RIGHT OF FIRST REFUSAL
EXHIBIT 99.1
THIS RIGHT OF FIRST REFUSAL (the “Agreement”) is made as of this February 7, 2020, by and among Tectonic Financial, Inc., a Texas corporation (the “Company”), and the individuals listed on Schedule A hereto (the “Holders”).
WHEREAS, each Holder is the beneficial owner of the number of shares of common stock of the Company, par value $0.01 per share (the “Common Stock”), or of options to purchase Common Stock, set forth opposite the name of such Holder on Schedule A;
WHEREAS, the Company desires to provide continuity with respect to the ownership of its Common Stock and to provide that its Common Stock is not owned in significant quantities by parties against which it may compete or whom are not considered by the board of directors of the Company to be long-term investors; and
WHEREAS, the Holders share this desire and desire to enter into this Agreement, pursuant to which each Holder provides the Company and the other Holders a right of first refusal on the purchase and sale of their Common Stock, subject to certain limitations and other terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual promises, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1.1 “Affiliate” means, with respect to any specified Person, any other who directly or indirectly, controls, is controlled by or is under common control with such Person, including without limitation any general partner, managing member, officer or director of such Person, or any venture capital fund now or hereafter existing which is controlled by one or more general partners or managing members of, or shares the same management company with, such Person.
1.2 “Common Stock” means shares of common stock of the Company, par value $0.01 per share.
1.3 “Company Notice” means written notice from the Company notifying the selling Holders that the Company intends to exercise its Right of First Refusal as to some or all of the Transfer Stock with respect to any Proposed Holder Transfer.
1.4 “Exercise Notice” means written notice from a Holder notifying the Company and the selling Holder that such Holder intends to exercise its Secondary Refusal Right as to a portion of the Transfer Stock with respect to any Proposed Holder Transfer.
1.5 “Holders” means the persons named on Schedule A hereto, each person to whom the rights of a Holder are assigned pursuant to Subsection 3.1, each person who hereafter becomes a signatory to this Agreement pursuant to Subsection 5.9 or 5.15 and any one of them, as the context may require.
1.6 “Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity.
1.7 “Proposed Holder Transfer” means any assignment, sale, offer to sell, disposition of or any other like transfer of any Transfer Stock (or any interest therein) proposed by any of the Holders.
1.8 “Proposed Transfer Notice” means written notice from a Holder setting forth the terms and conditions of a Proposed Holder Transfer.
1.9 “Prospective Transferee” means any person to whom a Holder proposes to make a Proposed Holder Transfer.
1.10 “Right of First Refusal” means the right, but not an obligation, of the Company, or its permitted transferees or assigns, to purchase some or all of the Transfer Stock with respect to a Proposed Holder Transfer, on the terms and conditions specified in the Proposed Transfer Notice.
1.11 “Secondary Notice” means written notice from the Company notifying the Holders, including the selling Holder, that the Company does not intend to exercise its Right of First Refusal as to all shares of Transfer Stock with respect to any Proposed Holder Transfer.
1.12 “Secondary Refusal Right” means the right, but not an obligation, of each Holder to purchase up to its pro rata portion (based upon the total number of shares of Common Stock then held by all Holders) of any Transfer Stock not purchased pursuant to the Right of First Refusal, on the terms and conditions specified in the Proposed Transfer Notice.
1.13 “Transfer Stock” means shares of Common Stock owned by a Holder, or issued to a Holder after the date hereof (including, without limitation, in connection with any stock split, stock dividend, recapitalization, reorganization, or the like).
1.14 “Undersubscription Notice” means written notice from a Holder notifying the Company and the selling Holder that such Holder intends to exercise its option to purchase all or any portion of the Transfer Stock not purchased pursuant to the Right of First Refusal or the Secondary Refusal Right.
2. Agreement Among the Company and the Holders.
(a) Grant. Subject to the terms of Section 3 below, each Holder hereby unconditionally and irrevocably grants to the Company a Right of First Refusal to purchase all or any portion of Transfer Stock that such Holder may propose to transfer in a Proposed Holder
Transfer, at the same price and on the same terms and conditions as those offered to the Prospective Transferee.
2.2 Effect of Failure to Comply.
any custodian or trustee of any trust, partnership or limited liability company for the benefit of, or the ownership interests of which are owned wholly by, such Holder or any such family members, (d) to a sale or transfer of less than 10,000 shares of Transfer Stock within thirty (30) days (unless such sale or transfer is part of a series of sales or transfers to a single purchaser), (e) to sales of Transfer Stock on a national securities exchange, (f) to the transfer of Transfer Stock as a result of foreclosure in a margin account or otherwise on such Transfer Stock, (g) to a gift or transfer of Transfer Stock to a 501(c)(3) or other charitable organization, or (h) to the sale or transfer of Transfer Stock at the direction of any regulatory agency with oversight of the Company or its Affiliates; provided that in the case of clause (a), (c) or (d), the Holder shall deliver prior written notice to the Holders of such pledge, gift or transfer and such shares of Transfer Stock shall at all times remain subject to the terms and restrictions set forth in this Agreement and such transferee shall, as a condition to such issuance, deliver a counterpart signature page to this Agreement as confirmation that such transferee shall be bound by all the terms and conditions of this Agreement as a Holder (but only with respect to the securities so transferred to the transferee), including the obligations of a Holder with respect to Proposed Holder Transfers of such Transfer Stock pursuant to Section 2; and provided, further, in the case of any transfer pursuant to clause (a) or (c) above, that such transfer is made pursuant to a transaction in which there is no consideration actually paid for such transfer.
THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO, AND IN CERTAIN CASES PROHIBITED BY, THE TERMS AND CONDITIONS OF A CERTAIN RIGHT OF FIRST REFUSAL BY AND AMONG THE SHAREHOLDER, THE CORPORATION AND CERTAIN OTHER HOLDERS OF STOCK OF THE CORPORATION. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION.
Each Holder agrees that the Company may instruct its transfer agent to impose transfer restrictions on the shares notated with the legend referred to in this Section 4 above to enforce the provisions
of this Agreement, and the Company agrees to promptly do so. The legend shall be removed upon termination of this Agreement at the request of the holder.
5.4 Dispute Resolution. Any unresolved controversy or claim arising out of or relating to this Agreement, except as (i) otherwise provided in this Agreement, or (ii) any such controversies or claims arising out of either party’s intellectual property rights for which a provisional remedy or equitable relief is sought, shall be submitted to arbitration by one arbitrator mutually agreed upon by the parties, and if no agreement can be reached within thirty (30) days after names of potential arbitrators have been proposed by the American Arbitration Association (the “AAA”), then by one arbitrator having reasonable experience in corporate finance transactions of the type provided for in this Agreement and who is chosen by the AAA. The arbitration shall take place in Dallas Texas, in accordance with the AAA rules then in effect, and judgment upon any award rendered in such arbitration will be binding and may be entered in any court having jurisdiction thereof. There shall be limited discovery prior to the arbitration hearing as follows: (a) exchange of witness lists and copies of documentary evidence and documents relating to or arising out of the issues to be arbitrated, (b) depositions of all party witnesses and (c) such other depositions as may be allowed by the arbitrators upon a showing of good cause. Depositions shall be conducted in accordance with the Texas Civil Practice Law and Rules, the arbitrator shall be required to provide in writing to the parties the basis for the award or order of such arbitrator, and a court reporter shall record all hearings, with such record constituting the official transcript of such proceedings. The prevailing party shall be entitled to reasonable attorney’s fees, costs, and necessary disbursements in addition to any other relief to which such party may be entitled. Each of the parties to this Agreement consents to personal jurisdiction for any equitable action sought in the U.S. District Court for the Northern District of Texas or any court of the State of Dallas, sitting in Dallas County, having subject matter jurisdiction.
of or exceptions to any term, condition or provision of this Agreement, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.
(a) The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and permitted assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
(b) Any successor or permitted assignee of any Holder, including any Prospective Transferee who purchases shares of Transfer Stock in accordance with the terms hereof, shall deliver to the Company and the Holders, as a condition to any transfer or assignment, a counterpart signature page hereto pursuant to which such successor or permitted assignee shall confirm their agreement to be subject to and bound by all of the provisions set forth in this Agreement that were applicable to the predecessor or assignor of such successor or permitted assignee.
(c) The rights of the Holders hereunder are not assignable without the Company’s written consent (which shall not be unreasonably withheld, delayed or conditioned), except by a Holder to any Affiliate, it being acknowledged and agreed that any such assignment shall be subject to and conditioned upon any such assignee’s delivery to the Company and the other Holders of a counterpart signature page hereto pursuant to which such assignee shall confirm its agreement to be subject to and bound by all of the provisions set forth in this Agreement that were applicable to the assignor of such assignee.
(d) Except in connection with an assignment by the Company by operation of law to the acquirer of the Company, the rights and obligations of the Company hereunder may not be assigned under any circumstances.
5.11 Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Texas.
[Signature Pages Follow]
COMPANY: |
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TECTONIC FINANCIAL, INC. |
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By: |
/s/ A. Xxxx Xxxxxxx |
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Name: A. Xxxx Xxxxxxx, CEO |
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HOLDERS: |
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THE XXXXXXX 2018 IRREVOCABLE TRUST |
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By: |
/s/ A. Xxxx Xxxxxxx |
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Name: A. Xxxx Xxxxxxx, Trustee |
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XXXXXXX TECTONIC FLP LP |
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By: |
/s/ A. Xxxx Xxxxxxx |
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Name: A. Xxxx Xxxxxxx, CEO of the general partner of Xxxxxxx Tectonic FLP LP |
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By: |
/s/ A. Xxxx Xxxxxxx |
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Name: XXX fbo Xxxxxx Xxxx Xxxxxxx Xxxxxxxx LLC as Custodian Rollover Account |
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By: |
/s/ Xxxxxx X. Xxxx |
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Name: Xxxxxx X. Xxxx |
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By: |
/s/ Xxxxxxx X. Xxxx |
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Name: Xxxxxxx X. Xxxx |
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By: |
/s/ Xxxxxxx X. Xxxx |
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Name: XXX fbo Xxxxxxx X. Xxxx Xxxxxxxx LLC as Custodian Rollover Account |
Signature Page to Right of First Refusal - 1
By: |
/s/ Xxxxxx X. Xxxxx |
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Name: Xxxxxx X. Xxxxx |
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By: |
/s/ Xxxxxxxx Xxxxx |
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Name: XXX fbo Xxxxxxxx Xxxxx Xxxxxxxx LLC as Custodian Rollover Account |
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By: |
/s/ Xxxxxx X. Xxxxx |
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Name: XXX fbo Xxxxxx Xxxxxxx Xxxxx Xxxxxxxx LLC as Custodian Rollover Account |
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By: |
/s/ Xxxxxx X. Xxxxxxx |
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Name: Xxxxxx X. Xxxxxxx |
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By: |
/s/ Xxxxxx X. Xxxxxx |
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Name: Xxxxxx X. Xxxxxx |
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By: |
/s/ Xxxxxx X. Xxxx |
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Name: Xxxxxx X. Xxxx |
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By: |
/s/ Xxxxxx X. Xxxx |
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Name: XXX fbo Xxxxxx X. Xxxx Xxxxxxxx LLC as Custodian Rollover Account |
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By: |
/s/ Xxxxxx X. Xxxxxxxx |
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Name: Xxxxxx X. Xxxxxxxx |
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By: |
/s/ Xxxxxx X. Xxxxxxxx |
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Name: XXX fbo Xxxxxx X. Xxxxxxxx Xxxxxxxx LLC as Custodian Rollover Account |
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By: |
/s/ Xxxxx X. Xxxxx |
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Name: Xxxxx X. Xxxxx |
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By: |
/s/ Xxxxx X. Xxxxx |
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Name: XXX fbo Xxxxx X. Xxxxx Xxxxxxxx LLC as Custodian Rollover Account |
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By: |
/s/ Xxxxxxx X. Xxxxxxx |
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Name: Xxxxxxx X. Xxxxxxx |
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By: |
/s/ Xxxx X. Xxx |
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Name: Xxxx X. Xxx |
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By: |
/s/ Xxx X. Xxxxxxx |
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Name: Xxx X. Xxxxxxx |
Signature Page to Right of First Refusal - 2
XXX X. XXXXXXX CHILDREN’S TRUST DTD 2003 |
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By: |
/s/ Xxx Xxxx |
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Name: Xxx Xxxx, Trustee |
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By: |
/s/ Xxx Xxxx |
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Name: Xxx Xxxx |
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By: |
/s/ Xxxxx Xxxxx Xxxx |
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Name: Xxxxx Xxxxx Xxxx |
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By: |
/s/ Xxx X. Xxxxxx |
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Name: Xxx X. Xxxxxx |
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By: |
/s/ Xxxxx X. X. Xxxxxxx |
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Name: XXX fbo Xxxxx X. X. Xxxxxxx Xxxxxxxx LLC as Custodian Rollover Account |
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By: |
/s/ Xxxxx X. X. Xxxxxxx |
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Name: Xxxxx X. X. Xxxxxxx |
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By: |
/s/ Xxxxx Xxxxxxx |
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Name: Xxxxx X. Xxxxxxx |
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By: |
/s/ Xxxxxxxxxxx X. Xxxxxxx |
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Name: Xxxxxxxxxxx X. Xxxxxxx |
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By: |
/s/ Xxxxxxxxxxx X. Xxxxxxx |
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Name: XXX fbo Xxxxxxxxxxx X. Xxxxxxx Xxxxxxxx LLC as Custodian Rollover Account |
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By: |
/s/ Xxxxxxxx Xxxxx |
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Name: Xxxxxxxx Xxxxx |
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By: |
/s/ Xxxxxxx Xxxxxxx |
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Name: Xxxxxxx Xxxxxxx |
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By: |
/s/ Xxxxxxx Xxxxxxx |
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Name: SEP fbo Xxxxxxx Xxxxxxx Xxxxxxxx LLC as Custodian Rollover Account |
Signature Page to Right of First Refusal - 3
By: |
/s/ Xxxxxx Xxxxxxxxxxx |
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Name: Xxxxxx Xxxxxxxxxxx |
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By: |
/s/ Xxxxxxx Xxxxxx |
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Name: Xxxxxxx Xxxxxx |
Signature Page to Right of First Refusal - 4
SCHEDULE A
Relationship |
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XXX fbo Xxxxxx Xxxx Xxxxxxx Xxxxxxxx LLC as Custodian Rollover Account |
XXX of CEO of the Issuer |
19,500 |
Xxxxxxx Tectonic FLP LP |
Partnership controlled by CEO of the Issuer |
380,500 |
The Xxxxxxx 2018 Irrevocable Trust |
Trust controlled by CEO of the Issuer |
1,751,000 |
Xxxxxx X. Xxxx |
Executive Co-Chairman of the Issuer |
208,457 |
Xxxxxxx X. Xxxx |
Partner at Xxxx, Xxxxxxx & Associates, LLC (“Xxxx Xxxxxxx”) |
205,100 |
XXX fbo Xxxxxxx X. Xxxx Xxxxxxxx LLC as Custodian Rollover Account |
XXX of Partner at Xxxx Xxxxxxx |
10,000 |
Xxxxxx X. Xxxxx |
Partner at Xxxx Xxxxxxx |
205,100 |
XXX fbo Xxxxxxxx Xxxxx Xxxxxxxx LLC as Custodian Rollover Account |
XXX of Spouse of Partner at Xxxx Xxxxxxx |
5,000 |
XXX fbo Xxxxxx Xxxxxxx Xxxxx Xxxxxxxx LLC as Custodian Rollover Account |
XXX of Partner at Xxxx Xxxxxxx |
5,000 |
Xxxxxx X. Xxxxxxx |
Partner at Xxxx Xxxxxxx |
215,100 |
Xxxxxx X. Xxxxxx |
Partner at Xxxx Xxxxxxx |
215,100 |
Xxxxxx X. Xxxx |
Partner at Xxxx Xxxxxxx |
195,100 |
XXX fbo Xxxxxx X. Xxxx Xxxxxxxx LLC as Custodian Rollover Account |
XXX of Partner at Xxxx Xxxxxxx |
20,000 |
Xxxxxx X. Xxxxxxxx |
Partner at Xxxx Xxxxxxx |
208,108 |
XXX fbo Xxxxxx X. Xxxxxxxx Xxxxxxxx LLC as Custodian Rollover Account |
XXX of Partner at Xxxx Xxxxxxx |
6,992 |
Xxxxx X. Xxxxx |
Partner at Xxxx Xxxxxxx |
205,100 |
Holder | Relationship | Shares of Transfer Stock |
XXX fbo Xxxxx X. Xxxxx Xxxxxxxx LLC as Custodian Rollover Account |
XXX of Partner at Xxxx Xxxxxxx |
10,000 |
Xxxxxxx X. Xxxxxxx |
Partner at Xxxx Xxxxxxx |
215,100 |
Xxxx X. Xxx |
Partner at Xxxx Xxxxxxx |
215,100 |
Xxx X. Xxxxxxx |
Employee of Xxxxxxx Xxxxxx Xxxxxx LLC (“Xxxxxxx Xxxxxx”) |
153,600 |
Xxx X. Xxxxxxx Children’s Trust dtd 2003 |
Trust controlled by Employee of Xxxxxxx Xxxxxx |
109,714 |
Xxx Xxxx & Xxxxx Xxxxx Xxxx Jt Ten |
Employee of Xxxxxxx Xxxxxx and Spouse of Employee |
43,886 |
Xxxxxxxxxxx X. Xxxxxxx |
Employee of Xxxxxxx Xxxxxx |
52,972 |
XXX fbo Xxxxxxxxxxx X. Xxxxxxx Xxxxxxxx LLC as Custodian Rollover Account |
XXX of Employee of Xxxxxxx Xxxxxx |
12,857 |
Xxx X. Xxxxxx |
Employee of Xxxxxxx Xxxxxx |
65,829 |
XXX fbo Xxxxx X. X. Xxxxxxx Xxxxxxxx LLC as Custodian Rollover Account |
XXX of Employee of Xxxxxxx Xxxxxx |
12,857 |
Xxxxx X. X. Xxxxxxx & Xxxxx X. Xxxxxxx Xx Ten |
Employee of Xxxxxxx Xxxxxx and Spouse of Employee |
52,972 |
Xxxxxxxx Xxxxx |
Employee of Tectonic Advisors, LLC |
23,471 |
SEP fbo Xxxxxxx Xxxxxxx Pershing LLC as Custodian Rollover Account |
SEP of Partner at Xxxx Xxxxxxx |
8,000 |
Xxxxxxx Xxxxxxx |
Partner at Xxxx Xxxxxxx |
85,775 |
Xxxxxx Xxxxxxxxxxx |
Partner at Xxxx Xxxxxxx |
53,775 |
Xxxxxxx Xxxxxx |
President and Chief Operating Officer of the Issuer |
100,250 |
EXHIBIT A
FORM OF CONSENT OF SPOUSE
I, , spouse of , acknowledge that I have read the Right of First Refusal, dated as of February 7, 2020, to which this Consent is attached as Exhibit A (the “Agreement”), and that I know the contents of the Agreement. I am aware that the Agreement contains provisions regarding certain rights to certain other holders of Common Stock of the Tectonic Financial, Inc. (the “Company”) upon a Proposed Holder Transfer of shares of Transfer Stock of the Company which my spouse may own including any interest I might have therein.
I hereby agree that my interest, if any, in any shares of Transfer Stock of the Company subject to the Agreement shall be irrevocably bound by the Agreement and further understand and agree that any community property interest I may have in such shares of Transfer Stock of the Company shall be similarly bound by the Agreement.
I am aware that the legal, financial and related matters contained in the Agreement are complex and that I am free to seek independent professional guidance or counsel with respect to this Consent. I have either sought such guidance or counsel or determined after reviewing the Agreement carefully that I waive such right.
Dated as of the 7th day of February, 2020.
Signature | |
Printed Name | |
Spouse’s Printed Name |
Exhibit A to Right of First Refusal - 1