Exhibit 10.1

 

SUBORDINATED NOTE PURCHASE AGREEMENT

 

This SUBORDINATED NOTE PURCHASE AGREEMENT (this “Agreement”) is dated as of June
30, 2015, and is made by and among ConnectOne Bancorp, Inc., a New Jersey
corporation (“Company”), and the several purchasers of the Subordinated Notes
named on Schedule I hereto (each a “Purchaser” and collectively, the
“Purchasers”).

 

RECITALS

 

WHEREAS, Company has requested that the Purchasers purchase from Company up to
$50,000,000 in aggregate principal amount of Subordinated Notes (as defined
herein), which aggregate amount is intended to qualify as Tier 2 Capital (as
defined herein).

 

WHEREAS, Company has engaged Raymond James & Associates, Inc. (the “Raymond
James”) and Keefe, Bruyette and Woods, Inc. (“KBW”), as co-placement agents
(each, a “Placement Agent” and, collectively, the “Placement Agents” ) for the
offering of the Subordinated Notes.

 

WHEREAS, each of the Purchasers is an institutional accredited investor as such
term is contemplated by Rule 501 of Regulation D (“Regulation D”) promulgated
under the Securities Act of 1933, as amended (the “Securities Act”).

 

WHEREAS, the sale of the Subordinated Notes by Company is being made pursuant to
Rule 506(b) of Regulation D and pursuant to the Indenture (as defined below).

 

WHEREAS, each Purchaser is willing to purchase from Company a Subordinated Note
in the principal amount set forth in Schedule I (the “Subordinated Note Amount”)
in accordance with the terms, subject to the conditions and in reliance on, the
recitals, representations, warranties, covenants and agreements set forth herein
and in the Subordinated Notes.

 

NOW, THEREFORE, in consideration of the mutual covenants, conditions and
agreements herein contained and other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto hereby agree as
follows:

 

AGREEMENT

 

1.DEFINITIONS.

 

1.1        Defined Terms. The following capitalized terms generally used in this
Agreement and in the Subordinated Notes have the meanings defined or referenced
below. Certain other capitalized terms used only in specific sections of this
Agreement may be defined in such sections.

 

“Affiliate(s)” means, with respect to any Person, such Person’s immediate family
members, partners, members or parent and subsidiary corporations, and any other
Person directly or indirectly controlling, controlled by, or under common
control with said Person and their respective Affiliates.

 

“Agreement” has the meaning set forth in the preamble hereto.

 

“Bank” means ConnectOne Bank, a New Jersey-chartered commercial bank and wholly
owned subsidiary of Company.

 

“Business Day” means any day other than a Saturday, Sunday or any other day on
which banking institutions in the State of New Jersey are permitted or required
by any applicable law or executive order to close.

 

“Closing” has the meaning set forth in Section 2.4.

 

“Closing Date” means June 30, 2015.

 

“Company” has the meaning set forth in the preamble hereto and shall include any
successors to Company.

 

“Company’s Liabilities” means Company’s obligations under the Transaction
Documents.

 

“Company’s SEC Reports” means (i) Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2014, as filed with the SEC, (ii) Company’s
Definitive Proxy Statement on Schedule 14A related to its 2015 Annual Meeting of
Shareholders, as filed with the SEC, (iii) any Current Report on Form 8-K, as
filed or furnished by Company with the SEC since January 1, 2015, or (iv)
Company’s Quarterly Reports on Form 10-Q for the quarterly period ended on March
31, 2015, as filed with the SEC pursuant to the requirements of the Exchange
Act.

 

“Disbursement” has the meaning set forth in Section 3.1.

 

“Equity Interest” means any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person which is not a corporation, and any
and all warrants, options or other rights to purchase any of the foregoing.

 

“Exchange Act” has the meaning set forth in Section 4.8.

 

“FDIC” means the Federal Deposit Insurance Corporation.

 

“GAAP” means generally accepted accounting principles in effect from time to
time in the United States of America.

 

“Governmental Agency(ies)” means, individually or collectively, any federal,
state, county or local governmental department, commission, board, regulatory
authority or agency (including, without limitation, each applicable Regulatory
Agency) with jurisdiction over Company.

 

“Governmental Licenses” has the meaning set forth in Section 4.3.

 

“Hazardous Materials” means flammable explosives, asbestos, urea formaldehyde
insulation, polychlorinated biphenyls, radioactive materials, hazardous wastes,
toxic or contaminated substances or similar materials, including, without
limitation, any substances which are “hazardous substances,” “hazardous wastes,”
“hazardous materials” or “toxic substances” under the Hazardous Materials Laws
and/or other applicable environmental laws, ordinances or regulations.

 

“Hazardous Materials Laws” mean any laws, regulations, permits, licenses or
requirements pertaining to the protection, preservation, conservation or
regulation of the environment which relates to real property, including: the
Clean Air Act, as amended, 42 U.S.C. Section 7401 et seq.; the Federal Water
Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq.; the Resource
Conservation and Recovery Act of 1976, as amended, 42 U.S.C. Section 6901 et
seq.; the Comprehensive Environment Response, Compensation and Liability Act of
1980, as amended (including the Superfund Amendments

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and Reauthorization Act of 1986), 42 U.S.C. Section 9601 et seq.; the Toxic
Substances Control Act, as amended, 15 U.S.C. Section 2601 et seq.; the
Occupational Safety and Health Act, as amended, 29 U.S.C. Section 651, the
Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Section
11001 et seq.; the Mine Safety and Health Act of 1977, as amended, 30 U.S.C.
Section 801 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300f et
seq.; and all comparable state and local laws, laws of other jurisdictions or
orders and regulations.

 

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

 

“Indenture” shall mean the indenture, dated as of the date hereof, by and
between the Company and U.S. Bank National Association, as trustee,
substantially in the form attached hereto as Exhibit A, as the same may be
amended or supplemented from time to time in accordance with the terms thereof.

 

“Leases” means all leases, licenses or other documents providing for the use or
occupancy of any portion of any Property, including all amendments, extensions,
renewals, supplements, modifications, sublets and assignments thereof and all
separate letters or separate agreements relating thereto.

 

“Material Adverse Effect” means, with respect to any Person, any change or
effect that (i) is or would be reasonably likely to be material and adverse to
the financial position, results of operations or business of such Person, or
(ii) would materially impair the ability of any Person to perform its respective
obligations under any of the Transaction Documents, or otherwise materially
impede the consummation of the transactions contemplated hereby; provided,
however, that “Material Adverse Effect” shall not be deemed to include the
impact of (1) changes in banking and similar laws, rules or regulations of
general applicability or interpretations thereof by Governmental Agencies, (2)
changes in GAAP or regulatory accounting requirements applicable to financial
institutions and their holding companies generally, (3) changes after the date
of this Agreement in general economic or capital market conditions affecting
financial institutions or their market prices generally and not specifically
related to Company or Purchasers, (4) direct effects of compliance with this
Agreement on the operating performance of Company or Purchasers, including
expenses incurred by Company or Purchasers in consummating the transactions
contemplated by this Agreement, and (5) the effects of any action or omission
taken by Company with the prior written consent of Purchasers, and vice versa,
or as otherwise contemplated by this Agreement and the Subordinated Notes.

 

“Maturity Date” means July 1, 2025.

 

“Person” means an individual, a corporation (whether or not for profit), a
partnership, a limited liability company, a joint venture, an association, a
trust, an unincorporated organization, a government or any department or agency
thereof (including a Governmental Agency) or any other entity or organization.

 

“Placement Agent” or “Placement Agents” has the meaning set forth in the
Recitals.

 

“Property” means any real property owned or leased by Company or any Affiliate
or Subsidiary of Company.

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“Purchaser” or “Purchasers” has the meaning set forth in the preamble hereto.

 

“Registration Rights Agreement” means the Registration Rights Agreement, dated
as of the date hereof, by and among Company and the Purchasers in the form
attached as Exhibit B hereto.

 

“Regulation D” has the meaning set forth in the Recitals.

 

“Regulatory Agencies” means any federal or state agency charged with the
supervision or regulation of depositary institutions or holding companies of
depositary institutions, or engaged in the insurance of depositary institution
deposits, or any court, administrative agency or commission or other authority,
body or agency having supervisory or regulatory authority with respect to
Company, Bank or any of their Subsidiaries.

 

“SEC” means the Securities and Exchange Commission.

 

“Secondary Market Transaction” has the meaning set forth in Section 5.6.

 

“Securities Act” has the meaning set forth in the Recitals.

 

“Subordinated Note” means the Subordinated Note (or collectively, the
“Subordinated Notes”) in the form attached as an exhibit to the Indenture, as
amended, restated, supplemented or modified from time to time, and each
Subordinated Note delivered in substitution or exchange for such Subordinated
Note.

 

“Subordinated Note Amount” has the meaning set forth in the Recitals.

 

“Subsidiary” means with respect to any Person, any corporation or entity in
which a majority of the outstanding Equity Interest is directly or indirectly
owned by such Person.

 

“Tier 2 Capital” has the meaning given to the term “Tier 2 capital” in 12 C.F.R.
Part 208 and 12 C.F.R. Part 250, as amended, modified and supplemented and in
effect from time to time or any replacement thereof.

 

“Transaction Documents” has the meaning set forth in Section 3.2.1.

 

“Trustee” means the trustee reflected under the Indenture.

 

1.2        Interpretations. The foregoing definitions are equally applicable to
both the singular and plural forms of the terms defined. The words “hereof”,
“herein” and “hereunder” and words of like import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement. The word “including” when used in this Agreement without the
phrase “without limitation,” shall mean “including, without limitation.” All
references to time of day herein are references to Eastern Time unless otherwise
specifically provided. All references to the Agreement and Subordinated Notes
shall be deemed to be to such documents as amended, modified or restated from
time to time. With respect to any reference in this Agreement to any defined
term, (i) if such defined term refers to a Person, then it shall also mean all
heirs, legal representatives and permitted successors and assigns of such
Person, and (ii) if such defined term refers to a document, instrument or
agreement, then it shall also include any replacement, extension or other
modification thereof.

 

1.3        Exhibits Incorporated. All Exhibits attached are hereby incorporated
into this Agreement.

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2.SUBORDINATED DEBT.

 

2.1        Certain Terms. Subject to the terms and conditions herein contained,
Company proposes to issue and sell to the Purchasers, severally and not jointly,
Subordinated Notes, which will be issued pursuant to the Indenture, in an amount
equal to the aggregate of the Subordinated Note Amounts. Purchasers, severally
and not jointly, each agree to purchase the Subordinated Notes, which will be
issued pursuant to the Indenture, from Company on the Closing Date in accordance
with the terms of, and subject to the conditions and provisions set forth in,
this Agreement. The Subordinated Note Amounts shall be disbursed in accordance
with Section 3.1.

 

2.2        The Closing. The execution and delivery of the Transaction Documents
(the “Closing”) shall occur at the offices of Company at 10:00 a.m. (local time)
on the Closing Date, or at such other place or time or on such other date as the
parties hereto may agree.

 

2.3        Right of Offset. Each Purchaser hereby expressly waives any right of
offset it may have against Company.

 

2.4        Use of Proceeds. Company shall use the net proceeds from the sale of
Subordinated Notes (i) for, subject to approval by applicable Regulatory
Agencies, repayment of up to $11,250,000 aggregate liquidation value of its
Series B fixed rate cumulative perpetual preferred stock, (ii) to fund future
growth, (iii) to bolster regulatory capital at both the Bank and Company, and
(ii) for general corporate purposes.

 

3.DISBURSEMENT.

 

3.1        Disbursement. On the Closing Date, assuming all of the terms and
conditions set forth in Section 3.2 have been satisfied by Company and Company
has executed and delivered to Purchasers each of the Agreement and the
Subordinated Notes and any other related documents in form and substance
reasonably satisfactory to Purchasers, each Purchaser shall disburse in
immediately available funds the Subordinated Note Amount set forth next to its
name in Schedule I to Company in exchange for a Subordinated Note with a
principal amount equal to such Subordinated Note Amount (the “Disbursement”).
The Company will deliver to the respective Purchaser one or more certificates
representing the Subordinated Notes in definitive form (or provide evidence of
the same with the original to be delivered by the Trustee by overnight delivery
on the next calendar day in accordance with the delivery instructions of
Purchaser), registered in such names and denominations as such Purchasers may
request.

 

3.2        Conditions Precedent to Disbursement.

 

3.2.1     Conditions to Purchasers’ Obligation. The obligation of each Purchaser
to consummate the purchase of the Subordinated Notes to be purchased by them at
Closing and to effect the Disbursement is subject to delivery by or at the
direction of the Company to such Purchaser (or, with respect to the Indenture,
the Trustee) each of the following (or written waiver by such Purchaser prior to
the Closing of such delivery):

 

3.2.1.1 Transaction Documents. This Agreement, the Indenture, the Subordinated
Notes and the Registration Rights Agreement (collectively, the “Transaction
Documents”), each duly authorized and executed by Company.

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3.2.1.2 Authority Documents.

 

(a)A copy, certified by the Secretary or Assistant Secretary of Company, of the
Certificate of Incorporation, of Company;

 

(b)A certificate of good standing of Company issued by the Division of Taxation
of the State of New Jersey;

 

(c)A copy, certified by the Secretary or Assistant Secretary, of the Bylaws of
Company;

 

(d)A copy, certified by the Secretary or Assistant Secretary of Company, of the
resolutions of the board of directors (and any committee thereof) of Company
authorizing the execution, delivery and performance of the Transaction
Documents;

 

(e)An incumbency certificate of the Secretary or Assistant Secretary of Company
certifying the names of the officer or officers of Company authorized to sign
the Transaction Documents and the other documents provided for in this
Agreement; and

 

(f)The opinion of Windels, Marx, Lane & Mittendorf, LLP, counsel to the Company,
dated as of the Closing Date, substantially in the form set forth at Exhibit C
attached hereto addressed to the Purchasers and Placement Agents.

 

3.2.1.3 Officer’s Certificate. A certificate signed on behalf of Company by a
senior executive officer certifying that the representations and warranties of
Company set forth in this Agreement are true and correct in all respects on and
as of the date of this Agreement and on and as of the Closing Date as though
made on and as of the Closing Date, except where the failure to be true and
correct (without regard to any materiality or Material Adverse Effect
qualifications contained therein), individually or in the aggregate, would not
be reasonably likely to have a Material Adverse Effect (and except that (i)
representations and warranties made as of a specified date shall only be
required to be true and correct as of such date and (ii) the representations and
warranties of Company set forth in Sections 4.2.1, 4.2.3 and 4.5 shall be true
and correct in all respects).

 

3.2.1.4 Other Documents. Such other certificates, affidavits, schedules,
resolutions, notes and/or other documents which are provided for hereunder or as
a Purchaser may reasonably request.

 

3.2.1.5 Aggregate Investments. Prior to, or contemporaneously with the Closing,
each of the Purchasers set forth on Schedule I shall have actually subscribed
for the amounts set forth opposite such Purchaser’s name on Schedule I.

 

3.2.2     Conditions to Company’s Obligation.

 

3.2.2.1 Since the date of this Agreement, there shall not have been any action
taken, or any law, rule or regulation enacted, entered, enforced or deemed
applicable to Company or its Subsidiaries or the transactions contemplated by
this Agreement by any Governmental Agency which imposes any restriction or
condition that Company determines, in its reasonable good faith judgment, is
materially and unreasonably burdensome on Company’s business or would materially
reduce the economic benefits of the transactions contemplated by this Agreement
to Company to such a degree that

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Company would not have entered into this Agreement had such condition or
restriction been known to it on the date hereof.

 

3.2.2.2 With respect to a given Purchaser, the obligation of Company to
consummate the sale of the Subordinated Notes and to effect the Closing is
subject to delivery by or at the direction of such Purchaser to Company each of
the following (or written waiver by Company prior to the Closing of such
delivery):

 

(a)Transaction Documents. This Agreement and the Registration Rights Agreement,
each duly authorized and executed by such Purchaser.

 

(b)Officer’s Certificate. A certificate signed on behalf of such Purchaser by a
duly authorized person certifying that the representations and warranties of
such Purchaser set forth in this Agreement are true and correct in all respects
on and as of the date of this Agreement and on and as of the Closing Date as
though made on and as of the Closing Date.

 

4.REPRESENTATIONS AND WARRANTIES OF COMPANY.

 

Company hereby represents and warrants to each Purchaser as follows:

 

4.1        Organization and Authority.

 

4.1.1     Organization Matters of Company and Its Subsidiaries.

 

4.1.1.1 Company is validly existing and in good standing under the laws of the
State of New Jersey and has all requisite corporate power and authority to
conduct its business and activities as presently conducted, to own its
properties, and to perform its obligations under the Transaction Documents.
Company is duly qualified as a foreign corporation to transact business and is
in good standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect. Company is duly
registered as a bank holding company under the Bank Holding Company Act of 1956,
as amended.

 

4.1.1.2 Each Subsidiary either has been duly organized and is validly existing
as a corporation or limited liability company, or has been duly chartered and is
validly existing as a New Jersey-chartered commercial bank, in each case in good
standing under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and to conduct its
business and is duly qualified as a foreign corporation to transact business and
is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect. All of the issued and
outstanding shares of capital stock or other equity interests in each Subsidiary
have been duly authorized and validly issued, are fully paid and non-assessable
and are owned by Company, directly or through Subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance or claim; none of the
outstanding shares of capital stock of, or other equity interests in, any
Subsidiary were issued in violation of the preemptive or similar rights of any
securityholder of such Subsidiary or any other entity.

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4.1.1.3 Bank is a New Jersey-chartered commercial bank. The deposit accounts of
Bank are insured by the FDIC up to applicable limits. Neither Company nor Bank
has received any notice or other information indicating that Bank is not an
“insured depository institution” as defined in 12 U.S.C. Section 1813, nor has
any event occurred which could reasonably be expected to adversely affect the
status of Bank as an FDIC-insured institution.

 

4.1.2     Capital Stock and Related Matters. All of the outstanding capital
stock of Company has been duly authorized and validly issued and is fully paid
and nonassessable. There are, as of the date hereof, no outstanding options,
rights, warrants or other agreements or instruments obligating Company to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares of
the capital stock of Company or obligating Company to grant, extend or enter
into any such agreement or commitment to any Person other than Company except
pursuant to Company’s equity incentive plans duly adopted by Company’s Board of
Directors.

 

4.1.3     Subsidiaries. Each of Company’s Subsidiaries that is a “significant
subsidiary” as defined in Rule 1-02 of Regulation S-X is reflected in its Annual
Report on Form 10 K for the fiscal year ended December 31, 2014.

 

4.2        No Impediment to Transactions.

 

4.2.1     Transaction is Legal and Authorized. The issuance of the Subordinated
Notes pursuant to the Indenture, the borrowing of the aggregate of the
Subordinated Note Amounts, the execution of the Transaction Documents and
compliance by Company with all of the provisions of the Transaction Documents
are within the corporate and other powers of Company.

 

4.2.2     Agreement, Indenture and Registration Rights Agreement. The Agreement,
the Indenture and the Registration Rights Agreement have been duly authorized,
executed and delivered, and, assuming due authorization, execution and delivery
by the other parties thereto, including the Trustee for purposes of the
Indenture, are the legal, valid and binding obligations of Company, enforceable
in accordance with their terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors’ rights generally or by general equitable
principles.

 

4.2.3     Subordinated Notes. The Subordinated Notes have been duly authorized
by the Company and when executed by the Company and completed and authenticated
by the Trustee in accordance with, and in the forms contemplated by, the
Indenture and issued, delivered and paid for as provided in this Agreement, will
have been duly issued under the Indenture and will constitute legal, valid and
binding obligations of Company, entitled to the benefit of the Indenture, and
enforceable in accordance with their terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors’ rights generally or by general
equitable principles. When executed and delivered, the Subordinated Notes will
be substantially in the form contemplated by the Indenture.

 

4.2.4     No Defaults or Restrictions. Neither the execution and delivery of the
Transaction Documents nor compliance with their respective terms and conditions
will (whether with or without the giving of notice or lapse of time or both) (i)
violate, conflict with or result in a breach of, or constitute a default under:
(1) the Certificate of Incorporation or Bylaws of Company; (2) any of the terms,
obligations, covenants, conditions or provisions of any corporate restriction or
of any contract, agreement, indenture, mortgage, deed of trust, pledge, bank
loan or credit agreement, or any other agreement or instrument to which Company
or Bank, as applicable, is now a party or by which it or any of its properties
may be bound or affected; (3) any judgment, order, writ, injunction, decree or
demand of

8

any court, arbitrator, grand jury, or Governmental Agency; or (4) any statute,
rule or regulation applicable to Company, except, in the case of items (2), (3)
or (4), for such violations and conflicts that would not reasonably be expected
to have, singularly or in the aggregate, a Material Adverse Effect on Company,
or (ii) result in the creation or imposition of any lien, charge or encumbrance
of any nature whatsoever upon any property or asset of Company. Neither Company
nor Bank is in default in the performance, observance or fulfillment of any of
the terms, obligations, covenants, conditions or provisions contained in any
indenture or other agreement creating, evidencing or securing Indebtedness of
any kind or pursuant to which any such Indebtedness is issued, or any other
agreement or instrument to which Company or Bank, as applicable, is a party or
by which Company or Bank, as applicable, or any of its properties may be bound
or affected, except, in each case, only such defaults that would not reasonably
be expected to have, singularly or in the aggregate, a Material Adverse Effect
on Company.

 

4.2.5     Governmental Consent. No governmental orders, permissions, consents,
approvals or authorizations are required to be obtained by Company that have not
been obtained, and no registrations or declarations are required to be filed by
Company that have not been filed in connection with, or, in contemplation of,
the execution and delivery of, and performance under, the Transaction Documents,
except for applicable requirements, if any, of the Securities Act, the Exchange
Act or state securities laws or “blue sky” laws of the various states and any
applicable federal or state banking laws and regulations.

 

4.3        Possession of Licenses and Permits. Company and its Subsidiaries
possess such permits, licenses, approvals, consents and other authorizations
(collectively, “Governmental Licenses”) issued by the appropriate Governmental
Agencies necessary to conduct the business now operated by it except where the
failure to possess such Governmental Licenses would not, singularly or in the
aggregate, have a Material Adverse Effect on Company or such applicable
Subsidiary; Company and each Subsidiary of Company is in compliance with the
terms and conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, have a Material Adverse
Effect on Company or such applicable Subsidiary of Company; all of the
Governmental Licenses are valid and in full force and effect, except where the
invalidity of such Governmental Licenses or the failure of such Governmental
Licenses to be in full force and effect would not have a Material Adverse Effect
on Company or such applicable Subsidiary of Company; and neither Company nor any
Subsidiary of Company has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses.

 

4.4        Financial Condition.

 

4.4.1     Company Financial Statements. The financial statements of Company
included in Company’s SEC Reports (including the related notes, where
applicable) (i) have been prepared from, and are in accordance with, the books
and records of Company; (ii) fairly present in all material respects the results
of operations, cash flows, changes in stockholders’ equity and financial
position of Company and its consolidated Subsidiaries, for the respective fiscal
periods or as of the respective dates therein set forth (subject in the case of
unaudited statements to recurring year-end audit adjustments normal in nature
and amount), as applicable; (iii) complied as to form, as of their respective
dates of filing in all material respects with applicable accounting and banking
requirements as applicable, with respect thereto; and (iv) have been prepared in
accordance with GAAP consistently applied during the periods involved, except,
in each case, as indicated in such statements or in the notes thereto and
Regulation S-X promulgated under the Securities Act. The books and records of
Company have been, and are being, maintained in all material respects in
accordance with GAAP and any other applicable legal and accounting requirements.
Company does not have any material liability of any nature whatsoever (whether
absolute, accrued, contingent or otherwise and whether due or to become due),
except for those liabilities that are reflected or reserved against on the
consolidated balance sheet of

9

Company contained in Company SEC Reports for Company’s most recently completed
quarterly or annual fiscal period, as applicable, and for liabilities incurred
in the ordinary course of business consistent with past practice or in
connection with this Agreement and the transactions contemplated hereby.

 

4.4.2     Absence of Default. Since the date of the latest audited financial
statements included in Company’s SEC Reports, no event has occurred which either
of itself or with the lapse of time or the giving of notice or both, would give
any creditor of Company the right to accelerate the maturity of any material
Indebtedness of Company. Company is not in default under any other Lease,
agreement or instrument, or any law, rule, regulation, order, writ, injunction,
decree, determination or award, non-compliance with which could reasonably be
expected to result in a Material Adverse Effect on Company.

 

4.4.3     Solvency. After giving effect to the consummation of the transactions
contemplated by this Agreement, Company has capital sufficient to carry on its
business and transactions and is solvent and able to pay its debts as they
mature. No transfer of property is being made and no Indebtedness is being
incurred in connection with the transactions contemplated by this Agreement with
the intent to hinder, delay or defraud either present or future creditors of
Company or any Subsidiary of Company.

 

4.4.4     Ownership of Property. Company and each of its Subsidiaries has good
and marketable title as to all real property owned by it and good title to all
assets and properties owned by Company and such Subsidiary in the conduct of its
businesses, whether such assets and properties are real or personal, tangible or
intangible, including assets and property reflected in the most recent balance
sheet contained in Company’s SEC Reports or acquired subsequent thereto (except
to the extent that such assets and properties have been disposed of in the
ordinary course of business, since the date of such balance sheet), subject to
no encumbrances, liens, mortgages, security interests or pledges, except (i)
those items which secure liabilities for public or statutory obligations or any
discount with, borrowing from or other obligations to the Federal Home Loan
Bank, inter-bank credit facilities, reverse repurchase agreements or any
transaction by Bank acting in a fiduciary capacity, (ii) statutory liens for
amounts not yet delinquent or which are being contested in good faith and (iii)
such as do not, singly or in the aggregate, materially affect the value of such
property and do not materially interfere with the use made and proposed to be
made of such property by Company or any of its Subsidiaries. Company and each of
its Subsidiaries, as lessee, has the right under valid and existing leases of
real and personal properties that are material to Company or such Subsidiary, as
applicable, in the conduct of its business to occupy or use all such properties
as presently occupied and used by it. Such existing leases and commitments to
lease constitute or will constitute operating leases for both tax and financial
accounting purposes and the lease expense and minimum rental commitments with
respect to such leases and lease commitments are as disclosed in all material
respects in Company’s SEC Reports.

 

4.5        No Material Adverse Change. Since the date of the latest audited
financial statements included in Company’s SEC Reports, there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect on Company or any of its Subsidiaries.

 

4.6        Legal Matters.

 

4.6.1     Compliance with Law. Company and each of its Subsidiaries (i) has
complied with and (ii) is not under investigation with respect to, and, to the
Company’s knowledge, have not been threatened to be charged with or given any
notice of any material violation of any applicable statutes, rules, regulations,
orders and restrictions of any domestic or foreign government, or any
instrumentality or agency thereof, having jurisdiction over the conduct of its
business or the ownership of its properties,

10

except where any such failure to comply or violation would not reasonably be
expected to have a Material Adverse Effect on Company or any of its
Subsidiaries.

 

4.6.2     Regulatory Enforcement Actions. Company, Bank and its other
Subsidiaries are in compliance in all material respects with all laws
administered by and regulations of any Governmental Agency applicable to it or
to them, the failure to comply with which would have a Material Adverse Effect.
None of Company, Bank, Company’s Subsidiaries nor any of their officers or
directors is now operating under any restrictions, agreements, memoranda, or
commitments (other than restrictions of general application) imposed by any
Governmental Agency, nor are, to Company’s knowledge, (a) any such restrictions
threatened or (b) any agreements, memoranda or commitments being sought by any
Governmental Agency.

 

4.6.3     Pending Litigation. There are no actions, suits, proceedings or
written agreements pending, or, to Company’s knowledge, threatened or proposed,
against Company, Bank, or any of its other Subsidiaries at law or in equity or
before or by any federal, state, municipal, or other governmental department,
commission, board, or other administrative agency, domestic or foreign, that,
either separately or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on Company or any of its Subsidiaries or affect issuance
or payment of the Subordinated Notes; and neither Company nor any of its
Subsidiaries is a party to or named as subject to the provisions of any order,
writ, injunction, or decree of, or any written agreement with, any court,
commission, board or agency, domestic or foreign, that either separately or in
the aggregate, will have a Material Adverse Effect on Company or any of its
Subsidiaries.

 

4.6.4     Environmental. No Property is or, to Company’s knowledge, has been a
site for the use, generation, manufacture, storage, treatment, release,
threatened release, discharge, disposal, transportation or presence of any
Hazardous Materials and neither Company nor any of its Subsidiaries has engaged
in such activities. There are no claims or actions pending or, to Company’s
knowledge, threatened against Company or any of its Subsidiaries by any
Governmental Agency or by any other Person relating to any Hazardous Materials
or pursuant to any Hazardous Materials Law.

 

4.6.5     Brokerage Commissions. Except for commissions paid to the Placement
Agents, neither Company nor any Affiliate of Company is obligated to pay any
brokerage commission or finder’s fee to any Person in connection with the
transactions contemplated by this Agreement.

 

4.6.6     Investment Company Act. Neither Company nor any of its Subsidiaries is
an “investment company” or a company “controlled” by an “investment company,”
within the meaning of the Investment Company Act of 1940, as amended.

 

4.7        No Misstatement. No information, exhibit, report, schedule or
document, when viewed together as a whole, furnished by Company to Purchasers in
connection with the negotiation, execution or performance of this Agreement
contains any untrue statement of a material fact, or omits to state a material
fact necessary to make the statements contained therein not misleading in light
of the circumstances under which they were made, not misleading.

 

4.8        Reporting Compliance. Company is subject to, and is in compliance in
all material respects with, the reporting requirements of Section 13 and Section
15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and
the rules and the regulations of the SEC thereunder (collectively, the “Exchange
Act”). Company’s SEC Reports at the time they were or hereafter are filed with
the SEC, complied in all material respects with the requirements of the Exchange
Act and did not and do not include any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.

11

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

 

4.10        Disclosure Controls and Procedures. Company and its Subsidiaries
maintain an effective system of disclosure controls and procedures (as defined
in Rule 13a-15 and Rule 15d-15 of the Exchange Act), that (i) are designed to
ensure that information required to be disclosed by Company in the reports that
it files or submits under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in the SEC’s rules and forms and
that material information relating to Company and its Subsidiaries is made known
to Company’s principal executive officer and principal financial officer by
others within Company and its Subsidiaries to allow timely decisions regarding
disclosure, and (ii) are effective in all material respects to perform the
functions for which they were established. As of the date hereof, Company has no
knowledge that would reasonably cause it to believe that the evaluation to be
conducted of the effectiveness of Company’s disclosure controls and procedures
for the most recently ended fiscal quarter period will result in a finding that
such disclosure controls and procedures are ineffective for such quarter ended.

 

4.11        No Registration. Other than the Purchasers with respect to the
Subordinated Notes, no person has the right to require Company or any of its
Subsidiaries to register any securities for sale under the Securities Act by
reason of acts required to be taken by Company pursuant to the terms of the
Registration Rights Agreement or the issuance and sale of the Subordinated Notes
to be sold by Company hereunder.

 

4.12        Representations and Warranties Generally. The representations and
warranties of Company set forth in this Agreement are true and correct as of the
date hereof and will be true and correct as of the Closing Date and as otherwise
specifically provided herein. Any certificate signed by an officer of Company
and delivered to the Purchasers or to counsel for Purchasers shall be deemed to
be a representation and warranty by Company to the Purchasers as to the matters
set forth therein.

 

5.GENERAL COVENANTS, CONDITIONS AND AGREEMENTS.

 

Company hereby further covenants and agrees with each Purchaser as follows:

 

5.1        Compliance with Transaction Documents. Company shall comply with,
observe and timely perform each and every one of the covenants, agreements and
obligations under the Transaction Documents.

12

5.2        Affiliate Transactions. Company shall not itself, nor shall it cause,
permit or allow any Subsidiary to enter into any transaction, including, the
purchase, sale or exchange of property or the rendering of any service, with any
Affiliate of Company except in the ordinary course of business and pursuant to
the reasonable requirements of Company’s or such Affiliate’s business and upon
terms consistent with applicable laws and regulations and reasonably found by
the appropriate board(s) of directors to be fair and reasonable and no less
favorable to Company or such Affiliate than would be obtained in a comparable
arm’s length transaction with a Person not an Affiliate.

 

5.3        Compliance with Laws.

 

5.3.1     Generally. Company shall comply and cause Bank and each other
Subsidiary to comply in all material respects with all applicable statutes,
rules, regulations, orders and restrictions in respect of the conduct of its
business and the ownership of its properties, except, in each case, where such
noncompliance would not reasonably be expected to have a Material Adverse Effect
on Company.

 

5.3.2     Regulated Activities. Company shall not itself, nor shall it cause,
permit or allow Bank or any other Subsidiary (i) engage in any business or
activity not permitted by all applicable laws and regulations, except where such
business or activity would not reasonably be expected to have a Material Adverse
Effect on Company, Bank and/or such Subsidiary or (ii) make any loan or advance
secured by the capital stock of another bank or depository institution, or
acquire the capital stock, assets or obligations of or any interest in another
bank or depository institution, in each case other than in accordance with
applicable laws and regulations and safe and sound banking practices.

 

5.3.3     Taxes. Company shall and shall cause Bank and any other Subsidiary to
promptly pay and discharge all taxes, assessments and other governmental charges
imposed upon Company, Bank or any other Subsidiary or upon the income, profits,
or property of Company or any Subsidiary and all claims for labor, material or
supplies which, if unpaid, might by law become a lien or charge upon the
property of Company, Bank or any other Subsidiary. Notwithstanding the
foregoing, none of Company, Bank or any other Subsidiary shall be required to
pay any such tax, assessment, charge or claim, so long as the validity thereof
shall be contested in good faith by appropriate proceedings, and appropriate
reserves therefor shall be maintained on the books of Company, Bank and such
other Subsidiary.

 

5.3.4     Corporate Existence. Company shall do or cause to be done all things
reasonably necessary to maintain, preserve and renew its corporate existence and
that of Bank and the other Subsidiaries and its and their rights and franchises,
and comply in all material respects with all related laws applicable to Company,
Bank or the other Subsidiaries; provided, however, that Company may consummate a
merger or consolidation in accordance with Article VII of the Indenture.

 

5.4        Absence of Control. It is the intent of the parties to this Agreement
that in no event shall Purchasers, by reason of any of the Transaction
Documents, be deemed to control, directly or indirectly, Company, and Purchasers
shall not exercise, or be deemed to exercise, directly or indirectly, a
controlling influence over the management or policies of Company.

 

5.5        Secondary Market Transactions. Each Purchaser shall have the right at
any time and from time to time to securitize its Subordinated Notes or any
portion thereof in a single asset securitization or a pooled loan securitization
of rated single or multi-class securities secured by or evidencing ownership
interests in the Subordinated Notes (each such securitization is referred to
herein as a “Secondary Market Transaction”). In connection with any such
Secondary Market Transaction, Company shall, at Company’s expense, cooperate
with Purchasers and otherwise reasonably assist Purchasers in satisfying the
market standards to which Purchasers customarily adhere or which may be

13

reasonably required in the marketplace or by applicable rating agencies in
connection with any such Secondary Market Transaction. Subject to any written
confidentiality obligation, all information regarding Company may be furnished,
without liability except in the case of gross negligence or willful misconduct,
to any Purchaser and to any Person reasonably deemed necessary by Purchaser in
connection with participation in such Secondary Market Transaction. All
documents, financial statements, appraisals and other data relevant to Company
or the Subordinated Notes may be retained by any such Person.

 

5.6        Bloomberg. Within 30 days after Closing, Company will utilize its
commercially reasonable efforts to have the Subordinated Notes identified on
Bloomberg.

 

6.REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASERS.

 

Each Purchaser hereby represents and warrants to Company, and covenants with
Company, severally and not jointly, as follows:

 

6.1        Legal Power and Authority. It has all necessary power and authority
to execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. It is an entity duly organized,
validly existing and in good standing under the laws its jurisdiction of
organization.

 

6.2        Authorization and Execution. The execution, delivery and performance
of this Agreement and the Registration Rights Agreement have been duly
authorized by all necessary action on the part of such Purchaser, and this
Agreement and the Registration Rights Agreement are each a legal, valid and
binding obligation of such Purchaser, enforceable against such Purchaser in
accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors’ rights generally or by general equitable
principles.

 

6.3        No Conflicts. Neither the execution, delivery or performance of the
Transaction Documents nor the consummation of any of the transactions
contemplated thereby will conflict with, violate, constitute a breach of or a
default (whether with or without the giving of notice or lapse of time or both)
under (i) its organizational documents, (ii) any agreement to which it is party,
(iii) any law applicable to it or (iv) any order, writ, judgment, injunction,
decree, determination or award binding upon or affecting it.

 

6.4        Purchase for Investment. It is purchasing the Subordinated Note for
its own account and not with a view to distribution and with no present
intention of reselling, distributing or otherwise disposing of the same. It has
no present or contemplated agreement, undertaking, arrangement, obligation,
indebtedness or commitment providing for, or which is likely to compel, a
disposition of the Subordinated Notes in any manner.

 

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

 

6.6        Financial and Business Sophistication. It has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of the prospective investment in the Subordinated Notes. It
has relied solely upon its own knowledge of, and/or the advice of its own legal,
financial or other advisors with regard to, the legal, financial, tax and other
considerations involved in deciding to invest in the Subordinated Notes.

14

6.7        Ability to Bear Economic Risk of Investment. It recognizes that an
investment in the Subordinated Notes involves substantial risk. It has the
ability to bear the economic risk of the prospective investment in the
Subordinated Notes, including the ability to hold the Subordinated Notes
indefinitely, and further including the ability to bear a complete loss of all
of its investment in Company.

 

6.8        Information. It acknowledges that: (i) it is not being provided with
the disclosures that would be required if the offer and sale of the Subordinated
Notes were registered under the Securities Act, nor is it being provided with
any offering circular or prospectus prepared in connection with the offer and
sale of the Subordinated Notes; (ii) it has conducted its own examination of
Company and the terms of the Subordinated Notes to the extent it deems necessary
to make its decision to invest in the Subordinated Notes; and (iii) it has
availed itself of publicly available financial and other information concerning
Company to the extent it deems necessary to make its decision to purchase the
Subordinated Notes. It has reviewed the information set forth in Company’s SEC
Reports and the exhibits and schedules hereto.

 

6.9        Access to Information. It acknowledges that it and its advisors have
been furnished with all materials relating to the business, finances and
operations of Company that have been requested of it or its advisors and have
been given the opportunity to ask questions of, and to receive answers from,
persons acting on behalf of Company concerning terms and conditions of the
transactions contemplated by this Agreement in order to make an informed and
voluntary decision to enter into this Agreement.

 

6.10      Investment Decision. It has made its own investment decision based
upon its own judgment, due diligence and advice from such advisors as it has
deemed necessary and not upon any view expressed by any other person or entity,
including the Placement Agents. Neither such inquiries nor any other due
diligence investigations conducted by it or its advisors or representatives, if
any, shall modify, amend or affect its right to rely on Company’s
representations and warranties contained herein. It is not relying upon, and has
not relied upon, any advice, statement, representation or warranty made by any
Person by or on behalf of Company, including, without limitation, the Placement
Agents, except for the express statements, representations and warranties of
Company made or contained in this Agreement. Furthermore, it acknowledges that
(i) the Placement Agents have not performed any due diligence review on behalf
of it and (ii) nothing in this Agreement or any other materials presented by or
on behalf of Company to it in connection with the purchase of the Subordinated
Notes constitutes legal, tax or investment advice.

 

6.11      Private Placement; No Registration; Restricted Legends. It understands
and acknowledges that the Subordinated Notes are being sold by Company without
registration under the Securities Act in reliance on the exemption from federal
and state registration set forth in, respectively, Rule 506(b) of Regulation D
under Section 4(a)(2) of the Securities Act and Section 18 of the Securities
Act, or any state securities laws, and accordingly, may be resold, pledged or
otherwise transferred only if exemptions from the Securities Act and applicable
state securities laws are available to it. It further acknowledges and agrees
that all certificates or other instruments representing the Subordinated Notes
will bear the restrictive legend set forth in the form of Subordinated Note,
which is attached as an exhibit to the Indenture. It further acknowledges its
primary responsibilities under the Securities Act and, accordingly, will not
sell or otherwise transfer the Subordinated Notes or any interest therein
without complying with the requirements of the Securities Act and the rules and
regulations promulgated thereunder and the requirements set forth in this
Agreement.

 

6.12      Placement Agents. It will purchase the Subordinated Note(s) directly
from Company and not from either Placement Agent and understands that neither
the Placement Agents nor any other broker or dealer has any obligation to make a
market in the Subordinated Notes.

15

6.13      Tier 2 Capital. If all or any portion of the Subordinated Notes ceases
to be deemed to be Tier 2 Capital, other than due to the limitation imposed on
the capital treatment of subordinated debt during the five (5) years immediately
preceding the Maturity Date of the Subordinated Notes, Company will immediately
notify the Purchasers, and thereafter Company and the Purchasers will work
together in good faith to execute and deliver all agreements as reasonably
necessary in order to restructure the applicable portions of the obligations
evidenced by the Subordinated Notes to qualify as Tier 2 Capital.

 

6.14      Accuracy of Representations. It understands that each of the Placement
Agents and Company will rely upon the truth and accuracy of the foregoing
representations, acknowledgements and agreements in connection with the
transactions contemplated by this Agreement, and agrees that if any of the
representations or acknowledgements made by it are no longer accurate as of the
Closing Date, or if any of the agreements made by it are breached on or prior to
the Closing Date, it shall promptly notify the Lead Placement Agent and Company.

 

6.15      Representations and Warranties Generally. The representations and
warranties of Purchaser set forth in this Agreement are true and correct as of
the date hereof and will be true and correct as of the Closing Date and as
otherwise specifically provided herein. Any certificate signed by a duly
authorized representative of Purchaser and delivered to the Company or to
counsel for Company shall be deemed to be a representation and warranty by
Purchaser to Company as to the matters set forth therein.

 

7.           TERMINATION. Purchasers may terminate this Agreement (i) at any
time prior to the Closing Date by written notice signed by all Purchasers to
Company if Purchasers shall decline to purchase the Subordinated Notes for any
reason permitted by this Agreement or (ii) on the Closing Date if any condition
described in Section 3.2 is not fulfilled or waived in writing by the Purchasers
on or prior to the Closing Date. Any termination pursuant to this Section shall
be without liability on the part of (a) Company to Purchasers or (b) Purchasers
to Company.

 

8.MISCELLANEOUS.

 

8.1        Prohibition on Assignment by Company. Except as described in Article
VII of the Indenture, Company may not assign, transfer or delegate any of its
rights or obligations under this Agreement or the Subordinated Notes without the
prior written consent of Purchasers.

 

8.2        Time of the Essence. Time is of the essence of this Agreement.

 

8.3        Waiver or Amendment. No waiver or amendment of any term, provision,
condition, covenant or agreement herein shall be effective unless in writing and
signed by all of the parties hereto. No failure to exercise or delay in
exercising, by a Purchaser or any holder of the Subordinated Notes, of any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, power or privilege preclude any
other or further exercise thereof, or the exercise of any other right or remedy
provided by law. The rights and remedies provided in this Agreement are
cumulative and not exclusive of any right or remedy provided by law or equity.

 

8.4        Severability. Any provision of this Agreement which is unenforceable
or invalid or contrary to law, or the inclusion of which would adversely affect
the validity, legality or enforcement of this Agreement, shall be of no effect
and, in such case, all the remaining terms and provisions of this Agreement
shall subsist and be fully effective according to the tenor of this Agreement
the same as though any such invalid portion had never been included herein.
Notwithstanding any of the foregoing to the contrary, if any provisions of this
Agreement or the application thereof are held invalid or unenforceable only as
to particular persons or situations, the remainder of this Agreement, and the
application of such provision to persons or situations other than those to which
it shall have been held

16

invalid or unenforceable, shall not be affected thereby, but shall continue
valid and enforceable to the fullest extent permitted by law.

 

8.5        Notices. Any notice which any party hereto may be required or may
desire to give hereunder shall be deemed to have been given if in writing and if
delivered personally, or if mailed, postage prepaid, by United States registered
or certified mail, return receipt requested, or if delivered by a responsible
overnight commercial courier promising next business day delivery, addressed:

 

if to Company:

ConnectOne Bancorp, Inc.

301 Sylvan Ave.

Englewood Cliffs, New Jersey 07632

Attn: Frank Sorrentino III, Chief Executive Officer

Facsimile: (201) 510-6781

Email: fsorrentino@cnob.com

 

with a copy to:

Windels, Marx, Lane & Mittendorf LLP

120 Albany Street Plaza, 6th Floor

New Brunswick, New Jersey 08901

Attn: Robert Schwartz

Facsimile: (732) 846-8877

Email: rschwartz.@windelsmarz.com

 

if to Purchasers: To the addresses indicated on Schedule I.

 

or to such other address or addresses as the party to be given notice may have
furnished in writing to the party seeking or desiring to give notice, as a place
for the giving of notice; provided that no change in address shall be effective
until five (5) Business Days after being given to the other party in the manner
provided for above. Any notice given in accordance with the foregoing shall be
deemed given when delivered personally or, if mailed, three (3) Business Days
after it shall have been deposited in the United States mails as aforesaid or,
if sent by overnight courier, the Business Day following the date of delivery to
such courier (provided next business day delivery was requested).

 

8.6        Successors and Assigns. This Agreement shall inure to the benefit of
the parties and their respective heirs, legal representatives, successors and
assigns; except that, unless a Purchaser consents in writing, no assignment made
by Company in violation of this Agreement or the Indenture shall be effective or
confer any rights on any purported assignee of Company. The term “successors and
assigns” will not include a purchaser of any of the Subordinated Notes from any
Purchaser merely because of such purchase.

 

8.7        No Joint Venture. Nothing contained herein or in any document
executed pursuant hereto and no action or inaction whatsoever on the part of a
Purchaser, shall be deemed to make a Purchaser a partner or joint venturer with
Company.

 

8.8        Documentation. All documents and other matters required by any of the
provisions of this Agreement to be submitted or furnished to a Purchaser shall
be in form and substance satisfactory to such Purchaser.

 

8.9        Entire Agreement. This Agreement and the Subordinated Notes along
with the Exhibits thereto constitute the entire agreement between the parties
hereto with respect to the subject matter hereof and may not be modified or
amended in any manner other than by supplemental written agreement executed by
the parties hereto. No party, in entering into this Agreement, has relied upon
any

17

representation, warranty, covenant, condition or other term that is not set
forth in this Agreement or in the Subordinated Notes.

 

8.10      Choice of Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey without giving effect to its
laws or principles of conflict of laws. Nothing herein shall be deemed to limit
any rights, powers or privileges which a Purchaser may have pursuant to any law
of the United States of America or any rule, regulation or order of any
department or agency thereof and nothing herein shall be deemed to make unlawful
any transaction or conduct by a Purchaser which is lawful pursuant to, or which
is permitted by, any of the foregoing.

 

8.11      No Third Party Beneficiary. This Agreement is made for the sole
benefit of Company and the Purchasers, and no other person shall be deemed to
have any privity of contract hereunder nor any right to rely hereon to any
extent or for any purpose whatsoever, nor shall any other person have any right
of action of any kind hereon or be deemed to be a third party beneficiary
hereunder; provided, that the Placement Agents may rely on the representations
and warranties contained herein to the same extent as if it were a party to this
Agreement.

 

8.12      Legal Tender of United States. All payments hereunder shall be made in
coin or currency which at the time of payment is legal tender in the United
States of America for public and private debts.

 

8.13      Captions; Counterparts. Captions contained in this Agreement in no way
define, limit or extend the scope or intent of their respective provisions. This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which taken together shall
constitute but one and the same instrument. In the event that any signature is
delivered by facsimile transmission, or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile signature page were an original thereof.

 

8.14      Knowledge; Discretion. All references herein to Purchaser’s or
Company’s knowledge shall be deemed to mean the knowledge of such party based on
the actual knowledge of such party’s Chief Executive Officer and Chief Financial
Officer or such other persons holding equivalent offices. Unless specified to
the contrary herein, all references herein to an exercise of discretion or
judgment by a Purchaser, to the making of a determination or designation by a
Purchaser, to the application of a Purchaser’s discretion or opinion, to the
granting or withholding of a Purchaser’s consent or approval, to the
consideration of whether a matter or thing is satisfactory or acceptable to a
Purchaser, or otherwise involving the decision making of a Purchaser, shall be
deemed to mean that such Purchaser shall decide using the reasonable discretion
or judgment of a prudent lender.

 

8.15      Waiver Of Right To Jury Trial. TO THE EXTENT PERMITTED UNDER
APPLICABLE LAW, THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE ANY RIGHT THAT THEY MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING
IN ANY WAY IN CONNECTION WITH ANY OF THE TRANSACTION DOCUMENTS, OR ANY OTHER
STATEMENTS OR ACTIONS OF COMPANY OR PURCHASERS. THE PARTIES ACKNOWLEDGE THAT
THEY HAVE BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF
THIS WAIVER BY INDEPENDENT LEGAL COUNSEL SELECTED OF THEIR OWN FREE WILL. THE
PARTIES FURTHER ACKNOWLEDGE THAT (i) THEY HAVE READ AND UNDERSTAND THE MEANING
AND RAMIFICATIONS OF THIS WAIVER, (ii) THIS WAIVER HAS BEEN REVIEWED BY THE
PARTIES AND THEIR COUNSEL AND IS A MATERIAL INDUCEMENT FOR ENTRY INTO THIS

18

AGREEMENT AND THE REGISTRATION RIGHTS AGREEMENT AND (iii) THIS WAIVER SHALL BE
EFFECTIVE AS TO EACH OF SUCH TRANSACTION DOCUMENTS AS IF FULLY INCORPORATED
THEREIN.

 

8.16      Expenses. Except as otherwise provided in this Agreement, each of the
parties will bear and pay all other costs and expenses incurred by it or on its
behalf in connection with the transactions contemplated pursuant to this
Agreement except that, at the Closing, the Company shall bear, and upon request
by Purchasers, reimburse each Purchaser (or group of Affiliated Purchasers) that
purchases a Note with an initial principal amount of at least $10,000,000 for
all reasonable out-of-pocket fees and expenses of attorneys incurred by each
Purchaser and their Affiliates in connection with the negotiation and
preparation of this Agreement and undertaking of the transactions contemplated
pursuant to this Agreement for a flat fee of $15,000.00.

 

8.17      Survival. Each of the representations and warranties set forth in this
Agreement shall survive the consummation of the transactions contemplated hereby
for a period of one year after the date hereof. Except as otherwise provided
herein, all covenants and agreements contained herein shall survive until, by
their respective terms, they are no longer operative.

 

[Signature Pages Follow]

19

IN WITNESS WHEREOF, Company has caused this Subordinated Note Purchase Agreement
to be executed by its duly authorized representative as of the date first above
written.

 

  COMPANY:         CONNECTONE BANCORP, INC.         By:       Name: Frank S.
Sorrentino III     Title: Chief Executive Officer          

 

[Company Signature Page to Subordinated Note Purchase Agreement]

 

IN WITNESS WHEREOF, the Purchaser has caused this Subordinated Note Purchase
Agreement to be executed by its duly authorized representative as of the date
first above written.

 

  PURCHASER:         [INSERT PURCHASER’S NAME]         By:       Name: [●]    
Title: [●]          

 

[Purchaser Signature Page to Subordinated Note Purchase Agreement]

 

SCHEDULE I

 

Purchaser

Amount of Note ($)

 

                                                   

Aggregate Amount of Subordinated Notes:

 

$50,000,000.00

 

EXHIBIT A

 

FORM OF INDENTURE

 

EXHIBIT B

 

FORM OF REGISTRATION RIGHTS AGREEMENT

 

EXHIBIT C

 

OPINION OF COUNSEL

 

1.        Each of Company and Bank (i) has been organized or formed, as the case
may be, is validly existing and is in good standing under the laws of its
jurisdiction of organization, (ii) has all requisite power and authority to
carry on its business and to own, lease and operate its properties and assets as
described in Company’s SEC Reports and (iii) is duly qualified or licensed to do
business and is in good standing as a foreign corporation, partnership or other
entity as the case may be, authorized to do business in each jurisdiction in
which the nature of such businesses or the ownership or leasing of such
properties requires such qualification[, except where the failure to be so
qualified would not, individually or in the aggregate, have a Material Adverse
Effect].

 

2.        Company has all necessary power and authority to execute, deliver and
perform its obligations under the Transaction Documents to which it is a party
and to consummate the transactions contemplated by the Agreement,

 

3.        The Agreement has been duly and validly authorized, executed and
delivered by Company. The Indenture has been duly and validly authorized by
Company.

 

4.        The Registration Rights Agreement has been duly and validly
authorized, executed and delivered by the Company.

 

5.        The Indenture, when executed and delivered by Company and Trustee,
will constitute a legal valid and binding obligation of Company, enforceable
against Company in accordance with its terms, except that the enforcement
thereof may be subject to (i) bankruptcy, insolvency, reorganization,
receivership, moratorium, fraudulent conveyance, fraudulent transfer or other
similar laws now or hereafter in effect relating to creditors’ rights generally
and (ii) general principles of equity (whether applied by a court of law or
equity) and the discretion of the court before which any proceeding therefor may
be brought.

 

6.        The Subordinated Notes have been duly and validly authorized by
Company and when issued and delivered to and paid for by Purchasers in
accordance with the terms of this Agreement and the Indenture, will have been
duly executed, authenticated, issued and delivered and will constitute legal,
valid and binding obligations of the Company, entitled to the benefit of the
Indenture, and enforceable against Company in accordance with their terms,
except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, receivership, moratorium, fraudulent conveyance,
fraudulent transfer or other similar laws now or hereafter in effect relating to
creditors’ rights generally and (ii) general principles of equity (whether
applied by a court of law or equity) and the discretion of the court before
which any proceeding therefor may be brought.

 

7.        Assuming the accuracy of the representations of each of Purchasers set
forth in the Agreement, the Subordinated Notes to be issued and sold by Company
to Purchasers pursuant to the Agreement will be issued in a transaction exempt
from the registration requirements of the Securities Act.