 

Borrowing Base Certificate means each Borrowing Base Certificate to be delivered by the Borrowers to the Bank pursuant to this Agreement in substantially the form attached as Exhibit “A” executed by Borrowers’ Chief Financial Officers, with blanks appropriately completed as amended, supplemented or otherwise modified from time to time.

 

1

 

Business Day” means any day of the week other than Saturday, Sunday, or a day the Federal Reserve Bank of Philadelphia recognizes as a holiday.

 

Closing Date” means the date on which all of the Loan Documents are executed and delivered to Lender, which is contemplated to occur on or about January 4, 2021.

 

Code” means the Internal Revenue Code of 1986, as amended, or its predecessor or successor, as applicable, and any Treasury regulations, revenue rulings or technical information releases issued thereunder.

 

Collateral” means all property, rights and interests in property now owned or hereafter acquired by each Borrower in or upon which a Lien is at any time granted to Lender as security for the Obligations.

 

Default Rate” shall have the meaning given to that term in paragraph 5 of this Agreement.

 

Deposit Processing Services Agreement” means that certain Deposit Processing Services Agreement dated of even date herewith between Lender and BMTX, Inc., a copy of which is attached to this Agreement as Exhibit “E”.

 

Employee Benefit Plan” means any “employee benefit plan” within the meaning of Section 3(3) of ERISA to which any Borrower, or a subsidiary thereof, has an obligation to make a contribution, including as the result of being an ERISA Affiliate, other than a Plan, Multiemployer Plan.

 

Event(s) of Default” shall have the meaning assigned to that term in paragraph 18 of this Agreement.

 

ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any regulations issued thereunder by the Department of Labor or PBGC.

 

ERISA Affiliate” means (a) any corporation included with any Borrower in a controlled group of corporations within the meaning of Section 414(b) of the Code, (b) any trade or business (whether or not incorporated) which is under common control with any Borrower within the meaning of Section 414(c) of the Code, (c) any member of an affiliated service group of which any Borrower is a member within the meaning of Section 414(m) of the Code, and (d) any other group including any Borrower that is treated as a single employer within the meaning of Section 414(o) of the Code.

 

FCPA” means the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations promulgated thereunder.

 

2

 

Financing Statements” means any UCC-1 financing statements evidencing a first priority security interest in the Accounts, Accounts Receivable, Furniture, Fixtures, Equipment and other Collateral, as more particularly stated in this Agreement and the Security Agreement, and such other documents that Lender may reasonably request to perfect and maintain its security interests in the Collateral and to secure the Loan.

 

GAAP” means Generally Accepted Accounting Principles in effect from time to time.

 

Governmental Authority” means the government of the United States and any agency thereof, any state, province or political subdivision thereof, and includes any international, foreign, federal or state regulator or agency having jurisdiction over Lender or Borrowers.

 

Interest Rate” shall have the meaning given to that term in paragraph 5 of this Agreement.

 

LIBOR” means the One Month London Inter-Bank Offered Rate as published in the Money Section of the Wall Street Journal on the last U.S. business day of the month, but in no event shall LIBOR be less than 50 basis points.

 

Lien” means any mortgage, deed of trust, pledge, security interest, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory, judicial or other), or preference, priority, or other security agreement or preferential arrangement, charge, or encumbrance of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any Financing Statement under the Uniform Commercial Code or comparable law of any jurisdiction to evidence any of the foregoing).

 

Loan” means the Ten Million Dollar ($10,000,000.00) revolving line of credit made by Lender to Borrowers under this Agreement subject to any principal reduction thereof required under paragraph 3 of this Agreement.

 

Loan Advance Request” means a request for an advance on the Loan made in accordance with paragraph 8 of this Agreement using the form of that attached hereto as Exhibit “F”.

 

Loan Documents” means this Agreement, the Note, the Security Agreement and all of the other instruments, agreements and documents issued or to be issued in connection with any of the foregoing, as the same may be amended, modified, renewed, extended, substituted and/or extended from time to time.

 

Margin” means 375 basis points.

 

Margin Stock” shall have the meaning assigned to such term in Regulation U of the Board of Governors of the Federal Reserve System, as amended from time to time.

 

Material Adverse Effect” means any circumstance or event that, individually or collectively with other circumstances or events, may reasonably be expected to have a material adverse effect on (i) the financial condition or business of the Borrowers, as now conducted or as proposed to be conducted, or (ii) the ability of Borrowers to repay in a timely manner the Obligations or otherwise perform their obligations under the Loan Documents.

 

3

 

Maturity Date” means January 4, 2022, being the date that all sums evidenced by the Note and all of the other Obligations shall be due and owing to Lender.

 

MFAC Transaction” means the transaction reflected by the “Agreement and Plan of Merger” dated August 6, 2020, by and among Megalith Financial Acquisition Corp, MFAC Merger Sub, Inc., Customers Bank, and BankMobile Technologies, Inc., as amended.

 

MFAC Trust Account” mean the Trust Account referred to in the Agreement and Plan of Merger dated August 6, 2020, by and among Megalith Financial Acquisition Corp, MFAC Merger Sub, Inc., Customers Bank, and BankMobile Technologies, Inc., as amended.

 

Multiemployer Plan” means any employee benefit plan or arrangement described in Section 4001(a)(3) of ERISA that is maintained or contributed to by any Borrower or subsidiary of a Borrower for which any Borrower or subsidiary may have liability (including by being an ERISA Affiliate).

 

Note” means the promissory note issued by Borrowers to Lender to evidence the Loan in the form of Exhibit “B” to this Agreement.

 

Obligations” means all indebtedness, obligations and liabilities of Borrowers to Lender under the Loan Documents of every kind and description, direct or indirect, secured or unsecured, joint or several, absolute or contingent, due or to become due, including any overdrafts, whether for payment or performance, now existing or hereafter arising, whether presently contemplated or not, regardless of how the same arise, or by what instrument, agreement or book account they may be evidenced, or whether evidenced by any instrument, agreement or book account including, but not limited to, all loans (including any loan by modification, renewal or extension), all indebtedness, all undertakings to take or refrain from taking any action, all indebtedness, liabilities or obligations owing from Borrowers, and to others which Lender may have obtained by purchase, negotiations, discount, assignment or otherwise, and all interest, taxes, fees, charges, expenses and reasonable attorney’s fees chargeable to Borrowers or incurred by Lender under any of the Loan Documents.

 

Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56) The USA PATRIOT Act) and the rules and regulations promulgated thereunder.

 

PBGC” means the Pension Benefit Guaranty Corporation, or any governmental agency or instrumentality succeeding to the functions thereof.

 

Perfection Certificate” means the form of Perfection Certificate dated of even date herewith executed by Borrowers and delivered to Lender attached hereto as Exhibit “D”.

 

Person” means an individual, a partnership, a corporation, a limited liability company, a trust, an unincorporated association, a joint venture or any other entity or a Governmental Authority.

 

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Plan” means an employee pension benefit plan, other than a Multiemployer Plan, that is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and that is either (a) maintained by a Borrower for employees or for which any Borrower may have a liability to make a contribution, including as the result of being an ERISA Affiliate, or (b) maintained pursuant to a collective bargaining agreement, or other arrangement under which more than one employer makes contributions and to which a Borrower is making or accruing an obligation to make contributions or has within the preceding five years made or accrued such contributions.

 

Potential Event of Default” means any event or condition, which with the giving of notice or the passage of time or both, would constitute an Event of Default.

 

Qualified Accounts” means (a) accounts receivable owing from T-Mobile and any college or university that are under 120 days from date of invoice, (b) all other accounts receivable due from any other vendor that do not exceed 90 days from date of invoice or are aged less than 60 days from due date for invoice payment terms that are less than or equal to 30 days, (c) are not subject to dispute, counterclaim and/or setoff (contra-accounts), (d) are due from unrelated third party customers of the Borrowers; (e) are not subject to offset/lien of a bonding company, (f) are not part of a contractual progress billing, (g) are not deemed retainage, (h) are not payable by a foreign entity unless supported by credit insurance acceptable to Lender, (i) are not a bill & hold, (j) are not a finance charge, and (k) are not from a party related to the Borrowers (i.e. affiliate, subsidiary, employee, principal, etc.).

 

Restricted Account” means a demand deposit account maintained at Lender for Borrowers as a restricted account.

 

Security Agreement” means the form of Security Agreement issued by Borrowers to Lender in the form of Exhibit “C” to this Agreement.

 

Term” means the period from the date of this Agreement until the Maturity Date and, if applicable, to any date to which the Maturity Date may be extended.

 

Unless the context otherwise requires, capitalized terms not otherwise defined in this Agreement shall have the meanings given to those term in the Security Agreement

 

2. Loan. Subject to the terms and conditions of this Agreement:

 

(a) Loan. Lender hereby establishes for Borrowers a revolving line of credit in the principal amount of Ten Million Dollars ($10,000,000.00), less any principal reduction required under paragraph 3 of this Agreement.

(b) Use of Proceeds . The proceeds of the Loan may be used to fund in part a closing of the MFAC Transaction and for general working capital purposes, with advances to be made at Borrowers’ request subject to the provisions of paragraph 8 of this Agreement.

 

(c) Revolving Credit. Borrowers may borrow, repay and re-borrow on the Loan during the Term up to but not exceeding the Borrowing Base.

 

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(d) Borrowers' Account. All advances made on the Loan shall be deemed to be made for the account of both Borrowers irrespective of the use made by any Borrower of the funds so advanced.

 

(e) No Set Off. All amounts owing to Lender shall be paid in U.S. dollar funds without set-off, counterclaim or other deduction of any nature.

 

3. Permanent Principal Reductions. Upon closing of the Merger Transaction, fifty percent (50%) of the cash remaining in the MFAC Trust Account in excess of $10,000,000 shall constitute a permanent reduction of the maximum principal amount of the Loan. In addition, fifty (50%) of any new capital raised by either Borrower shall be applied as a permanent reduction of the principal of the Loan.

 

4. Note. The obligation of Borrowers to repay the Loan shall be evidenced by this Agreement, the Note and the other Loan Documents. Simultaneously with the execution and delivery of this Agreement, Borrowers shall execute and deliver the Note to Lender.

 

5. Interest/Late Charge.

 

(a) Interest Rate. Interest on the unpaid principal balance of the Note shall accrue at an adjustable rate equal to 30 Day LIBOR plus the Margin, per annum (the “Interest Rate”). The Interest Rate is subject to adjustment from time to time based on changes in LIBOR. Adjustments, if any, shall become effective on the 1st day of every month, beginning February 1, 2021.

 

(b) LIBOR Replacement. If the Lender determines in good faith (which determination shall be conclusive, absent manifest error) that: (1) by reason of circumstances affecting the London Interbank Eurodollar market, adequate and fair means do not exist for ascertaining LIBOR; (2) LIBOR does not accurately reflect the cost to the Lender of the Loan; or (c) a Regulatory Change (as hereinafter defined) shall, in the reasonable determination of the Lender, make it unlawful or commercially unreasonable for the Lender to use LIBOR as the index for purposes of determining the Interest Rate, then: (i) LIBOR shall be replaced with an alternative or successor rate or index chosen by the Lender in its reasonable discretion; and (ii) the Margin may also be adjusted by Lender in its reasonable discretion, giving due consideration to market convention for determining rates of interest on comparable loans. “Regulatory Change” shall mean a change in any applicable law, treaty, rule, regulation or guideline, or the interpretation or administration thereof, by the administrator of the relevant benchmark or its regulatory supervisor, any governmental authority, central bank or other fiscal, monetary or other authority having jurisdiction over Lender or its lending office.

(c) Conversion. Upon fifteen (15) Business Days prior written notice to Lender, Borrowers may elect to convert the Interest Rate from LIBOR plus the Margin to the Base Rate with any such change to become effective on the first day of the month following Borrowers’ notice to Lender of its election to effect a conversion.

 

(d) Interest Calculation. Interest shall be computed on a 365/360 basis by applying the ratio of the Interest Rate over a year of 360 days multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. All interest payable under this Note is computed using this method.

 

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(e) Late Charge. In the event any payment of interest and/or principal owing on the Loan is not made within ten (10) days of its due date, Borrowers will pay to Lender a late charge in an amount equal to five (5%) percent of any such past due amount.

 

(f) Default Rate. Upon the occurrence and during the continuance of any Event of Default under the Loan Documents, or non-payment upon demand after an Event of Default, the rate of interest on the unpaid principal balance shall, at the option of Lender, be five percent (5%) in excess of the rate of interest provided above (the “Default Rate”). Borrower acknowledges that: (1) the Default Rate is a material inducement to Lender to make the Loan; (2) Lender would not have made the Loan in the absence of the agreement of Borrower to pay the Default Rate; (3) the Default Rate represents compensation for the increased risk to Lender that the Loan might not be repaid in full; and (4) the Default Rate is not a penalty and represents a reasonable estimate of (i) the cost to Lender in allocating its resources (both personnel and financial) to the on-going review, monitoring, administration and collection of the Loan, and (ii) compensation to Lender for losses that are difficult to ascertain.

 

(g) Interest Accrual. Interest shall continue to accrue on the principal of the Loan at the rates specified above notwithstanding any demand for payment, acceleration and/or the entry of judgment against Borrowers until all Obligations have been irrevocably paid in full.

 

(h) Maximum Rate. In no event shall interest, charges or other amounts that are contracted for, charged or received by Lender pursuant to any Loan Documents and that are deemed interest under applicable law (“interest”) exceed the highest rate permissible under applicable law (“maximum rate”). If, in any month, any interest rate, absent the foregoing limitation, would have exceeded the maximum rate, then the interest rate for that month shall be the maximum rate and, if in a future month, that interest rate would otherwise be less than the maximum rate, then the rate shall remain at the maximum rate until the amount of interest actually paid equals the amount of interest which would have accrued if it had not been limited by the maximum rate. If, upon payment in full of the Obligations, the total amount of interest actually paid under the Loan Documents is less than the total amount of interest that would, but for this paragraph, have accrued under the Loan Documents, then Borrowers shall, to the extent permitted by applicable law, pay to Lender, (1) the lesser of (i) the amount of interest that would have been charged if the maximum rate had been in effect at all times, or (ii) the amount of interest that would have accrued had the interest rate otherwise set forth in the Loan Documents been in effect, minus the amount of interest actually paid under the Loan Documents. If a court of competent jurisdiction determines that Lender has received interest in excess of the maximum amount allowed under applicable law, such excess shall be deemed received on account of, and shall automatically be applied to reduce, Obligations other than interest (regardless of any erroneous application thereof by Lender), and upon payment in full of the Obligations, any balance shall be refunded to Borrowers.

 

6. Payment of Principal and Interest.

 

(a) Interest. Interest shall be paid monthly in arrears on the first day of each month during the Term commencing on February 1, 2021.

 

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(b) Principal. The principal of the Loan shall be repaid in full on the Maturity Date.

 

(c) Auto Debit. Each Borrower irrevocably authorizes Lender to auto-debit Borrowers’ deposit accounts at Lender for the monthly payment of interest due on the Loan.

 

7. Prepayment. Borrowers may prepay the Loan, in whole or in part, without premium or penalty.

 

8. Advances Requests.

 

(a) Advance Requests. Requests for advances on the Loan (an “Advance Request”) shall be made by the submission by Borrowers to Lender of a Loan Advance Request which shall be accompanied by a current Borrowing Base Certificate.

 

(b) Limitation on Advances. Notwithstanding any provision to the contrary in this Agreement or in any of the other Loan Documents, at no time shall the aggregate principal amount of indebtedness outstanding at any one time under the Loan exceed the Borrowing Base. If at any time the aggregate principal amount of indebtedness outstanding under the Loan exceeds the Borrowing Base for any reason, Borrowers shall immediately repay the amount of such excess to Lender in immediately available funds.

 

(c) Advance Representations. Each Loan Advance Request shall constitute a representation by each Borrower that there are no Events of Default or Potential Events of Default that exist as of the submission of a Loan Advance Request, and that each of the representations and warranties set forth in this Agreement are accurate, true, and correct in all material respects as of the date of each Loan Advance Request.

 

9. Security Agreement. Simultaneously with the execution and delivery of this Agreement, Borrowers shall execute and deliver to Lender the Security Agreement.

 

10. Loan Account. Lender shall open and maintain on its books a loan account (the “Loan Account”) with respect to the Loan, advances made, repayments, the computation and payment of interest and fees, if any, and the computation and final payment of all other amounts due and sums paid to Lender hereunder. Except in the case of error in entry or computation, and as long as advances and repayments are made in accordance with the terms of this Agreement, the Loan Account shall be conclusive and binding as to the amount at any time due to Lender from Borrowers under this Agreement.

 

11. Application of Funds. All sums realized by Lender on account of the Obligations, from whatever source received, shall be applied first, to any reasonable fees and expenses (including reasonable attorneys’ fees) incurred by Lender, second, to accrued and unpaid interest and late charges, and then to principal. Borrowers waive and release any right to require Lender to collect any of the Obligations from any collateral under any theory of marshalling of assets or otherwise. Borrowers authorize Lender to apply the proceeds of any collateral in which each Borrower has/have any right, title or interest against any of the Obligations in any manner or order that Lender may determine.

 

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12. Restricted Account. Lender shall establish on its books a demand deposit account for Borrowers into which Borrowers may deposit funds. Withdrawals from the Restricted Account may only be made on five (5) Business Days' prior written notice to Lender, and will be permitted only to the extent that any such withdrawal, in whole or in part, will not cause the principal amount of the Loan to exceed the Borrowing Base. Lender shall, at all times, retain its right of setoff against the Restricted Account.

 

13. Closing. Closing hereunder will take place on the Closing Date at the offices of Weir & Partners LLP, Fifth Floor, The Widener Building, One South Penn Square, Philadelphia, PA 19107, or at such other location as the parties may agree.

 

14. Conditions Precedent to Closing. Lender’s obligation to make any advance of funds on the Loan on or after the Closing Date is subject to satisfaction of the following conditions precedent:

 

(a) Loan Documents. The Loan Documents, satisfactory in form, terms and substance to Lender, shall have been executed and delivered to Lender on the Closing Date, and shall be in full force and effect, and Borrowers shall have delivered such other instruments, documents and certificates as Lender or its counsel shall reasonably require.

 

(b) Entity Documents. Lender shall have received, on or prior to the Closing Date, such organizational documents, resolutions, incumbency certificates, subsistence certificates and any other documents and certificates as are required by Lender with respect to each Borrower. Such organization documents include, but are not limited to, a copy of each Borrower’s certificate of incorporation and by-laws, certified as of the Closing Date by an authorized officer of each Borrower in a manner designated by Lender.

 

(c) Identification. Each Authorized Officer shall provide two forms of identification acceptable to Lender.

 

(d) Borrowing Base Certificate. Borrowers shall have delivered to Lender an initial Borrowing Base certificate.

 

(e) Insurance. Borrowers shall have delivered to Lender, on or prior to the Closing Date, evidence, in form and substance satisfactory to Lender, that the Borrower are adequately insured by insurance carriers and amounts acceptable to Lender.

 

(f) Financial Statements. Each Borrower shall have delivered to Lender, on or prior to the Closing Date, the financial statements, tax filings, and reports described herein or otherwise requested by Lender, each of which shall be in accordance with GAAP and otherwise in form and substance satisfactory to Lender, and no Material Adverse Effect shall have occurred since the date of the most recent financial statements so delivered to Lender.

 

(g) Perfection Certificate. Each Borrower shall have delivered to Lender the Perfection Certificate.

 

(h) Merger. Lender shall have received, on or before the Closing Date, evidence of the successful completion of the MFAC Transaction including, but not limited to, an opinion of counsel that the MFAC Transaction has successfully closed in accordance with the Merger Agreement, as amended.

 

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(i) Legal Opinion. An opinion letter from Borrowers’ counsel, in form reasonably satisfactory to Lender, which opines, inter alia, that: Each Borrower is legally constituted, in good standing and authorized to enter into the transactions contemplated by this Agreement; that the execution and delivery of the Loan Documents and their terms do not violate any provisions of the governing organizational documents of each Borrower; that all Loan Documents executed by Borrowers are valid, binding, and enforceable in accordance with their terms (subject to customary exceptions). The opinion letter shall also address any other matters on which Lender reasonably requires counsel to Borrowers to opine.

 

(j) Representations and Warranties. All of the representations and warranties in paragraph 15 of this Agreement shall be true and correct in all material respects as of the Closing Date.

 

(k) Other Documents and Conditions. Borrowers shall have delivered to Lender such other documents, and satisfied such other conditions, as may be reasonably required by Lender pursuant to the terms of this Agreement or any other Loan Document.

 

15. Representations and Warranties. Borrowers represent and warrant to Lender that:

 

(a) Authority, Execution and Binding Effect. Each Borrower is an entity duly organized, validly existing, and in good standing under the laws of its jurisdiction; has all necessary power and authority to transact the business in which it is engaged, including to own, lease and otherwise deal with its assets; and is duly qualified and in good standing or subsisting in each other jurisdiction in which the conduct of such business requires such licensing or such qualification. Borrowers have all necessary capacity, power and authority to enter this Agreement and to execute, deliver and perform this Agreement and all of the other Loan Documents and any other document executed in connection with this Agreement, as applicable, all of which have been duly authorized by all proper and necessary action by Borrowers. This Agreement, and all of the other Loan Documents signed by Borrowers, have been duly and validly executed and delivered and constitute the legal, valid and binding obligations of each Borrower, enforceable against it in accordance with their respective terms, except as their enforceability may be limited by bankruptcy, insolvency or other equitable principals of general application relating to or affecting the enforcement of creditor rights.

 

(b) Litigation. There are no actions, suits or proceedings pending, or to Borrower’s knowledge, threatened, against or affecting any Borrower, at law or in equity, or before or by any governmental authority which, if adversely determined, could have a Material Adverse Effect.

 

(c) Conflict with Other Instruments, etc. Neither the execution and delivery by Borrowers of this Agreement or any of the other Loan Documents, or the other instruments, documents and agreements contemplated or required hereby or thereby, nor consummation of the transactions herein or therein contemplated by Borrowers, nor compliance by each Borrower with the terms, conditions and provisions hereof or thereof, will conflict with or result in a breach of any of the terms, conditions or provisions of any law or regulation, order, writ, injunction or decree of any court or governmental instrumentality or any agreement or instrument to which Borrowers are a party, or by which they or any of their properties is known by them to be bound, or to which they or any of their properties is known by them to be subject (other than an agreement or instrument with or in favor of Lender), or constitute a default thereunder, or result in the creation or imposition of any lien, other than liens in favor of Lender. No consent, license, approval or authorization of, or registration, declaration or filing with, any court, governmental body or authority or other person, which has not been obtained or made, is required in connection with the valid execution, delivery or performance of this Agreement, or any of the other Loan Documents or any other documents required by this Agreement, or in connection with any of the transactions contemplated thereby.

 

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(d) Title to Properties. Each Borrower has good and marketable title to all of its assets, subject only to all those matters disclosed in the financial statements delivered to Lender, or as otherwise permitted herein.

 

(e) First Lien. The security interests granted under the Security Agreement shall be at all times during the Term a first priority security interest subject to no other Liens whatsoever.

 

(f) Tax Returns. Borrowers have (1) filed all tax returns which are required to be filed by them and have paid, or made adequate provision for the payment of, all taxes which have or may become due pursuant to said returns or to assessments received; and (2) neither Borrower knows of any material additional assessments for which adequate reserves have not been established.

 

(g) Financial Statements. Borrowers have heretofore furnished to Lender certain financial statements, tax filings, and reports all of which are true, complete and present fairly the financial condition of each Borrower in accordance with GAAP as of the date so stated in all material respects and the results of its operations and transactions for the period covered thereby, and accurately reflect all liabilities as of the date so stated, including contingent liabilities.

 

(h) No Event of Default; Compliance. No event has occurred, and no condition exists, which would constitute an Event of Default or, to the knowledge of each Borrower, a Potential Event of Default. Borrowers are not, to their knowledge, in violation of any term of any agreement or other instrument to which they are a party or by which they are bound, which violation would have a Material Adverse Effect. Neither Borrower is in violation of any order, writ, judgment, injunction or decree of any court of competent jurisdiction. To each Borrower’s knowledge, neither Borrower is in violation of any statute, rule or regulation of any competent governmental authority, the violation of which could have a Material Adverse Effect. To each Borrower’s knowledge, there exists no fact or circumstance not disclosed in this Agreement or in the documents furnished in connection herewith (other than general economic conditions) which does, or in the future could, have a Material Adverse Effect.

 

(i) Disclosure. There is no fact known to Borrowers which has a Material Adverse Effect or in the future is likely to have a Material Adverse Effect, which Borrowers have not disclosed to Lender. Borrowers have made full and true disclosure of all information, financial and otherwise, requested by Lender, in connection with the transactions contemplated hereby known to Borrower.

 

(j) FCPA. Each Borrower has instituted and will maintain policies and procedures designed to promote and achieve continued compliance with the FCPA and other applicable Anti-Terrorism Laws.

 

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(k) ERISA. Other than as previously disclosed to Lender in writing, no Borrower has any Plan or Multiemployer Plan. Each Borrower is in full compliance with the material requirements of all applicable law, including ERISA, relating to each Plan and/or Multiemployer Plan. No fact or situation exists that could reasonably be expected to result in a Material Adverse Effect in connection with any Employee Benefit Plan, Plan or Multiemployer Plan. No Borrower has any termination liability or withdrawal liability in connection with a Plan or Multiemployer Plan.

 

(l) Environmental Matters. Other than as previously disclosed to Lender in writing, Borrowers are not in violation of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Superfund Amendments and Reauthorization Act of 1986, the Resource Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984, the Clean Water Act, the Toxic Substances Control Act and the Clean Air Act, or any rule or regulation promulgated pursuant to any of the foregoing statutes or amendments to the foregoing statutes, or any other applicable environmental law, statute, rule, regulation or ordinance, which violation would have a Material Adverse Effect.

 

(m) Federal Reserve Regulations. Neither Borrower is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. No part of the proceeds of the Loan will be used, directly or indirectly, for a purpose which violates any law, rule or regulation of any governmental body, including without limitation the provisions of Regulations U or X of the Board of Governors of the Federal Reserve System, as amended. No part of the proceeds of the Loan will be used, directly or indirectly, to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock.

 

(n) Solvency. Each Borrower is solvent as defined in any applicable state or federal statute, nor will either Borrower be rendered insolvent by the execution and delivery of this Agreement and the other Loan Documents to Lender. After making the Loan, each Borrower reasonably expects to (1) be able to pay its debts as they become due, (2) have funds and capital sufficient to carry on its business and all businesses in which it is about to engage, and (3) own property having a value at both fair valuation and at fair salable value in the ordinary course of each Borrower’s business greater than the amount required to pay its debts as they become due.

 

(o) Prohibited Person Compliance. Borrowers warrant, represent and covenant that neither Borrower nor any of their respective affiliates is or will be a person (1) that is listed in the Annex to, or is otherwise subject to the provisions of, Executive Order 13224 issued on September 24, 2001 (“EO13224”), (2) whose name appears on the United States Treasury Department’s Office of Foreign Assets Control most current list of “Specifically Designated National and Blocked Persons,” (3) who commits, threatens to commit or supports “terrorism,” as defined in EO13224, or (4) who is otherwise affiliated with any entity or person listed above (any and all parties or persons described in subparts (1) through (4) above are herein referred to as a “Prohibited Person”). Each Borrower covenants and agrees that neither Borrower nor any of their respective affiliates will knowingly (i) conduct any business, nor engage in any transaction or dealing, with any Prohibited Person, including, but not limited to, the making or receiving of any contribution of funds, goods, or services to or for the benefit of a Prohibited Person, or (ii) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in EO13224. Borrowers further covenant and agree to deliver (from time to time) to Lender any such certification or other evidence as may be requested by Lender in its sole and absolute discretion, confirming each such representation.

 

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(p) Survival. All of the representations and warranties of each Borrower as set forth in this Agreement shall survive the making of this Agreement and shall be continuing until all Obligations hereunder are paid in full.

 

16. Affirmative Covenants. Until the Obligations have been paid in full and fully performed by each Borrower under the Loan Documents:

 

(a) Borrowing Base Certificate. Borrowers shall deliver to Lender a current Borrowing Base Certificate on and as of the Closing Date, and on the 15th day of each succeding month thereafter.

 

(b) Financial Statements. Borrowers shall furnish to Lender, at their sole cost and expense, in form and substance satisfactory to Lender, such financial statements, reports and additional information as Lender may reasonably request from time to time regarding the financial and business affairs of each Borrower. Without limiting the generality of the forgoing, Borrowers shall deliver to Lender their audited financial statements within 120 days of each Borrowers' fiscal year end.

 

(c) Maintenance of Insurance. During the Term, Borrowers shall, at their sole expense, obtain and maintain throughout the Term, policies of commercial general liability insurance which may include umbrella insurance, including contractual liability, having such terms and such limits as are reasonably required by Lender from time to time, but in any event an aggregate limit of not less than Seven Million Dollars ($7,000,000).

 

(d) Payment of Taxes. Borrowers shall pay all entity taxes, federal and state income taxes, and all other taxes, fees, assessments and governmental charges generally that are at any time levied or imposed upon their properties, assets, income or profits before the same shall become delinquent and also all lawful claims of any nature or kind which, if unpaid, might or could become a lien or charge upon their properties, assets, income, or profits, unless the validity thereof is being contested in good faith by Borrowers by appropriate proceedings, diligently conducted to the reasonable satisfaction of Lender.

 

(e) Maintenance of Properties, etc. Each Borrower shall maintain and preserve their respective assets which are necessary or useful in the proper conduct of their businesses in good working order and condition, ordinary wear and tear excepted.

 

(f) Keeping of Records and Books of Account. Borrowers shall keep adequate records and books of account, in which complete entries will be made in accordance with each Borrower’s prior practice reflecting all financial transactions of each Borrower.

 

(g) Compliance with Laws. Each Borrower shall comply in all material respects with the applicable requirements of all Governmental Authorities known by each Borrower to be applicable to them.

 

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(h) Notices of Events of Default and Adverse Changes. Each Borrower shall promptly give Lender notice, in writing, of: (1) any Event of Default hereunder or under any other agreements to which Borrower is a party, which default is reasonably likely to have a Material Adverse Effect, promptly after the same becomes known to Borrowers; (2) all litigation or proceedings before any court or governmental authority affecting Borrowers or their assets which are reasonably likely to have a Material Adverse Effect if adversely determined; or (3) any other event which is reasonably likely to have a Material Adverse Effect.

 

(i) Access to Books and Inspection. Borrowers shall, upon reasonable (but not less than five (5) Business Days) written notice, give any representative of Lender reasonable access to, and permit such representative to examine, copy or make extracts from, any and all books, records and documents in the possession of Borrowers relating to their business, all at such times and as often as Lender may reasonably request.

 

(j) Further Assurances. Promptly upon request by Lender, each Borrower shall execute and deliver and file and record and refile and rerecord such financing statements, assignments and other such documents in such manner, at such time or times and in such place or places as may be required by law and to cause to be taken such other actions as may be required by law or as may be reasonably requested by Lender in order to cause the liens and security interests granted under any security documents to be, at all times, valid, perfected and enforceable against Borrowers and all third parties.

 

(k) Compliance with Licensing Bodies; Maintenance of Standing. Borrowers shall maintain all certificates of compliance and authority and licenses that are necessary or required by any governmental authority or licensing authority having jurisdiction over each Borrower. Borrowers will maintain their existing entity status in good standing or subsistence, and maintain their existing rights and franchises, in their respective jurisdiction of formation, and remain or become duly licensed or qualified and in good standing or subsisting in each jurisdiction in which the conduct of their business requires such qualification or licensing, except where the failure to be so licensed or qualified would not have a Material Adverse Effect.

 

(l) Deposit Accounts. Each Borrower shall maintain its primary deposit accounts with Lender during the Term of the Loan.

 

(m) Certification. Borrowers shall certify, from time to time, at the request of Lender, that no Event of Default or, to the best of their knowledge, no Potential Event of Default has occurred and is continuing.

 

(n) Litigation. Borrowers shall promptly notify Lender in writing as soon as any Borrower has actual knowledge thereof, and furnish or cause to be furnished to Lender such information regarding the same as Lender may request of: (1) the institution or filing of any litigation, action, suit, claim or counterclaim to which Borrower is a party, or (2) any administrative proceeding against, or investigation of, Borrower by or before any regulatory body or governmental agency, where (A) the outcome of such litigation, action, suit, claim, counterclaim, administrative proceeding or investigation may have a Material Adverse Effect, or (B) such litigation, action, suit, claim, counterclaim, administrative proceeding or investigation questions the validity of this Agreement or any Loan Document, or any action taken or to be taken pursuant to the foregoing; and furnish or cause to be furnished to Lender such information regarding the same as Lender may reasonably request, which information Lender will hold in confidence.

 

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17. Negative Covenants. Each Borrower covenants and agrees with Lender:

 

(a) Borrowed Money. Without the prior written consent of Lender, Borrowers shall not create, incur, assume or suffer to exist any liability for borrowed money other than from Lender, and trade payables incurred in the ordinary course of business.

 

(b) No Dividends. During the Term of the Loan, neither Borrower shall issue any dividends or make any distributions to shareholders.

 

(c) Liens. Without the prior written consent of Lender, Borrowers shall not, at any time, create, incur, assume, or suffer to exist any lien on their assets of any character, tangible or intangible, now owned or hereafter acquired, or upon the income or profits therefrom, or agree or become liable to do so, except liens in favor of Lender and liens with respect to taxes not delinquent or being contested in good faith and by appropriate proceedings.

 

(d) Negative Pledge. Borrowers shall not, without the prior written consent of Lender, create, incur, assume or suffer to exist any pledge, lien, security interest, assignment, hypothecation, deposit assignment or other encumbrance of any nature, upon or with respect to any assets or properties of Borrowers, and Borrowers shall not guaranty any debts of others.

 

(e) Notice of Changes. Borrowers shall not change their respective names, principal places of business, records, office, its management, or registered agent without notifying Lender, in writing, thirty (30) days prior to such action and executing such additional documentation as Lender may reasonably request to maintain its security for the Loan.

 

(f) Acquisitions. Borrowers shall not acquire all or substantially all of the property or assets of any Person during the Term.

 

18. Events of Default. An “Event of Default” means the occurrence or existence of one or more of the following events or conditions continuing beyond the expiration of any applicable grace or cure period (whatever the reason for such Event of Default and whether voluntary, involuntary or effected by operation of law):

 

(a) Any Borrower shall fail to pay any amount owing to Lender under the Note or any other Loan Document promptly when due;

 

(b) Any representation or warranty made by or on behalf of either Borrower, or any other information furnished by either Borrower, in this Agreement or any other Loan Document or in any certificate, financial statement or other document furnished to Lender pursuant to the provisions hereof or of any other Loan Document, shall prove to have been false or misleading in any material respect when made or furnished;

 

(c) Either Borrower shall default in the performance or observance of any non-monetary covenant, condition or provision contained in this Agreement or any other Loan Document for a period of thirty (30) days after receipt of written notice specifying such failure; provided, however, that in the event such default cannot be cured within such thirty (30) day period and Borrowers shall have commenced to cure such default within such thirty (30) day period, and thereafter proceeds diligently to cure the same, such thirty (30) day period shall be extended for so long as it shall require a Borrower, in the exercise of due diligence, to cure such default;

 

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(d) Any lien, charge or encumbrance on, or any security interest or other defect in the title to the either Borrowers’ property shall be created, arise or otherwise come into existence, unless such lien, charge or security interest shall be discharged within thirty (30) days after the date of filing thereof or Borrowers shall contest the same in good faith and post a bond or other security reasonably satisfactory to Lender in an amount sufficient to prevent the enforcement of any such lien against their properties together with any costs or penalties associated therewith;

 

(e) If a final judgment which, with other final judgments against either Borrower would reasonably be expected to have a Material Adverse Effect, shall have been entered against either Borrower or any of their property, and if, within thirty (30) days of the entry thereof, such judgment shall not have been discharged or execution thereof stayed pending appeal, or if, within thirty (30) days after the expiration of any such stay, such judgment shall not have been discharged or bonded;

 

(f) A proceeding is instituted in a court of competent jurisdiction seeking a decree or order for relief in respect of either Borrower in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of either Borrower, or for the winding-up or liquidation of the affairs of such, and such proceeding shall remain undismissed or unstayed and in effect for a period of ninety (90) consecutive days or such court shall enter a decree or order granting the relief sought in such proceeding;

 

(g) Either Borrower shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, shall consent to the entry of an order for relief in an involuntary case under any such law, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of either Borrower’s properties, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any action in furtherance of any of the foregoing;

 

19. Remedies. Upon the occurrence of any Event of Default which is not cured within any applicable cure period, Lender may do any or all of the following: (a) accelerate the maturity of the Note and all amounts payable hereunder and demand immediate payment thereof; (b) pursuant to the Warrant of Attorney contained in the Note, CONFESS JUDGMENT against Borrower and/or commence any other legal action on the Note and the other Loan Documents; (c) exercise its right of set-off as set forth in paragraph 20 below; (d) exercise its rights as a secured party under the Security Agreement and the Uniform Commercial Code; and (e) begin accruing interest at the Default Rate; provided however, no interest shall accrue in excess of the maximum amount then allowed by law.

 

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20. Right of Set-Off. Upon the occurrence of an Event of Default, Lender shall have the right, in addition to all other rights and remedies available to it, without notice to Borrowers, to set off against and to appropriate and apply to the unpaid balance of the Note, and all other obligations of Borrower hereunder and under the Loan Documents, any debt owing to Borrowers, and any other funds held in any manner for the account of Borrowers by Lender including, without limitation, all funds in all deposit accounts now or hereafter maintained by Borrowers for their own account with Lender, and Lender is hereby granted a security interest in and lien on all such assets (including all such deposit accounts) for such purpose. Such right shall exist whether or not Lender shall have made any demand under this Agreement or the Note, and whether the Note is matured or unmatured. Borrower hereby confirms Lender’s right of banker’s lien and set-off, and nothing in this Agreement shall be deemed a waiver or prohibition thereof.

 

21. Cross-Default/Cross-Collateralization. The Loan, and all collateral described in the Loan Documents shall be cross-defaulted and cross collateralized with all terms, conditions and provisions of all other obligations of Borrowers to Lender whether now existing or hereafter arising. A default in the performance of any obligation of Borrowers under any other agreement with Lender shall constitute an Event of Default under the Loan Documents. All collateral security described in the Loan Documents shall constitute collateral security for any other obligation of Borrowers to Lender. All collateral security granted by Borrower to secure any other obligation to Lender shall constitute collateral security for all of the Obligations.

 

22. Miscellaneous.

 

(a) Business Days. Except as otherwise provided herein, whenever any payment or action to be made or taken hereunder or under the Note shall be stated to be due on a day which is not a Business Day, such payment or action shall be made or taken on the next following Business Day and such extension of time shall be included in computing interest or fees, if any, in connection with such payment or action.

 

(b) Amendments and Waivers. This Agreement may be modified or amended only by a written agreement entered into by all of the parties to this Agreement, including an officer of Lender, and may be waived only by a written waiver signed by the party to be charged thereby. No waiver, modification or amendment shall extend to or affect any obligation not expressly waived, modified or amended, or impair any right of parties related to such obligation. Any party claiming a waiver of the provisions of this subparagraph (b) shall have the burden of proving any such waiver by clear and convincing evidence.

 

(c) No Implied Waiver; Cumulative Remedies. No failure on the part of Lender to exercise, and no delay in exercising, any right, power or remedy hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right. The remedies provided herein and in any other Loan Documents shall be cumulative and not exclusive of any rights or remedies provided by law.

 

(d) Expenses. Borrowers shall pay: (1) all reasonable, documented and out-of-pocket expenses of Lender and any other expenses incurred by Lender in connection with the preparation, execution and delivery of any future amendments to this Agreement, the Note or any other Loan Documents (including the reasonable, documented and out-of-pocket fees and expenses of Lender’s counsel); (2) all fees, including the filing fees for the recording or re-recording of any future financing statements; (3) any other fees reasonably incurred by Lender in connection with the Loan in accordance with the terms hereof for inspections/investigations performed by Lender after the date hereof upon the occurrence of an Event of Default; and (4) reasonable, documented and out-of-pocket costs of collection (including reasonable, documented and out-of-pocket counsel fees) if an Event of Default occurs with respect to the payment of the Loan or any other sums payable to Lender under the Loan Documents. Borrowers’ obligations under this subparagraph (d) shall survive the payment in full of the Note.

 

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(e) Notices. Any notice required to be given by either party to the other party under the terms of the Loan Documents shall be in writing, and shall be delivered personally as evidenced by receipt or given by mailing, certified mail or registered mail, return receipt requested, postage prepaid or by Federal Express, Courier, or similar overnight courier which delivers only upon signed receipt of the addressee and, except as may be expressly otherwise provided in the Loan Documents, any such notice or other communications shall be deemed given upon execution of an acknowledgement of receipt by the recipient or, in any event, three (3) days after being sent properly addressed to the addresses set forth above. In the case of Lender, notices shall be sent simultaneously to Weir & Partners, LLP, The Widener Building, Suite 500, 1339 Chestnut Street, Philadelphia, PA 19107, to the attention of Walter Weir, Jr., Esquire. In the case of Borrowers, notices shall be sent simultaneously to Peter Strand, Esquire, Nelson Mullins Riley & Scarborough, 101 Constitution Avenue, NW, Suite 900, Washington, D.C. 20001.

 

(f) Accounting. Unless otherwise specified herein, all financial statements and reports furnished to Lender hereunder or under any other Loan Document shall be prepared in accordance with each Borrower’s prior practice unless otherwise noted on the statement received by Lender.

 

(g) No Third Party Rights. Nothing in this Agreement, whether express or implied, shall be construed to give to any person other than the parties hereto any legal or equitable right, remedy or claim under or in respect of this Agreement, which is intended for the sole and exclusive benefit of the parties hereto.

 

(h) Reliance and Survival. Lender has relied upon all representations, warranties, covenants and agreements made in this Agreement and in all the other Loan Documents in making the Loan, and all representations, warranties, covenants and agreements of Borrowers contained in this Agreement or made in writing in connection with this Agreement shall survive the execution and delivery of this Agreement, the making of the Loan hereunder, and the issuance of the Note, and shall continue in full force and effect until payment in full of the Loan and until all of the Obligations have been fully satisfied.

 

(i) Severability. Every provision of this Agreement and the other Loan Documents is intended to be severable. If any term or provision of the Loan Documents shall be invalid, illegal or unenforceable for any reason, the validity, legality and enforceability of the remaining provisions shall not be affected or impaired thereby. Any invalidity, illegality or unenforceability of any term or provision of the Loan Documents in any jurisdiction shall not affect the validity, legality or enforceability of any such term or provision in any other jurisdiction.

 

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(j) Joint and Several Obligations. Notwithstanding anything herein to the contrary, all Obligations of each Borrower under this Agreement and the other Loan Documents are joint and several.

 

(k) Headings. Paragraph and subparagraph headings in this Agreement are included for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

 

(l) Governing Law; Jurisdiction and Waiver of Jury Trial. This Agreement will be interpreted, and the rights and liabilities of the parties hereto determined in accordance with the laws of the Commonwealth of Pennsylvania, excluding its conflict of laws rules. Borrowers hereby irrevocably consent to the exclusive jurisdiction of any state or federal court located in Chester County, Pennsylvania; provided, however, that nothing contained in this Agreement will prevent Lender from bringing any action, enforcing any award or judgment or exercising any rights against Borrowers, against any security or against any property of Borrowers within any other county, state or other foreign or domestic jurisdiction. The parties acknowledge and agree that the venue provided above is the most convenient forum for both Lender and Borrowers. The parties waive any objection to venue and any objection based on a more convenient forum in any action instituted under this Agreement in Chester County, Pennsylvania. EACH BORROWER AND LENDER HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHTS THEY MAY HAVE TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, COUNTERCLAIM OR OTHER LITIGATION WHATSOEVER ARISING DIRECTLY OR INDIRECTLY OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT OR ANY LOAN DOCUMENTS OR THE RELATIONSHIP CREATED THEREBY. BORROWERS AND LENDER ACKNOWLEDGE THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.  

 

(m) WAIVER OF CONSEQUENTIAL DAMAGES, ETC. To the fullest extent permitted by applicable law, Borrowers shall not assert, and hereby waive, any claims against Lender and/or any of its directors, officers, employees and agents, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Documents or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, or the use of the proceeds of the Loan. Neither Lender nor any of its directors, officers, employees and agents, shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.

 

(n) Successors and Assigns. This Agreement and the other Loan Documents shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Borrowers shall not assign or transfer their rights hereunder or any interest herein or delegate their duties hereunder or thereunder.

 

(o) Participation. Lender may at any time sell, assign, transfer or grant participations in, or otherwise dispose of Lender’s right, title and interest in, the Loan and the Loan Documents to any affiliate of Lender or to commercial banks or other institutional lenders in the United States or their affiliates, at no expense to Borrowers.

 

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(p) Exculpation. Borrowers hereby waive, release and discharge any and all rights, causes of action, claims or demands, liquidated or unliquidated, known or unknown, fixed or contingent, which they now have against Lender, Lender’s subsidiaries or against any of Lender’s directors, officers, agents, attorneys and employees relating to, or in connection with, the Loan Documents, except those relating to or resulting from the willful misconduct of Lender or its directors, officers, agents, attorneys and employees. Borrowers intend that this waiver, release and discharge shall apply to all such rights, causes of action, claims and demands that arise or come into existence prior to the execution and delivery of this Agreement.

 

(q) Drafting of Documents. Lender and Borrowers hereby acknowledge and agree that all of the terms, conditions, covenants and provisions of this Agreement and the Loan Documents have been negotiated in good faith, and further agree that the rule of law that states that any ambiguity or contradictions between the terms therein will be resolved against the drafter of such contract is hereby waived and shall not apply to the interpretation of this Agreement or any of the other Loan Documents. To the extent that there are any conflicts among the other Loan Documents, the terms of this Agreement shall prevail.

 

(r) Indemnity. Borrowers agree, whether or not any of the transactions contemplated in the Loan Documents shall be consummated, to pay, assume liability for, and indemnify, protect, defend, save and keep harmless Lender from and against, any and all liabilities, obligations, losses, damages, settlements, claims, actions, suits, penalties, costs and expenses (including, but not limited to, reasonable legal and investigative fees and expenses) of whatsoever kind and nature including, but not limited to, claims based upon negligence, strict or absolute liability, liability in tort, latent or other defects (whether or not discoverable), and any claims for patent, trademark or copyright infringement which may from time to time be imposed on, incurred by or asserted against Lender (whether or not any such claim is also indemnified or insured against by any other person) in any way relating to or resulting from this Agreement or the Loan Documents, or any of the transactions contemplated herein or therein excepting, however, any and all claims made by Borrowers or third-parties against Lender or any of Lender’s own officers, directors, or shareholders to the extent relating to or resulting from Lender’s (or its directors, officers, agents, attorneys and employees) willful misconduct. The provisions of this sub-paragraph (r) shall survive the payoff, release, foreclosure or other disposition, as applicable, of this Agreement.

 

(s) USA Patriot Act. Borrower acknowledges that, pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107 56), Lender is required to obtain, verify and record information that identifies Borrowers and the Authorized Officers acting on Borrowers’ behalf, which information includes the name and address of Borrowers’ Authorized Officers and other information that will allow Lender to identify Borrowers and the Authorized Officers in accordance with the USA Patriot Act.

 

(t) Execution in Counterparts. This Agreement may be executed in multiple counterparts, each of which shall constitute an original and shall be binding upon the party who executed same, but all of the counterparts taken together shall constitute one and the same document. A facsimile or a copy in portable document format (.PDF) or any other electronic means of a party’s signature on this Agreement and the other Loan Documents shall be deemed to constitute an original signature in all respects, and shall be binding in all respects upon the party who executed same and may be relied upon for all purposes by the other parties hereto.

 

[Balance of page intentionally left blank.]

 

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IN WITNESS WHEREOF, Borrowers have caused this Agreement to be duly executed as of the day and year first written above.

 

  BORROWERS:
                      
  BM TECHNOLOGIES, INC.
     
  By: /s/ Luvleen Sidhu
  Name:  Luvleen Sidhu
  Title: Chief Executive Officer
     
  BMTX, INC.
     
  By: /s/ Luvleen Sidhu
  Name: Luvleen Sidhu
  Title: Chief Executive Officer
     
  LENDER:
     
  CUSTOMERS BANK
     
  By: /s/ Richard Ehst
  Name: Richard Ehst
  Title: President and Chief Executive Officer

 

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[Schedules to this exhibit have been omitted pursuant to Item 601(b)(2) of Registration S-K. The Registrant hereby agrees to furnish a copy of any omitted schedules to the SEC upon request.]

 

 

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Exhibit 10.7

 

BM TECHNOLOGIES, INC.
2020 EQUITY INCENTIVE PLAN
Effective as of January 4, 2021

 

1. Purpose and Stockholder Approval.

 

(a) BM Technologies, Inc., a Delaware corporation (as successor to Megalith Financial Acquisition Corp., the “Company”), hereby adopts the BM Technologies, Inc. 2020 Equity Incentive Plan (the “Plan”), effective as of January 4, 2021. The Plan is intended to recognize the contributions made to the Company and its Affiliates by the Employees, Directors and Advisors of the Company, to provide such persons with additional incentive to devote themselves to the future success of the Company, to improve the ability of the Company to attract, retain, and motivate individuals upon whom the Company’s sustained growth and financial success depend, by providing such persons with an opportunity to acquire or increase their proprietary interest in the Company. To this end, the Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units and dividend equivalent rights. Any of these awards may, but need not, be made as performance incentives to reward attainment of annual or long-term performance goals at the Committee’s sole and absolute discretion. Stock options granted under the Plan may be Non-Qualified Stock Options or Incentive Stock Options, as provided herein, except that stock options granted to any person who is not an Employee of the Company shall in all cases be Non-Qualified Stock Options.

 

(b) The adoption the Plan is was approved by the Company’s stockholders at the Company’s stockholders meeting on December 21, 2020.

 

2. Definitions. Unless the context clearly indicates otherwise, the following terms shall have the following meanings:

 

Advisor” means any person, including a consultant, who is engaged by the Company or an Affiliate to render consulting or advisory services and is compensated for such services,

 

Affiliate” means a corporation that is a parent corporation or a subsidiary corporation with respect to the Company within the meaning of Section 424(e) or (f) of the Code, and any other non-corporate entity that would be such a subsidiary corporation if such entity were a corporation.

 

Award” means an award of Restricted Stock, Restricted Stock Units, Stock Options, Stock Appreciation Rights or Dividend Equivalent Rights granted under the Plan, designated by the Committee at the time of such grant as an Award, and containing the terms specified herein for Awards.

 

Award Document” means the document that sets forth the terms and conditions of each grant of an Award. Awards shall be evidenced by an Award Document in such form as the Committee shall from time to time approve, which Award Document shall comply with and be subject to the terms and conditions of the Plan and such other terms and conditions as the Committee shall from time to time require that are not inconsistent with the terms of the Plan. A Grantee shall not have any rights with respect to an Award until and unless such Grantee shall have executed an Award Document containing the terms and conditions determined by the Committee.

 

 

 

 

Board” or “Board of Directors” means the Board of Directors of the Company.

 

Cause” shall have the same definition as under any employment agreement between the Company or any Affiliate and the Grantee or, if no such employment agreement exists or if such employment agreement does not contain any such definition or words of similar import, “Cause” means, except as otherwise provided in an Award Document, that an employee-Grantee should be or was dismissed as a result of:

 

(i) any material breach by the Grantee of any agreement to which the Grantee and the Company or an Affiliate are parties;

 

(ii) any act (other than retirement) or omission to act by the Grantee, including without limitation, the commission of any crime (other than ordinary traffic violations) that may have a material and adverse effect on the business of the Company or any Affiliate or on the Grantee’s ability to perform services for the Company or any Affiliate; or

 

(iii) any material misconduct or neglect of duties by the Grantee in connection with the business or affairs of the Company or any Affiliate.

 

Change of Control” shall mean, except as otherwise provided in the Award Document, the first to occur of any of the following events:

 

(i) The date any transaction is consummated that constitutes the sale or other disposition of all or substantially all of the assets of the Company, other than where such transaction results in all or substantially all of the assets of the Company being held by an entity as to which at least a majority of the equity ownership of such entity immediately after the sale or disposition is held by the same persons and in the same proportions as the Company’s common stock was held immediately before such sale or other disposition;

 

(ii) The date any transaction is consummated that constitutes a merger or consolidation of the Company with or into another corporation, other than a merger or consolidation of the Company in which holders of shares of the Common Stock immediately prior to the merger or consolidation will hold at least a majority of the ownership of common stock of the surviving corporation (and, if one class of common stock is not the only class of voting securities entitled to vote on the election of directors of the surviving corporation, a majority of the voting power of the surviving corporation’s voting securities) immediately after the merger or consolidation, which common stock (and, if applicable, voting securities) is to be held in the same proportion as such holders’ ownership of Common Stock immediately before the merger or consolidation;

 

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(iii) The date any entity, person or group, (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act of 1934, as amended), other than the Company or any of its subsidiaries or any employee benefit plan (or related trust) sponsored or maintained by the Company or any of its subsidiaries, shall have become the beneficial owner of, or shall have obtained voting control over, more than fifty percent (50%) of the outstanding shares of the Common Stock;

 

(iv) The first day after the date this Plan is effective when directors are elected such that a majority of the Board of Directors shall have been members of the Board of Directors for less than twenty four (24) months, unless the nomination for election of each new director who was not a director at the beginning of such twenty four (24) month period was approved by a vote of at least two thirds of the directors then still in office who were directors at the beginning of such period; or

 

(v) The date the stockholders of the Company (or the Board of Directors, if stockholder action is not required) approve a plan or other arrangement pursuant to which the Company will be dissolved or liquidated and no further contingences remain that could prevent the consummation of such plan or arrangement. For avoidance of doubt, any transaction done exclusively for the purpose of changing the domicile of the company shall not constitute a Change of Control.

 

Closing” means the consummation of the transactions contemplated by the Merger Agreement.

 

Code” means the Internal Revenue Code of 1986, as amended.

 

Committee” shall have the meaning set forth in Section 3(a).

 

Common Stock” means the Company’s Common Stock, par value $0.0001 per share.

 

Director” means a member of the Board.

 

Disability” shall have the meaning set forth in Section 22(e)(3) of the Code.

 

Dividend Equivalent Right” means a right, granted to a Grantee under the terms of the Plan, to receive cash, Stock, other Awards or other property equal in value to dividends paid with respect to a specified number of shares of Stock, or other periodic payments.

 

Employee” means an employee of the Company (including an officer or Director who is also an employee), but excluding any person who is classified by the Company as a “contractor” or “consultant,” no matter how characterized by the Internal Revenue Service, other governmental agency or a court. Any change of characterization of an individual by the Internal Revenue Service or any court or government agency shall have no effect upon the classification of an individual as an Employee for purposes of this Plan, unless the Committee determines otherwise.

 

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Exchange Act” means the Securities Exchange Act of 1934, as amended, and all rules and regulations promulgated thereunder. Reference to a specific section of the Exchange Act or regulation thereunder shall include such section or regulation, any valid regulation or interpretation promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.

 

Fair Market Value” shall mean:

 

(i) If the Common Stock is traded on any national stock exchange or quotation system, then the Fair Market Value per Share shall be, the last reported sale price per share thereof on the relevant date (or the closing price as of the most recent trading day prior to the relevant date if the relevant date is not a trading day), as reported on the stock exchange or quotation system that reflects the principal market on which the Common Stock is traded on such date; or

 

(ii) If the Common Stock is not traded on any national stock exchange or quotation system on the relevant date, the Fair Market Value shall be as determined in good faith by the Committee.

 

Good Reason” shall have the same definition as under any employment agreement between the Company or any Affiliate and the Grantee or, if no such employment agreement exists or if such employment agreement does not contain any such definition or words of similar import, “Good Reason” shall mean, except as otherwise provided in an Award Document, the termination of employment by the Grantee following the occurrence, without the Grantee’s written consent, after a Change of Control of:

 

(i) a material reduction in the Grantee’s base salary or wage rate or target incentive opportunity; or

 

(ii) the relocation of the Grantee’s principal place of employment to a location more than fifty miles from the Grantee’s principal place of employment as of immediately prior to the Change of Control;

 

providedhowever, that the foregoing events shall constitute Good Reason only if the Grantee provides the Company with written objection to the event within thirty days following the occurrence thereof, the Company does not reverse or otherwise cure the event within thirty days of receiving that written objection and the Grantee resigns the Grantee’s employment within twenty days following the expiration of the Company’s thirty-day cure period.

 

Grant Date” means the date established by the Committee as of which any Award has been granted to a Grantee.

 

Grantee” means any person who is granted an Award.

 

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ISO” or “Incentive Stock Option” means an Option granted under the Plan that is intended to qualify as an “incentive stock option” within the meaning of Section 422(b) of the Code.

 

Merger Agreement” means the Agreement and Plan of Merger, dated effective as of August 6, 2020, by and among Megalith Financial Acquisition Corp., MFAC Merger Sub Inc., Customers Bank and BankMobile Technologies, Inc., as it may be amended and supplemented from time to time.

 

Non-Employee Director” means a Director who either (i) is not a current employee or officer of the Company or an Affiliate, does not receive compensation, either directly or indirectly, from the Company or an Affiliate for services rendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act (“Regulation S-K”)), does not possess an interest in any other transaction for which disclosure would be required under Item 404(a) of Regulation S-K, and is not engaged in a business relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered a “non-employee director” for purposes of Rule 16b-3.

 

Non-Qualified Stock Option” means an Option granted under the Plan that is not intended to qualify, or otherwise does not qualify, as an “incentive stock option” within the meaning of Section 422(b) of the Code.

 

Option” or “Stock Option” means either an ISO or a Non-Qualified Stock Option granted under the Plan.

 

Option Price” means the price at which Shares may be purchased upon exercise of an Option, as calculated pursuant to the applicable provisions of the Plan.

 

Restricted Stock” means Shares issued to a person pursuant to an Award.

 

Rule 16b-3” means Rule 16b-3 promulgated under the Act or any successor Rule.

 

Restricted Stock Unit” or “RSU” means a bookkeeping entry representing the equivalent of one (1) share of Common Stock awarded to a Grantee under Section 8 of the Plan.

 

Shares” means the shares of Common Stock that are the subject of Awards.

 

Stock Appreciation Rights” or “SAR” means a right granted to a grantee under Section 7 of the Plan.

 

Termination of Employment or Service in Connection with a Change of Control” shall be deemed to occur with respect to a Grantee if, within the one-year period (or such longer period as may be specified in an Award Document) beginning on the date of a Change of Control, the employment or service of the Grantee shall be terminated either (i) involuntarily for any reason other than for Cause, (ii) voluntarily for Good Reason or (iii) in the case of Directors, a required resignation from the Board of Directors.

 

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3. Administration of the Plan.

 

(a) Committee. The Plan shall be administered by the Compensation Committee of the Board of Directors provided such committee consists of at least two members of the Board of Directors, each of whom qualifies as a Non-Employee Director and as an “independent director” (as that phrase is used by the rules of the stock exchange on which the Company’s shares are traded). The foregoing requirement for members of the Compensation Committee to act as the Committee shall not be applicable if the Company ceases to be a publicly-traded corporation. Notwithstanding anything in this Section 3(a) to the contrary, the Board of Directors may establish more than one committee to administer the Plan with respect to separate classes of Grantees (other than officers of the Company who are subject to Section 16 of the Exchange Act), and, provided further, that the Board of Directors itself shall act as the Committee with respect to Awards made to Non-Employee Directors.

 

(b) Grants. The Committee shall from time to time at its discretion direct the Company to grant Awards pursuant to the terms of the Plan. The Committee shall have plenary authority to (i) determine the Grantees to whom and the times at which Awards shall be granted, (ii) determine the price at which Options shall be granted, (iii) determine the type of Option to be granted and the number of Shares subject thereto, (iv) determine the number of Shares to be granted pursuant to each Award and (v) approve the form and terms and conditions of the Award Documents and of each Award; all subject, however, to the express provisions of the Plan, including, specifically, Section 10 regarding grants of Awards to Non-Employee Directors. In making such determinations, the Committee may take into account the nature of the Grantee’s services and responsibilities, the Grantee’s present and potential contribution to the Company’s success and such other factors as it may deem relevant. The interpretation and construction by the Committee of any provisions of the Plan or of any Award granted under it shall be final, binding and conclusive.

 

(c) Exculpation. No member of the Committee shall be personally liable for monetary damages as such for any action taken or any failure to take any action in connection with the administration of the Plan or the granting of Awards thereunder except to the extent such exculpation is prohibited by provisions of the applicable business corporations law; provided, however, that the provisions of this Section 3(c) shall not apply to the responsibility or liability of a member of the Committee pursuant to any criminal statute or to the liability of a member of the Committee for the payment of taxes pursuant to local, state or federal law.

 

(d) Indemnification. Service on the Committee shall constitute service as a member of the Board of Directors. Each member of the Committee shall be entitled without further act on his or her part to indemnity from the Company to the fullest extent provided by applicable law and the Company’s Certificate of Incorporation and/or Bylaws in connection with or arising out of any action, suit or proceeding with respect to the administration of the Plan or the granting of Options or Awards thereunder in which he or she may be involved by reason of his or her being or having been a member of the Committee, whether or not he or she continues to be such member of the Committee at the time of the action, suit or proceeding.

 

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4. Eligibility. Employees (including Employees who are members of the Board of Directors or its Affiliates), Non-Employee Directors, and Advisors of the Company or its Affiliates shall be eligible to receive Awards hereunder; provided, that only Employees of the Company or its Affiliates shall be eligible to receive ISOs. The Committee, in its sole discretion, shall determine whether an individual qualifies as an Employee of the Company or its Affiliates.

 

5. Term of the Plan. No Award may be granted under the Plan after [], 2030.

 

6. Stock Options and Terms. Each Option granted under the Plan shall be a Non-Qualified Stock Option unless the Option shall be specifically designated at the time of grant to be an ISO. Options granted pursuant to the Plan shall be evidenced by the Award Documents in such form as the Committee shall from time to time approve, which Award Documents shall comply with and be subject to the following terms and conditions and such other terms and conditions as the Committee shall from time to time require that are not inconsistent with the terms of the Plan.

 

(a) Number of Shares. Each Award Document shall state the number of Shares to which it pertains. A Grantee may receive more than one Option, which may include Options that are intended to be ISOs and Options that are not intended to be ISOs, but only on the terms and subject to the conditions and restrictions of the Plan.

 

(b) Option Price. Each Award Document shall state the Option Price that shall be at least 100% of the Fair Market Value of the Shares at the time the Option is granted as determined by the Committee in accordance with this Section 6(b); providedhowever, that if an ISO is granted to a Grantee who then owns, directly or by attribution under Section 424(d) of the Code, shares of capital stock of the Company possessing more than 10% of the total combined voting power of all classes of stock of the Company or an Affiliate, then the Option Price shall be at least 110% of the Fair Market Value of the Shares at the time the Option is granted.

 

(c) Exercise. No Option shall be deemed to have been exercised prior to the receipt by the Company of written notice of such exercise and of payment in full of the Option Price for the Shares to be purchased. Each such notice shall specify the number of Shares to be purchased and shall (unless the Shares are covered by a then effective registration statement or a Notification under Regulation A under the Securities Act of 1933, as amended (the “Act”)), contain the Grantee’s acknowledgment in form and substance satisfactory to the Company that (i) such Shares are being purchased for investment and not for distribution or resale (other than a distribution or resale that, in the opinion of counsel satisfactory to the Company, may be made without violating the registration provisions of the Act), (ii) the Grantee has been advised and understands that (A) the Shares have not been registered under the Act and are “restricted securities” within the meaning of Rule 144 under the Act and are subject to restrictions on transfer and (B) the Company is under no obligation to register the Shares under the Act or to take any action that would make available to the Grantee any exemption from such registration, (iii) such Shares may not be transferred without compliance with all applicable federal and state securities laws, and (iv) an appropriate legend referring to the foregoing restrictions on transfer and any other restrictions imposed under the Award Documents may be endorsed on the certificates. Notwithstanding the foregoing, if the Company determines that issuance of Shares should be delayed pending (I) registration under federal or state securities laws, (II) the receipt of an opinion that an appropriate exemption from such registration is available, (III) the listing or inclusion of the Shares on any securities exchange or in an automated quotation system or (IV) the consent or approval of any governmental regulatory body whose consent or approval is necessary in connection with the issuance of such Shares, the Company may defer exercise of any Option granted hereunder until any of the events described in this Section 6(c) has occurred.

 

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(d) No Stockholder Rights Prior to Exercise. No Grantee shall, solely by reason of having been granted one or more Options, have any rights as a stockholder of the Company and shall have no right to vote Shares subject to the Option, nor any right to receive any dividends declared or paid with respect to such Shares unless and until the Grantee has exercised his or her Option and acquired such Shares.

 

(e) Medium of Payment. A Grantee shall pay for Shares (i) in cash, (ii) by certified check from a U.S. bank payable to the order of the Company, or (iii) by such other mode of payment as the Committee may approve, including, without limitation, payment through a broker in accordance with procedures permitted by Regulation T of the Federal Reserve Board. Furthermore, the Committee may provide in an Award Document that payment may be made in whole or in part in shares of Common Stock held by the Grantee. If payment is made in whole or in part in shares of Common Stock, then the Grantee shall deliver to the Company certificates registered in the name of such Grantee representing the shares of Common Stock owned by such Grantee, free of all liens, claims and encumbrances of every kind and having an aggregate Fair Market Value on the date of delivery that is at least as great as the Option Price of the Shares (or relevant portion thereof) with respect to which such Option is to be exercised by the payment in shares of Common Stock, accompanied by stock powers duly endorsed in blank by the Grantee. A Grantee may also pay for Shares by delivery of Shares to be acquired upon the exercise of such Option, with such Shares being valued at the Fair Market Value on the date of exercise. Notwithstanding the foregoing, the Committee may impose from time to time such limitations and prohibitions on the use of shares of Common Stock to exercise an Option as it deems appropriate.

 

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(f) Termination of Options.

 

(i) No Option shall be exercisable after the first to occur of the following:

 

(1) Expiration of the Option term specified in the Award Document, which shall not exceed (i) ten years from the Grant Date, or (ii) five years from the Grant Date of an ISO if the Grantee on the Grant Date owns, directly or by attribution under Section 424(d) of the Code, shares of capital stock of the Company possessing more than ten percent (10%) of the total combined voting power of all classes of capital stock of the Company or of an Affiliate;

 

(2) Except as otherwise provided in the Award Document, expiration of ninety (90) days from the date the Grantee’s employment or service with the Company or its Affiliate terminates for any reason other than Disability or death or as otherwise specified in this Section 6 or Section 13 below;

 

(3) Except as otherwise provided in the Award Document, expiration of one year from the date the Grantee’s employment or service with the Company or its Affiliate terminates due to the Grantee’s Disability or death;

 

(4) The date on which the employment or service of the Grantee shall be terminated for Cause. In such event, in addition to immediate termination of the Option, the Grantee shall automatically forfeit all Shares for which the Company has not yet delivered the share certificates upon refund by the Company of the Option Price of such Shares; or

 

(5) The date, if any, set by the Board of Directors as an accelerated expiration date pursuant to Section 12 hereof.

 

(ii) Notwithstanding the foregoing, in the event that on the last business day of the term of an Option (other than an Incentive Stock Option), the exercise of the Option is prohibited by applicable law, including a prohibition on purchases or sales of Common Stock under the Company’s insider trading policy, the term of the Option shall be extended for a period of 30 days following the end of the legal prohibition, unless the Committee determines otherwise.

 

(iii) Notwithstanding the foregoing, the Committee may extend the period during which an Option may be exercised to a date no later than the date of the expiration of the Option term specified in the Award Documents, as they may be amended, provided that any change pursuant to this Section 6(f)(ii) that would cause an ISO to become a Non-Qualified Stock Option may be made only with the consent of the Grantee and provided, further, that any such extension may only be made in compliance with Section 409A of the Code, to the extent applicable .

 

(iv) During the period in which an Option may be exercised after the termination of the Grantee’s employment or service with the Company or any Affiliate, such Option shall only be exercisable to the extent it was exercisable immediately prior to such Grantee’s termination of service or employment, except to the extent specifically provided to the contrary in the applicable Award Document.

 

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(g) Transfers. Except as provided in Section 24, no Option may be transferred except by will or by the laws of descent and distribution. During the lifetime of the person to whom an Option is granted, such Option may be exercised only by him or her except as provided in Section 24. Notwithstanding the foregoing, a Non-Qualified Stock Option may be transferred pursuant to the terms of a “qualified domestic relations order” within the meaning of Sections 401(a)(13) and 414(p) of the Code or within the meaning of Title I of the Employee Retirement Income Security Act of 1974, as amended.

 

(h) Exercisability. No Option may be exercised except to the extent the Option has become vested pursuant to its terms.

 

(i) Limitation on ISO Grants. In no event shall the aggregate Fair Market Value of the Shares (determined at the time the ISO is granted) with respect to which an ISO is exercisable for the first time by the Grantee during any calendar year (under all incentive stock option plans of the Company or its Affiliates) exceed $100,000 (determined as of the Grant Date or Dates).

 

(j) Other Provisions. The Award Documents shall contain such other provisions including, without limitation, provisions authorizing the Committee to accelerate the exercisability of all or any portion of an Option, additional restrictions upon the exercise of the Option or additional limitations upon the term of the Option, as the Committee shall deem advisable.

 

(k) Amendment. The Committee shall have the right to amend Award Documents issued to a Grantee, subject to the Grantee’s consent if such amendment is not favorable to the Grantee, except that the consent of the Grantee shall not be required for any amendment made under Section 13.

 

7. Stock Appreciation Rights.

 

(a) An SAR is an Award in the form of a right to receive cash or Common Stock, upon surrender of the SAR, in an amount equal to the appreciation in the value of the Common Stock over a base price established in the Award. An SAR shall confer on the Grantee to whom it is granted a right to receive, upon exercise thereof, the excess of (A) the Fair Market Value of one share of Common Stock on the date of exercise over (B) the grant price of the SAR as determined by the Committee. The Award Document for an SAR shall specify the grant price of the SAR, which shall be at least the Fair Market Value of a share of Common Stock on the Grant Date. SARs may be granted in conjunction with all or part of an Option granted under the Plan or at any subsequent time during the term of such Option, in conjunction with all or part of any other Award or without regard to any Option or other Award; provided that an SAR that is granted subsequent to the Grant Date of a related Option must have an SAR Price that is no less than the Fair Market Value of one share of Common Stock on the Grant Date of the Option.

 

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(b) The Committee shall determine at the Grant Date or thereafter, the time or times at which and the circumstances under which an SAR may be exercised in whole or in part (including based on achievement of performance goals and/or future service requirements), the time or times at which SARs shall cease to be or become exercisable following termination of Service or upon other conditions, the method of exercise, method of settlement, form of consideration payable in settlement, method by or forms in which Shares will be delivered or deemed to be delivered to Grantees, whether or not an SAR shall be in tandem or in combination with any other Award, and any other terms and conditions of any SAR.

 

(c) Each SAR granted under the Plan shall terminate, and all rights thereunder shall cease, upon the expiration of not more than ten years from the date such SAR is granted, or under such circumstances and on such date prior thereto as is set forth in the Plan or as may be fixed by the Committee and stated in the Award Document relating to such SAR.

 

(d) Holders of an SAR shall have no rights as stockholders of the Company solely by reason of having granted one or more SARs. Holders of an SAR shall have no right to vote such Shares or the right to receive any dividends declared or paid with respect to such Shares.

 

(e) A holder of an SAR shall have no rights other than those of a general creditor of the Company. An SAR represents an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Award Document.

 

(f) Unless the Committee otherwise provides in an Award Document, in the event that a Grantee’s employment with the Company terminates for any reason other than because of death or Disability, any SAR held by such Grantee shall be forfeited by the Grantee and reacquired by the Company. In the event that a Grantee’s employment terminates as a result of the Grantee’s death or Disability, all remaining restrictions with respect to such Grantee’s SAR shall immediately lapse, unless otherwise provided in the Award Document. Upon forfeiture of an SAR, the Grantee shall have no further rights with respect to such Award.

 

(g) Except as provided in this Section 7, during the lifetime of a Grantee, only the Grantee (or, in the event of legal incapacity or incompetency, the Grantee’s guardian or legal representative) may exercise an SAR. Except as provided in this Section 7 or Section 24, no SAR shall be assignable or transferable by the Grantee to whom it is granted, other than by will or the laws of descent and distribution.

 

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8. Restricted Stock and Restricted Stock Units.

 

(a) Restricted Stock is an Award of shares of Common Stock that is granted subject to the satisfaction of such conditions and restrictions as the Committee may determine. In lieu of, or in addition to any Awards of Restricted Stock, the Committee may grant Restricted Stock Units to any Grantee subject to the same conditions and restrictions as the Committee would have imposed in connection with any Award of Restricted Stock. Each Restricted Stock Unit shall have a value equal to the fair market value of one share of Common Stock. Each Award Document shall state the number of shares of Restricted Stock or Restricted Stock Units to which it pertains. No cash or other consideration shall be required to be paid by a Grantee for an Award.

 

(b) At the time a grant of Restricted Stock or Restricted Stock Units is made, the Committee may, in its sole discretion, establish a period of time (a “restricted period”) applicable to such Restricted Stock or Restricted Stock Units. Each Award of Restricted Stock or Restricted Stock Units may be subject to a different restricted period. The Committee may, in its sole discretion, at the time a grant of Restricted Stock or Restricted Stock Units is made, prescribe restrictions in addition to or other than the expiration of the restricted period, including the satisfaction of corporate or individual performance objectives, which may be applicable to all or any portion of the Restricted Stock or Restricted Stock Units. Except as provided in Section 24, neither Restricted Stock nor Restricted Stock Units may be sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the restricted period or prior to the satisfaction of any other restrictions prescribed by the Committee with respect to such Restricted Stock or Restricted Stock Units.

 

(c) The Company shall issue, in the name of each Grantee to whom Restricted Stock has been granted, stock certificates representing the total number of shares of Restricted Stock granted to the Grantee, as soon as reasonably practicable after the Grant Date. The Committee may provide in an Award Document that either (i) the Secretary of the Company shall hold such certificates for the Grantee’s benefit until such time as the Restricted Stock is forfeited to the Company or the restrictions lapse, or (ii) such certificates shall be delivered to the Grantee, providedhowever, that such certificates shall bear a legend or legends that comply with the applicable securities laws and regulations and makes appropriate reference to the restrictions imposed under the Plan and the Award Document.

 

(d) Unless the Committee otherwise provides in an Award Document, holders of Restricted Stock shall have the right to vote such Shares. Under no circumstances shall the holder of Restricted Stock be entitled to receive any dividends declared or paid with respect to such Shares until such time as the Restricted Stock becomes vested. The Committee may provide that any dividends paid on Restricted Stock must be reinvested in shares of Common Stock, which shall then be subject to the same vesting conditions and restrictions applicable to such Restricted Stock. All distributions, if any, received by a Grantee with respect to Restricted Stock as a result of any stock split, stock dividend, combination of shares, or other similar transaction shall be subject to the restrictions applicable to the original Grant.

 

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(e) Holders of Restricted Stock Units shall have no rights as stockholders of the Company. The Committee may provide in an Award Document evidencing a grant of Restricted Stock Units that the holder of such Restricted Stock Units shall be entitled to receive, upon the Company’s payment of a cash dividend on its outstanding Common Stock, a cash payment for each Restricted Stock Unit held equal to the per-share dividend paid on the Common Stock; provided, however, that such cash dividend shall not be distributed to the holder of such Restricted Stock Units until the Restricted Stock Units become vested. The Award Document may also provide that such cash payment will be deemed reinvested in additional Restricted Stock Units at a price per unit equal to the Fair Market Value of a share of Common Stock on the date that such dividend is paid, but such additional Restricted Stock Units shall in all cases be subject to the same restrictions that apply to the original Restricted Stock Units.

 

(f) A holder of Restricted Stock Units shall have no rights other than those of a general creditor of the Company. Restricted Stock Units represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Award Document.

 

(g) Unless the Committee otherwise provides in an Award Document, in the event that a Grantee’s employment with the Company terminates for any reason other than death or Disability, any Restricted Stock or Restricted Stock Units held by such Grantee shall be forfeited by the Grantee and reacquired by the Company. In the event that a Grantee’s employment terminates as a result of the Grantee’s death or Disability, all remaining restrictions with respect to such Grantee’s Restricted Stock shall immediately lapse, unless otherwise provided in the Award Document. Upon forfeiture of Restricted Stock or Restricted Stock Units, the Grantee shall have no further rights with respect to such Award, including but not limited to any right to vote Restricted Stock or any right to receive dividends with respect to shares of Restricted Stock or Restricted Stock Units.

 

(h) Upon the expiration or termination of any restricted period and the satisfaction of any other conditions prescribed by the Committee, the restrictions applicable to shares of Restricted Stock or Restricted Stock Units settled in Stock shall lapse, and, unless otherwise provided in the Award Document, a stock certificate for such shares shall be delivered, free of all such restrictions, to the Grantee or the Grantee’s beneficiary or estate, as the case may be. The restrictions upon such Restricted Stock or Restricted Stock Units shall lapse only if the Grantee on the date of such lapse is, and has continuously been an employee of the Company or its Affiliate from the date such Award was granted. Neither the Grantee, nor the Grantee’s beneficiary or estate, shall have any further rights with regard to a Restricted Stock Unit once the share of Stock represented by the Restricted Stock Unit has been delivered.

 

(i) Restricted Stock and Restricted Stock Units are intended to be subject to a substantial risk of forfeiture during the restricted period, and, in the case of Restricted Stock (but not Restricted Stock Units) subject to federal income tax in accordance with section 83 of the Code. Section 83 generally provides that Grantee will recognize compensation income with respect to each installment of the Restricted Stock on the Vesting Date in an amount equal to the then Fair Market Value of the shares for which restrictions have lapsed. Alternatively, Grantee may elect, pursuant to Section 83(b) of the Code, to recognize compensation income for all or any part of the Restricted Stock at the Grant Date in an amount equal to the fair market value of the Restricted Stock subject to the election on the Grant Date. Such election must be made within 30 days of the Grant Date and Grantee shall immediately notify the Company if such an election is made.

 

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9. Dividend Equivalent Rights. A Dividend Equivalent Right is an Award entitling the Grantee to receive credits based on cash distributions that would have been paid on the shares of Common Stock subject to an equity-based Award granted to such Grantee, determined as though such shares had been issued to and held by the Grantee. Notwithstanding the foregoing, no Dividend Equivalent Right may be granted hereunder to any Grantee in connection with a Stock Option or SAR granted to such Grantee. The terms and conditions of Dividend Equivalent Rights shall be specified in the Award Document. Dividend equivalents credited to the holder of a Dividend Equivalent Right may be deemed reinvested in additional shares of Common Stock, which may thereafter accrue additional equivalents, or may be treated as a cumulative right to the cash amount of such dividends. Any reinvestment of deemed dividends in shares of Common Stock shall be at Fair Market Value on the date of the deemed dividend distribution. Dividend Equivalent Rights may be settled in cash or Common Stock or a combination thereof, and shall be paid or distributed in a single payment or distribution on (or as soon as practicable following) the date the underlying Award has vested (taking into account the extent of such vesting) and any such Dividend Equivalent Right shall expire or be forfeited or annulled under the same conditions and to the same extent as the underlying Award to which the Dividend Equivalent Right is related expires or is forfeited. Except as may otherwise be provided by the Committee in the Award Document, a Grantee’s rights in all Dividend Equivalent Rights or interest equivalents shall automatically terminate upon the Grantee’s termination of Service for any reason.

 

10. Grants of Awards to Non-Employee Directors. Notwithstanding anything herein to the contrary, no Awards shall be granted under the Plan to any Non-Employee Director except as provided for in this Section 10. Specifically, Non-Employee Directors shall only receive Awards as follows:

 

(a) Grants may be in the form of any Option (other than an ISO) or Award permitted under the Plan;

 

(b) The fair value of Awards granted to any Non-Employee Director during any one calendar year, along with cash compensation paid to such Non-Employee Director in respect of such director’s service as a member of the Board of Directors during such year (including service as a member or chair of any committees of the Board of Directors) during such fiscal year shall not be in excess of three hundred thousand dollars ($300,000).

 

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11. Limitations on Awards.

 

(a) Shares Subject to Plan. The aggregate maximum number of Shares for which Awards may be granted pursuant to the Plan shall be fixed immediately after the Closing as a number of Shares equal to ten percent (10%) of the number of issued and outstanding shares of Common Stock immediately after the Closing; provided, that such number of Shares shall be subject to adjustment thereafter as provided in Section 13. All of such Shares may be granted as ISOs.

 

(i) The Shares shall be issued from authorized and unissued Common Stock or Common Stock held in or hereafter acquired for the treasury of the Company.

 

(ii) Shares covered by an Award shall be counted against the limit set forth in this Section 11(a). If any Shares covered by an Award granted under the Plan are not purchased or are forfeited or expire, or if an Award otherwise terminates without delivery of any Common Stock subject thereto, then the number of Shares counted against the aggregate number of Shares available under the Plan with respect to such Award shall, to the extent of any such forfeiture, termination, cash-settlement or expiration, again be available for the grant of Awards under the Plan in the same amount as such Shares were counted against the limit set forth in this section.

 

(iii) If an Option or an SAR terminates or expires without having been fully exercised for any reason, or is canceled or forfeited or cash-settled pursuant to the terms of an Award, the Shares for which the Option or SAR was not exercised may again be the subject of an Award granted pursuant to the Plan. To the extent Shares subject to an Option or stock-settled SAR are withheld by the Company for payment of purchase price or as a means of paying the exercise price, or for payment of federal, state or local income or wage tax withholding requirements, the Shares that are so withheld shall be treated as granted and shall not again be available for subsequent grants of Awards under the Plan.

 

(iv) If any full-value Award (i.e., an equity-based Award other than an Option or SAR) is canceled or forfeited or cash-settled pursuant to the terms of an Award, the Shares for which such Award was canceled or forfeited or cash-settled may again be subject of an Award granted pursuant to the Plan. To the extent Shares subject to a full-value Award are not actually issued to the Grantee at the time the Award is exercised or settled, including where Shares are withheld for payment of federal, state or local income or wage tax withholding, the Shares that are so withheld shall again be available for grants of Awards under the Plan.

 

(b) No Repricing. Other than pursuant to Section 13, the Committee shall not without the approval of the Company’s stockholders (a) lower the exercise price per Share of an Option or SAR after it is granted, (b) cancel an Option or SAR when the exercise price per Share exceeds the Fair Market Value of one Share in exchange for cash or another Award (other than in connection with a Change in Control), or (c) take any other action with respect to an Option or SAR that would be treated as a repricing under the rules and regulations of the principal U.S. national securities exchange on which the Shares are listed. The foregoing limitations on modifications of SARs and Options shall not be applicable to changes the Committee determines to be necessary in order to achieve compliance with applicable law, including Internal Revenue Code Section 409A.

 

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12. Change of Control. In the event of a Change of Control, the Committee may take whatever action with respect to Awards outstanding as it deems necessary or desirable, including, without limitation, accelerating the expiration or termination date or the date of exercisability in any Award Documents, settling any Award by means of a cash payment (including a cash payment equal to the amount paid per share of Common Stock in such Change of Control less, in the case of Options, the Option Price) or removing any restrictions from or imposing any additional restrictions on any outstanding Awards. Except to the extent otherwise provided in an Award Document, the following provisions shall apply in the event of a Change of Control:

 

(a) Awards Assumed or Substituted by Surviving Entity. Awards assumed by an entity that is the surviving or successor entity following a Change of Control (the “Surviving Entity”) or are otherwise equitably converted or substituted in connection with a Change of Control shall have the same vesting schedule in effect following the Change of Control. Following the Change in Control, if a Termination of Employment or Service in Connection with a Change in Control occurs, then all of the Grantee’s outstanding Awards shall become fully exercisable and/or vested as the case may be as of the date of termination, with payout to such Grantee within 60 days following the date of termination of employment, provided that the payment date of any Awards that are considered to be deferred compensation shall not be accelerated.

 

(b) Awards not Assumed or Substituted by Surviving Entity. Upon the occurrence of a Change of Control, and except with respect to any Awards assumed by the Surviving Entity or otherwise equitably converted or substituted in connection with the Change of Control in a manner approved by the Committee or the Board of Directors, all outstanding Awards shall become immediately vested and exercisable, as the case may be, at or immediately prior to the consummation of the event that constitutes the Change of Control and there shall be a payout of the Award (to the extent applicable under the terms of the Award) to Grantees within sixty (60) days following the Change of Control.

 

13. Adjustments on Changes in Capitalization. The aggregate number of Shares and class of Shares as to which Awards may be granted hereunder, the limitation as to grants to individuals set forth in Section 10(b) hereof, the number of Shares covered by each outstanding Award, and the Option Price for each related outstanding Option and SAR, shall be appropriately adjusted in the event of a stock dividend, extraordinary cash dividend, stock split, recapitalization or other change in the number or class of issued and outstanding equity securities of the Company resulting from a subdivision or consolidation of the Common Stock and/or, if appropriate, other outstanding equity securities or a recapitalization or other capital adjustment (not including the issuance of Common Stock on the conversion of other securities of the Company that are convertible into Common Stock) affecting the Common Stock which is effected without receipt of consideration by the Company. The Committee shall have authority to determine the adjustments to be made under this Section, and any such determination by the Committee shall be final, binding and conclusive; providedhowever, that no adjustment shall be made that will cause an ISO to lose its status as such without the consent of the Grantee, except for adjustments made pursuant to Section 12 hereof.

 

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14. Substitute Awards. Notwithstanding anything in the Plan to the contrary, the Committee may grant Awards under the Plan in substitution for stock and stock-based awards held by employees of another entity who become employees of the Company or an Affiliate as a result of a merger or consolidation of the former employing entity with the Company or an Affiliate or the acquisition by the Company or an Affiliate of property or stock of the former employing corporation. The Committee may direct that the substitute awards be made on such terms and conditions as the Committee considers appropriate in the circumstances.

 

15. Amendment of the Plan. The Board of Directors may amend the Plan from time to time in such manner as it may deem advisable; provided that, without obtaining stockholder approval, the Board of Directors may not: (i) increase the maximum number of Shares as to which Awards may be granted, except for adjustments pursuant to Section 13; (ii) materially expand the eligible participants; or (iii) otherwise adopt any amendment constituting a change requiring stockholder approval under applicable laws or applicable listing requirements of the Nasdaq Stock Market or any other exchange on which the Company’s securities are listed. No amendment to the Plan shall adversely materially affect any outstanding Award, however, without the consent of the Grantee.

 

16. No Commitment to Retain. The grant of an Award shall not be construed to imply or to constitute evidence of any agreement, express or implied, on the part of the Company or any Affiliate to retain the Grantee in the employ of the Company or an Affiliate and/or as a member of the Company’s Board of Directors or in any other capacity.

 

17. Withholding of Taxes. Whenever the Company proposes or is required to deliver or transfer Shares in connection with an Award or the exercise of an Option, the Company shall have the right to (a) require the recipient to remit or otherwise make available to the Company an amount sufficient to satisfy any federal, state and/or local withholding tax requirements prior to the delivery or transfer of any certificate or certificates for such Shares or (b) take whatever other action it deems necessary to protect its interests with respect to tax liabilities. The Company’s obligation to make any delivery or transfer of Shares shall be conditioned on the Grantee’s compliance, to the Company’s satisfaction, with any withholding requirement. The Grantee may elect to make payment for the withholding of federal, state and local taxes by one or a combination of the following methods: (i) payment of an amount in cash equal to the amount to be withheld (including cash obtained through the sale of the Shares acquired on exercise of an Option or SAR, upon the lapse of restrictions on Restricted Stocker, or upon the transfer of Shares, through a broker-dealer to whom the Grantee has submitted irrevocable instructions to deliver promptly to the Company, the amount to be withheld); (ii) delivering part or all of the amount to be withheld in the form of Shares valued at Fair Market Value; (iii) requesting the Company to withhold from those Shares that would otherwise be received upon exercise of the Option or SAR, upon the lapse of restrictions on Restricted Stock or Restricted Stock Unit, or upon the transfer of Shares, a number of Shares having a Fair Market Value; or (iv) withholding from any compensation otherwise due to the Grantee.

 

18. Source of Shares; Fractional Shares. The Common Stock that may be issued (which term includes Common Stock reissued or otherwise delivered) pursuant to an Award under the Plan shall be authorized but unissued Stock. No fractional shares of Stock shall be issued under the Plan, and shares issued shall be rounded down to the nearest whole share, but fractional interests may be accumulated pursuant to the terms of an Award. Notwithstanding anything in the Plan to the contrary, the Company may satisfy its obligation to issue Shares hereunder by book-entry registration.

 

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19. Deferred Arrangements. The Committee may permit or require the deferral of any award payment into a deferred compensation arrangement, subject to such rules and procedures as it may establish, which may include provisions for the payment or crediting of interest or Dividend Equivalents, including converting such credits into deferred Common Stock equivalents. Any such deferrals shall be made in a manner that complies with Code Section 409A.

 

20. Parachute Limitations. Notwithstanding any other provision of this Plan or of any other agreement, contract, or understanding heretofore or hereafter entered into by a Grantee with the Company or any Affiliate, except an agreement, contract, or understanding that expressly addresses Section 280G or Section 4999 of the Code (an “Other Agreement”), and notwithstanding any formal or informal plan or other arrangement for the direct or indirect provision of compensation to the Grantee (including groups or classes of Grantees or beneficiaries of which the Grantee is a member), whether or not such compensation is deferred, is in cash, or is in the form of a benefit to or for the Grantee (a “Benefit Arrangement”), if the Grantee is a “disqualified individual,” as defined in Section 280G(c) of the Code, any Option, Restricted Stock, Restricted Stock Unit, Stock Appreciation Right or Dividend Equivalent Right held by that Grantee and any right to receive any payment or other benefit under this Plan shall not become exercisable or vested to the extent that such right to exercise, vesting, payment, or benefit, taking into account all other rights, payments, or benefits to or for the Grantee under this Plan, all Other Agreements, and all Benefit Arrangements, would cause any payment or benefit to the Grantee under this Plan to be subject to excise tax under Code Section 4999; provided, however, that the foregoing limitation on Options or Awards under the Plan shall only be applicable to the extent that the imposition of such limitation is, on a net after tax basis, beneficial to the Grantee. The Committee shall have the authority to determine what restrictions and/or reductions in payments shall be made under this Section 20 in order to avoid the detrimental tax consequences of Code Section 4999, and may use such authority to cause a reduction to payments or benefits that would be made by reason of contracts, agreements or arrangements that are outside the scope of the Plan, to the extent such a reduction would result in a greater, net after-tax benefit to the Grantee.

 

21. Section 409A. The Committee intends to comply with Section 409A of the Code (“Section 409A”) with regard to any Awards hereunder that constitute nonqualified deferred compensation within the meaning of Section 409A, and otherwise to provide Awards that are exempt from Section 409A. If a Grant is subject to Section 409A of the Code, (i) distributions shall only be made in a manner and upon an event permitted under Section 409A of the Code, (ii) payments to be made upon a termination of employment or service shall only be made upon a “separation from service” under section 409A of the Code, (iii) unless the Grant specifies otherwise, each installment payment shall be treated as a separate payment for purposes of Section 409A of the Code, and (iv) in no event shall a Grantee, directly or indirectly, designate the calendar year in which a distribution is made except in accordance with Section 409A of the Code. Any Grant that is subject to Section 409A of the Code and that is to be distributed to a Key Employee (as defined below) upon separation from service shall be administered so that any distribution with respect to such Grant shall be postponed for six months following the date of the Grantee’s separation from service (unless an earlier death), if required by Section 409A. The determination of Key Employees, including the number and identity of persons considered Key Employees and the identification date, shall be made by the Committee or its delegate each year in accordance with section 416(i) of the Code and the “specified employee” requirements of Section 409A of the Code. Notwithstanding anything in the Plan or any Award Agreement to the contrary, each Grantee shall be solely responsible for the tax consequences of Grants under the Plan, and in no event shall the Company or any Affiliate of the Company have any responsibility or liability to the Grantee or any other person if a Grant does not meet any applicable requirements of Section 409A of the Code. Although the Company intends to administer the Plan to prevent taxation under Section 409A of the Code, the Company does not represent or warrant that the Plan or any Grant complies with any provision of federal, state, local or other tax law.

 

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22. Unfunded Status of Plan. The Plan shall be unfunded. Neither the Company, nor the Board of Directors nor the Committee shall be required to segregate any assets that may at any time be represented by Awards made pursuant to the Plan. Neither the Company, nor the Board of Directors, nor the Committee shall be deemed to be a trustee of any amounts to be paid or securities to be issued under the Plan.

 

23. Compensation Recovery.

 

(a) In the event the Company is required to provide an accounting restatement for any of the prior three fiscal years of the Company for which audited financial statements have been completed as a result of material noncompliance with financial reporting requirements under federal securities laws (a “Restatement”), the amount of any Excess Compensation (as defined below) realized by an any Executive Officer (as defined below) shall be subject to recovery by the Company.

 

(b) For purposes of this Section 23:

 

(i) An “Executive Officer” shall mean any officer of the Company who holds an office of executive vice president or above; and

 

(ii) “Excess Compensation” shall mean the excess of (i) the actual amount of cash-based or equity-based incentive compensation received by an Executive Officer over (ii) the compensation that would have been received based on the restated financial results during the three-year period preceding the date on which the Company is required to prepare such restatement.

 

(c) Recovery of Excess Compensation under this Section 23 shall not preclude the Company from seeking relief under any other agreement, policy or law. The Company’s recoupment rights under this Section 23 shall be in addition to, and not in lieu of, actions that the Company may take to remedy or discipline any act of misconduct by an Executive Officer including, but not limited to, termination of employment or initiation of appropriate legal action.

 

(d) The recovery of compensation under this Section 23 is separate from and in addition to the compensation recovery requirements of Section 304 of the Sarbanes-Oxley Act of 2002 that are applicable to the Company’s Chief Executive Officer and Chief Financial Officer, and the Committee shall reduce the recoupment under this Section 23 by any amounts paid to the Company by the Chief Executive Officer and Chief Financial Officer pursuant to such section.

 

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24. Permitted Transfers. Notwithstanding anything contained herein to the contrary, Awards (other than ISOs and corresponding Awards), may be transferred, without consideration, to a Permitted Transferee. For this purpose, a “Permitted Transferee” in respect of a Grantee means any member of the Immediate Family of such Grantee, any trust of which all of the primary beneficiaries are such Grantee or members of his or her Immediate Family, or any partnership (including limited liability companies and similar entities) of which all of the partners or members are such Grantee or members of his or her Immediate Family; and the “Immediate Family” of a Grantee means the Grantee’s spouse, any person sharing the Grantee’s household (other than a tenant or employee), children, stepchildren, grandchildren, parents, stepparents, siblings, grandparents, nieces and nephews. Such Award may be exercised by such Permitted Transferee in accordance with the terms of the Award Document. If so determined by the Committee, a Grantee may, in the manner established by the Committee, designate a beneficiary or beneficiaries to exercise the rights of the Grantee, and to receive any distribution with respect to any Award upon the death of the Grantee. A transferee, beneficiary, guardian, legal representative or other person claiming any rights under the Plan from or through any Grantee shall be subject to and consistent with the provisions of the Plan and any applicable Award Document, except to the extent the Plan and Award Document otherwise provide with respect to such persons, and to any additional restrictions or limitations deemed necessary or appropriate by the Committee.

 

25. Subplans. The Board may from time to time establish one or more sub-plans under the Plan for purposes of satisfying applicable blue sky, securities or tax laws of various jurisdictions. The Board shall establish such sub-plans by adopting supplements to the Plan setting forth (i) such limitations on the Committee’s discretion under the Plan as the Board deems necessary or desirable and (ii) such additional terms and conditions not otherwise inconsistent with the Plan as the Board shall deem necessary or desirable. All supplements adopted by the Board shall be deemed to be part of the Plan, but each supplement shall apply only to Grantees within the affected jurisdiction and the Company shall not be required to provide copies of any supplement to Grantees in any jurisdiction that is not affected.

 

26. No Obligation to Notify or Minimize Taxes. The Company shall have no duty or obligation to any Grantee to advise such Grantee as to the time or manner of exercising any Award. Furthermore, the Company shall have no duty or obligation to warn or otherwise advise such Grantee of a pending termination or expiration of an Award or a possible period in which the Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences of an Award to any person.

 

27. Governing Law. The validity, performance, construction and effect of this Plan shall, except to the extent preempted by federal law, be governed by the laws of the state of Delaware, without giving effect to principles of conflicts of law.

 

 

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Exhibit 10.8

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT, made as of January 4, 2021 (“Effective Date”), is by and between BM TECHNOLOGIES, INC., a Delaware corporation, with its main office located at 201 King of Prussia Road, Suite 240, Radnor, PA 19087 (“Company”) and Luvleen Sidhu (“Executive”).

 

Background

 

A. Company wishes to secure the continued services of Executive as the Company’s Chief Executive Officer on the terms and conditions set forth herein.

 

B.  Subject to the terms and conditions hereinafter, Executive is willing to enter into this Employment Agreement (this “Agreement”) upon the terms and conditions set forth.

 

C.  The Company’s Board of Directors has approved this Agreement.

 

NOW, THEREFORE, in consideration of the mutual promises and agreements set forth herein, the parties agree as follows:

 

1.   Employment. Company agrees to employ Executive as its Chief Executive Officer during the “Term” defined in Section 2 of this Agreement. Executive shall report to and be subject to the direction of the Board of Directors of the Company. Executive shall have the powers and authority ordinarily given to the position described above as provided under the Bylaws of the Company. Executive will have such duties as normally apply to such position. Executive shall devote all of her working time, abilities and attention to the business of the Company, and will fulfill all of the duties required of her as Chief Executive Officer. The services of Executive shall be rendered principally in New York but Executive shall undertake such traveling on behalf of Company as may be reasonably required.

 

2. Term of Employment. Subject to the terms and conditions of this Agreement, the initial term of employment hereunder shall be for the two (2)-year period commencing on the Effective Date and ending on the day preceding the two (2)-year anniversary of the Effective Date. Beginning on the (2)-year anniversary of the Effective Date and continuing each year thereafter, the term of employment hereunder shall be extended for another two (2) years, automatically, unless either party delivers notice to the contrary to the other party at least sixty (60) days prior to such two (2)-year anniversary, in which case the term of employment hereunder shall expire as of the date to which it was last extended pursuant to this sentence. Such notice shall be delivered in a manner consistent with the requirements of Section 12. References in this Agreement to the “Term” shall refer both to such initial term and any successive terms.

 

3. Compensation. In consideration of the services to be rendered by Executive, Company shall pay to Executive during the initial Term:

 

(a) A base salary of not less than Two Hundred Seventy Five Thousand dollars ($275,000) per annum for each year of the Term, payable in equal installments over such payroll cycles as the Company pays its executive officers generally, with any salary for initial or final partial months or other payroll periods being prorated based on the number of calendar days in question. It is understood that the Board of Directors of the Company shall review Executive’s performance and make a determination regarding increases in her salary at least once in every calendar year during the Term.

 

 

 

 

(b)  Incentive Compensation in an amount, in such form, and at such time as is provided in such executive incentive plan for Executive, either alone or for Executive and other officers and management employees of the Company, as shall be approved by the Board of Directors of the Company and in effect from time to time. Such incentive compensation may take the form of cash payments (“Cash Bonus”), transfers of stock, stock appreciation awards, restricted stock units or stock options (collectively, “Equity Awards”). Equity Awards shall be subject to such restrictions, vesting and other conditions and limitations as set forth in such executive incentive plan. For purposes of this Agreement, Cash Bonus and Equity Awards do not include any incentive compensation from Customers Bancorp, Inc. and Customers Bank.