April 11, 2011
 
Sun Bancorp, Inc.
226 Landis Avenue
Vineland, New Jersey  08360

Ladies and Gentlemen:
 
Reference is hereby made to (i) the Securities Purchase Agreement, dated as of
July 7, 2010 (the “Securities Purchase Agreement”), between Sun Bancorp, Inc., a
New Jersey corporation (the “Company”) and Maycomb Holdings II, LLC, Maycomb
Holdings III, LLC, and Maycomb Holdings IV, LLC (“Siguler”); (ii) the notice
given by the Company to Siguler, dated as of March 3, 2011, notifying Siguler of
its gross-up right under Section 4.7 of the Securities Purchase Agreement (the
“Gross-Up Right”) in connection with a proposed public offering (the “Offering”)
by the Company of 25,000,000 shares (the “Initial Shares”) of its common stock,
par value $1.00 per share (“Common Stock”) for $3.00 per share of Common Stock
(the “Offering Price”), plus an additional 3,750,000 shares of Common Stock to
cover over-allotments (the “Option Securities”); (iii) the notice given by
Siguler, dated as of March 14, 2011, notifying the Company of Siguler’s
intention to exercise the Gross-Up Right with respect to the Common Stock issued
in the Offering; (iv) the completion on March 22, 2011, of the Company’s public
offering of 28,750,000 shares of Common Stock, including the Option Securities,
at which time Siguler acquired 2,458,768 shares of Common Stock in respect of
the Gross-Up Right with respect to the Initial Shares only, at a price of $2.85
per share, representing the Offering Price less the underwriting discount of
$0.15. Certain capitalized terms used herein have the meanings set forth in the
Securities Purchase Agreement.  This letter agreement (this “Letter Agreement”)
confirms the mutual understanding and agreement of the parties hereto regarding
the exercise by Siguler of the Gross-up Right with respect to the Option
Securities.
 
1.           Transaction and Purchase Price. Siguler hereby agrees to purchase
from the Company, and the Company agrees to issue and sell to Siguler, an
aggregate of 798,323 shares of Common Stock (the “Purchased Shares”) at a price
per share equal to $2.85 (the Offering Price, less the underwriting discount of
$0.15 for an aggregate purchase price of  $2,275,220.50  (the “Purchase Price”).
The transactions contemplated by the preceding sentence will be consummated on
April 11, 2011 (the “Closing Date”). Siguler will pay the Purchase Price on the
Closing Date by wire transfer of immediately available funds to the account
previously designated by the Company. The Company will deliver one or more
certificates evidencing the Purchased Shares to Siguler within one business day
following the Closing Date. The Purchased Shares will bear the legend set forth
in Section 4.3(a) of the Securities Purchase Agreement.
 
2.           Representations and Warranties of the Company. The Company
represents and warrants as of the date of this Letter Agreement (except to the
extent made only as of a specified date, in which case as of such date) to
Siguler that:
 
 
(a)
Organization and Authority. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of New Jersey, is

 
 
 
 

--------------------------------------------------------------------------------

 
 
 
 
 
duly qualified to do business and is in good standing in all jurisdictions where
its ownership or leasing of property or the conduct of its business requires it
to be so qualified and failure to be so qualified would have a Material Adverse
Effect on the Company and the Company has corporate power and authority to own
its properties and assets and to carry on its business as it is now being
conducted.

 
 
 
(b)
Authorization.

 
(1) The Company has the corporate power and authority to enter into this Letter
Agreement and to carry out its obligations hereunder. This Letter Agreement has
been duly and validly executed and delivered by the Company and, assuming due
authorization, execution and delivery of this Letter Agreement by Siguler, is a
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganizations, fraudulent transfer or
similar laws relating to or affecting creditors generally or by general
equitable principles (whether applied in equity or at law). No other corporate
proceedings are necessary for the execution and delivery by the Company of this
Letter Agreement, the performance by it of its obligations hereunder or the
consummation by it of the transactions contemplated hereby.
 
(2) Neither the execution, delivery and performance by the Company of this
Letter Agreement, nor the consummation of the transactions contemplated hereby,
will (i) violate, conflict with, or result in a breach of any provision of, or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result in a right of termination or
acceleration of, or result in the creation of, any Lien, upon any of the
properties or assets of the Company or any Company Subsidiary under any of the
material terms, conditions or provisions of (A) its certificate of incorporation
or bylaws (or similar governing documents) or (B) any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument or
obligation to which the Company or any Company Subsidiary is a party or by which
it may be bound, or to which the Company or any Company Subsidiary or any of the
properties or assets of the Company or any Company Subsidiary may be subject, or
(ii) subject to compliance with the statutes and regulations referred to in the
next paragraph, violate any ordinance, permit, concession, grant, franchise,
law, statute, rule or regulation or any judgment, ruling, order, writ,
injunction or decree applicable to the Company or any Company Subsidiary or any
of their respective  properties or assets except in the case of clauses (i)(B)
and (ii) for such violations, conflicts and breaches that are not material to
the Company, individually or in the aggregate.
 
(3) Other than the securities or blue sky laws of the various states, no
material notice to, registration, declaration or filing with, exemption or
review by, or authorization, order, consent or approval of, any Governmental
Entity, or expiration or termination of any statutory waiting period, in each
case with respect to the Company or any Company Subsidiary, is necessary for the
 
 
 
 

--------------------------------------------------------------------------------

 
 
 consummation by the Company of the transactions set forth in this Letter
Agreement.
 

 
(c)  
Status of Securities. The Purchased Shares have been duly authorized by all
necessary corporate action of the Company. When issued and sold against receipt
of the consideration therefor as provided in this Letter Agreement, the
Purchased Shares will be validly issued, fully paid and nonassessable and will
not subject the holders thereof to personal liability and, except as to certain
other investors referred to in Section 3(e) and Section 13 hereof, will not be
subject to preemptive rights of any other stockholder of the Company, nor will
such issuance result in the violation or triggering of any price-based
antidilution adjustments under any agreement to which the Company or any Company
Subsidiary is a party.

 

 
(d)  
Capitalization.  As of April 7, 2011, and immediately prior to the completion of
the transactions hereby, there were 79,158,384 shares of Common Stock
outstanding and no shares of Company Preferred Stock
outstanding.  Simultaneously with the purchase of Common Stock to be made
hereunder, the Company will also issue 3,003,808 shares of Common Stock in the
aggregate to other investors not including Siguler, allocated as set forth on
Appendix A attached hereto, in respect of their contractual gross-up rights with
respect to the Option Securities (the “Additional Share
Issuances”).  Immediately following the completion of the transactions
contemplated hereby and the Additional Share Issuances, (i) there will be
82,960,515 shares of Common Stock and no shares of Company Preferred Stock
outstanding and (ii) no person will have contractual gross-up or other
preemptive rights with respect to the Initial Shares, the Option Securities or
any other securities issued by the Company on or prior to the date hereof, other
than certain other investors referred to in Section 3(e) and the Anchorage
Gross-Up Rights described in Section 13 hereof.

 
3.           Representations and Warranties of Siguler. Siguler hereby
represents and warrants as of the date of this Letter Agreement (except to the
extent made only as of a specified date, in which case as of such date) to the
Company that:
 
 
(a)
Organization and Authority. Siguler is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, is duly
qualified to do business and is in good standing in all jurisdictions where its
ownership or leasing of property or the conduct of its business requires it to
be so qualified and failure to be so qualified would have a Material Adverse
Effect on Siguler and Siguler has power and authority to own its properties and
assets and to carry on its business as it is now being conducted.

 
 
(b)
Authorization.

 
(1) Siguler has the power and authority to enter into this Letter Agreement and
to carry out its obligations hereunder. The execution, delivery and performance
of this Letter Agreement by Siguler and the consummation of the transactions
contemplated hereby have been duly authorized by Siguler and no further approval
or authorization is required. Assuming due authorization, execution and
 
 
 
 

--------------------------------------------------------------------------------

 
 
delivery of this Letter Agreement by the Company, this Letter Agreement is a
valid and binding obligation of Siguler enforceable against it in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganizations, fraudulent transfer or similar laws
affecting creditors generally or by general equitable principles (whether
applied in equity or at law). No other proceedings are necessary for the
execution and delivery by Siguler of this Letter Agreement, the performance by
it of its obligations hereunder or the consummation by it of the transactions
contemplated hereby.
 
(2) Neither the execution, delivery and performance by Siguler of this Letter
Agreement, nor the consummation of the transactions contemplated hereby, nor
compliance by it with any of the provisions hereof, will (i) violate, conflict
with, or result in a breach of any provision of, or constitute a default (or an
event which, with notice or lapse of time or both, would constitute a default)
under, or result in the termination of, or accelerate the performance required
by, or result in a right of termination or acceleration of, or result in the
creation of, any Lien upon any of the properties or assets of Siguler under any
of the material terms, conditions or provisions of (A) its certificate of
formation or limited liability company agreement  or (B) any note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which it is a party or by which it may be bound, or
to which it or any of its properties or assets may be subject, or (ii) subject
to compliance with the statutes and regulations referred to in the next
paragraph, violate any statute, rule or regulation or, to the knowledge of
Siguler, any judgment, ruling, order, writ, injunction or decree applicable to
Siguler or any of its properties or assets except in the case of clauses (i)(B)
and (ii) for such violations, conflicts and breaches as would not reasonably be
expected to materially and adversely affect Siguler’s ability to perform its
obligations under this Letter Agreement.
 
(3) No notice to, registration, declaration or filing with, exemption or review
by, or authorization, order, consent or approval of, any Governmental Entity, or
expiration or termination of any statutory waiting period, in each case, with
respect to Siguler is necessary for the consummation by Siguler of the
transactions set forth in this Letter Agreement.
 
 
(c)
Accredited Investor.  Siguler is an accredited investor within the meaning of
Rule 501(a) of Regulation D (“Regulation D”) under the Securities Act of 1933,
as amended (the “Securities Act”)).  Siguler has not solicited offers for, or
offered or sold, and will not solicit offers for, or offer to sell, the
Purchased Shares by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) of Regulation D or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act.

 
 
(d)
Status of Purchased Shares.  Siguler acknowledges that the Purchased Shares (i)
have not been registered under the Securities Act; (ii) are “restricted
securities” within the meaning of Rule 144 under the Securities Act; (iii) may
not be offered and sold unless they are subsequently registered or qualified
under the Securities

 
 
 
 

--------------------------------------------------------------------------------

 
 
 
 
Act and any other applicable securities law or exemptions from such registration
and qualification are available; and (iv) will bear the legend set forth in
Section 4.3(a) of the Securities Purchase Agreement restricting their resale.

 
 
(e)
Other Gross-Up Investors.  Siguler acknowledges that certain other investors
have similar gross-up rights and, concurrent with its purchase of the Purchased
Shares, such other investors will be purchasing additional shares of Common
Stock as set forth in Appendix A attached hereto.

 
4.           Survival. Each of the representations and warranties set forth in
this Letter Agreement shall survive the closing indefinitely. Except as
otherwise provided herein, all covenants and agreements contained herein shall
survive for the duration of any statutes of limitations applicable thereto or
until, by their respective terms, they are no longer operative.
 
5.           Registrable Securities. The parties hereto agree that, for the
avoidance of doubt, the definition of the term “Registrable Securities” under
the Securities Purchase Agreement shall be deemed to include the Purchased
Shares.
 
6.           Amendment. No amendment or waiver of this Letter Agreement will be
effective with respect to any party unless made in writing and signed by an
officer of a duly authorized representative of such party.
 
7.           Waivers. No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. No waiver of any
party to this Letter Agreement will be effective unless it is in a writing
signed by a duly authorized officer of the waiving party that makes express
reference to the provision or provisions subject to such waiver.
 
8.           Counterparts and Facsimile. For the convenience of the parties
hereto, this Letter Agreement may be executed in any number of separate
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts will together constitute the same agreement. Executed
signature pages to this Letter Agreement may be delivered by facsimile or other
comparable electronic means and as so delivered will be deemed as sufficient as
if actual signature pages had been delivered.
 
9.           GOVERNING LAW. THIS LETTER AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE. THE PARTIES
HERETO IRREVOCABLY AND UNCONDITIONALLY AGREE THAT ANY  SUIT OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS LETTER AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY WILL BE TRIED EXCLUSIVELY IN THE U.S. DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK OR, IF THAT COURT DOES NOT HAVE SUBJECT MATTER
JURISDICTION, IN ANY STATE COURT LOCATED IN THE CITY AND COUNTY OF NEW YORK AND
THE PARTIES AGREE TO SUBMIT TO THE JURISDICTION OF, AND TO VENUE IN, SUCH
COURTS.
 
 
 
 

--------------------------------------------------------------------------------

 
 
10.           WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS LETTER AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
 
11.           Notices. The provisions of Section 6.7 of the Securities Purchase
Agreement are incorporated herein by reference as if set out in full herein.
 
12.           Additional Gross-Up Rights.  The parties hereto acknowledge that
on March 17, 2011 the Company entered into an agreement with an as-yet unnamed
fund managed by Anchorage Capital Group LLC (“Anchorage Capital”) which provides
Anchorage Capital with certain “gross-up rights” (the “Anchorage Gross-Up
Rights”) with respect to certain securities offerings that the Company may
conduct, including the sale of the Option Securities.  The parties hereto
further acknowledge that the transactions contemplated herein do not account for
any rights that Siguler may have if Anchorage Capital exercises the Anchorage
Gross-Up Right with respect to the Option Securities or any other securities and
that if Anchorage Capital does exercise the Anchorage Gross-Up Right with
respect to the Option Securities, Siguler will have the right to exercise the
Gross-Up Right with respect to any shares acquired by Anchorage Capital on
account of the sale of the Option Securities and the transactions contemplated
hereby.
 
13.           Entire Agreement, Etc. (a) This Letter Agreement, together with
Sections 4.6 and 4.7 of the Securities Purchase Agreement, constitutes the
entire agreement, and supersedes all other prior agreements, understandings,
representations and warranties, both written and oral, between the parties, with
respect to the subject matter hereof; (b) the terms and conditions of this
Letter Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors, and with respect to Siguler, its
permitted assigns; and (c) this Letter Agreement will not be assignable by
operation of law or otherwise (any attempted assignment in contravention hereof
being null and void), except that Siguler shall be permitted to assign its
rights or obligations hereunder to (i) any Affiliate entity,  (any such
transferee shall be included in the term “Siguler”)); provided, further, that no
such assignment shall relieve Siguler of any of its obligations under this
Letter Agreement.
 
14.           Severability. If any provision of this Letter Agreement or the
application thereof to any person (including, the officers and directors of
Siguler and the Company) or circumstance is determined by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining provisions
hereof, or the application of such provision to persons or circumstances other
than those as to which it has been held invalid or unenforceable, will remain in
full force and effect and shall in no way be affected, impaired or invalidated
thereby, so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination, the parties shall negotiate in good faith in an
effort to agree upon a suitable and equitable substitute provision to effect the
original intent of the parties.
 
15.           No Third Party Beneficiaries. Nothing contained in this Letter
Agreement, expressed or implied, is intended to confer upon any person other
than the parties hereto, any benefit right or remedies.
 

 
 

--------------------------------------------------------------------------------

 
 
If the foregoing accurately reflects your understanding and agreement, please
acknowledge the same by signing this Letter Agreement where indicated below and
returning to us a copy of this letter.
 

 
Sincerely,
 
MAYCOMB HOLDINGS II, LLC
MAYCOMB HOLDINGS III, LLC, and
MAYCOMB HOLDINGS IV, LLC
 
 
By:
/s/ Kenneth Burns
 
Name: Kenneth Burns
Title: Managing Director

Acknowledged and agreed as of the date first above written.
 
SUN BANCORP, INC.
   
By:
 /s/ Thomas X. Geisel  
Name: Thomas X. Geisel
Title: President and Chief Executive Officer

 
 

--------------------------------------------------------------------------------

 

 
Appendix A

 
Investor
Number of Shares
Being Purchased
WLR SBI AcquisitionCo, LLC
2,002,054
Maycomb Holdings II, LLC
  266,107
Maycomb Holdings III, LLC
   266,108
Maycomb Holdings IV, LLC
   266,108
NFI Interactive Logistics, LLC
   350,877
Bernard A. Brown
   491,228
Sidney R. Brown
     78,948
Jeffrey S.  Brown
     70,175
Anne E. Koons
     10,526

 
 

--------------------------------------------------------------------------------