ex10_1.htm


    
      

    

    EXHIBIT 10.1

    

      
        

      

    

     

    INVESTMENT AGREEMENT

    


    dated
as of March 5, 2009 between

    


    PAB
BANKSHARES, INC.

    


    and

    


    ____________________

     

    
      
        

      

    

    


    
      
        
           


        

        
           


          
            

          

        

        
          
          

        

      

    

    
      
        

      



    TABLE
OF CONTENTS

    


    
      
        
          
            	 
      	 
      	
                    Page

                  
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                    ARTICLE
      I

                  
	
                    PURCHASE;
      CLOSING

                  
	
                    1.1

                  	
                    Purchase

                  	
                    1

                  
	
                    1.2

                  	
                    Series
      A Closing

                  	
                    2

                  
	 
      	 
      	 
      
	
                    ARTICLE
      II

                  
	
                    REPRESENTATIONS
      AND WARRANTIES

                  
	
                    2.1

                  	
                    Disclosure

                  	
                    4

                  
	
                    2.2

                  	
                    Representations
      and Warranties of the Company

                  	
                    5

                  
	
                    2.3

                  	
                    Representations
      and Warranties of Purchaser

                  	
                    10

                  
	 
      	 
      	 
      
	
                    ARTICLE
      III

                  
	
                    COVENANTS

                  
	
                    3.1

                  	
                    Filings;
      Other Actions

                  	
                    12

                  
	
                    3.2

                  	
                    Confidentiality

                  	
                    13

                  
	
                    3.3

                  	
                    Conduct
      of the Business

                  	
                    13

                  
	 
      	 
      	 
      
	
                    ARTICLE
      IV

                  
	
                    ADDITIONAL
      AGREEMENTS

                  
	
                    4.1

                  	
                    Legend

                  	
                    13

                  
	
                    4.2

                  	
                    Reservation
      for Issuance

                  	
                    14

                  
	
                    4.3

                  	
                    Certain
      Transactions

                  	
                    14

                  
	
                    4.4

                  	
                    Exchange
      Listing

                  	
                    14

                  
	
                    4.5

                  	
                    Articles
      of Amendment

                  	
                    14

                  
	
                    4.6

                  	
                    Conversion
      of Series A Preferred Stock

                  	
                    14

                  
	 
      	 
      	 
      
	
                    ARTICLE
      V

                  
	
                    TERMINATION

                  
	
                    5.1

                  	
                    Termination

                  	
                    15

                  
	
                    5.2

                  	
                    Effects
      of Termination

                  	
                    15

                  
	 
      	 
      	 
      
	
                    ARTICLE
      VI

                  
	
                    MISCELLANEOUS

                  
	
                    6.1

                  	
                    Expenses

                  	
                    15

                  
	
                    6.2

                  	
                    Amendment;
      Waiver

                  	
                    15

                  


          

        

      

    

    


    
      
        
           


        

        
           


          
            

          

        

        
          
          

        

      

    

    
      
        

      



    TABLE
OF CONTENTS

    


    
      
        
          
            	 
      	 
      	
                    Page

                  
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                    6.3

                  	
                    Counterparts
      and Facsimile

                  	
                    16

                  
	
                    6.4

                  	
                    Governing
      Law

                  	
                    16

                  
	
                    6.5

                  	
                    Waiver
      of Jury Trial

                  	
                    16

                  
	
                    6.6

                  	
                    Notices

                  	
                    16

                  
	
                    6.7

                  	
                    Entire
      Agreement; Assignment

                  	
                    17

                  
	
                    6.8

                  	
                    Interpretation;
      Other Definitions

                  	
                    17

                  
	
                    6.9

                  	
                    Captions

                  	
                    18

                  
	
                    6.10

                  	
                    Severability

                  	
                    18

                  
	
                    6.11

                  	
                    No
      Third Party Beneficiaries

                  	
                    18

                  
	
                    6.12

                  	
                    Time
      of Essence

                  	
                    18

                  
	
                    6.13

                  	
                    Certain
      Adjustments

                  	
                    18

                  
	
                    6.14

                  	
                    Public
      Announcements

                  	
                    18

                  
	
                    6.15

                  	
                    Specific
      Performance

                  	
                    18

                  


          

        

      

    

    


    


    


    LIST
OF EXHIBITS

     

    
      	
              Exhibit
      A:

            	
              Certificate of Designation for
      Series A Preferred Stock

            


    

    


    
      	
              Exhibit
      B:

            	
              Form of
      Warrant

            


    

    


    
      	
              Exhibit
      C:

            	
              Form of Escrow
      Agreement

            


    

    


    
      
        
           


        

        
           


          
            

          

        

        
          
          

        

      

    

    


    INVESTMENT
AGREEMENT

    


    INVESTMENT AGREEMENT, dated as
of March 5, 2009 (this “Agreement”), between PAB
Bankshares, Inc., a Georgia corporation (the “Company”), and                                                     
, a            
                                                        
 (“Purchaser”).

    


    RECITALS:

    


    A.      
     The Investment. Subject to
the terms and conditions of this Agreement, the Company has authorized the
issuance and sale of up to 30,000 shares of a series of contingent convertible
perpetual non-cumulative preferred stock, no par value, of the Company, having
the terms set forth in Exhibit A (the “Series A Preferred
Stock”).  The Series A Preferred Stock shall be convertible
into shares of the Company’s no par value Common Stock (“Common Stock”) in accordance
with the applicable terms set forth in Exhibit
A.  Upon the conversion of the Series A Preferred Stock, the
Company shall issue to Purchaser warrants (the “Warrants”) to purchase shares
of Common Stock as described in this Agreement and in accordance with the terms
and substantially in the form set forth in Exhibit
B.

    


    B.       
     The Securities. The term
“Securities” refers
collectively to (i) the shares of Series A Preferred Stock which are to be
purchased or issued and acquired under this Agreement, (ii) the shares of Common
Stock into which the Series A Preferred Stock is convertible, (iii) the Warrants
that are issuable upon the conversion of the Series A Preferred Stock and (iv)
the Common Stock for which the Warrants may be exercised in accordance with the
terms thereof and of this Agreement. When purchased, the Series A Preferred
Stock will be evidenced by share certificates incorporating the terms set forth
in the Articles of Amendment creating the Series A Preferred Stock. The Articles
of Amendment creating the Series A Preferred Stock (the “Articles of Amendment”) shall
be made a part of the Company’s Amended and Restated Articles of Incorporation,
as amended (the “Articles of
Incorporation”) by the filing of the Articles of Amendment with the
Secretary of State of Georgia (the “Georgia
Secretary”).

    


    NOW, THEREFORE, in
consideration of the premises, and of the representations, warranties, covenants
and agreements set forth herein, the parties agree as follows:

    


    


    ARTICLE
I

    


    PURCHASE;
CLOSING

    


    1.1       
    Purchase.  On the
terms and subject to the conditions set forth herein, Purchaser will purchase
from the Company, and the Company will issue and sell to Purchaser, the number
of Securities (at the purchase price) shown below:

    ‘

    
      
        
          
            	 
      	 
      	
                    Number
      of Shares to be
    Purchased

                  	 
      	
                    Price
      Per Share (In
Dollars)

                  	 
      	
                    Aggregate
      Purchase Price (In
      Dollars)

                  
	
                    Series
      A Preferred Stock

                  	 
      	
                    __________

                  	 
      	
                    $__________

                  	 
      	
                    $__________

                  


          

        

      

    

    


    
      
        
           


        

        
           


          
            

          

        

        
          
          

        

      

    

     

    1.2           Series
A Closing.

    


    (a)     
      Time and Date of Series A
Closing. Subject to the satisfaction or waiver of the conditions set
forth in this Section 1.2, the closing of the purchase and issuance of the
Series A Preferred Stock (the “Series A Closing”) shall
occur no later than five days following the satisfaction or waiver (by the party
entitled to grant such waiver) of all of the conditions set forth in this
Section 1.2 (other than those conditions that by their nature are to be
satisfied at the Series A Closing, but subject to fulfillment or waiver of those
conditions), at the offices of Troutman Sanders LLP located at 600 Peachtree
Street, N.E., Atlanta, Georgia 30308, or such other date and/or location as
agreed by the parties.  The date of the Series A Closing is referred
to as the “Series A Closing Date”.

    


    (b)     
      Escrow
Agreement.  As of the date of this Agreement, the Purchaser
shall deposit the Aggregate Purchase Price for the Series A Preferred Stock
listed in Section 1.1 (the “Escrow Funds”) with The Park
Avenue Bank, a Georgia state-charted bank that is a member of the Federal
Reserve System and is a wholly owned subsidiary of the Company (the “Bank”), to be held in escrow
pending the satisfaction or waiver of the conditions and obligations set forth
in this Section 1.2, in accordance with the terms of an Escrow Agreement, by and
among the Company, the Bank, the Purchaser and the other purchasers listed
therein, in substantially the form attached hereto as Exhibit C (the “Escrow
Agreement”).

    


    (c)       
    Series
A Closing Conditions.

    


    (1)     
      The obligation of Purchaser, on the one
hand, and the Company, on the other hand, to effect the Series A Closing is
subject to the fulfillment or written waiver by Purchaser and the Company prior
to the Series A Closing of the following conditions:

    


    (A)           no
provision of any applicable law or regulation and no judgment, injunction, order
or decree shall prohibit the Series A Closing or shall prohibit or restrict
Purchaser or its Affiliates from owning, voting, or, subject to the receipt of
approval of the Stockholder Proposal, converting or exercising, any Securities
in accordance with the terms thereof and no lawsuit shall have been commenced by
any court, administrative agency or commission or other governmental authority
or instrumentality, whether federal, state, local or foreign, or any applicable
industry self-regulatory organization (each, a “Governmental Entity”), and no
written notice shall have been issued and not withdrawn by any federal or state
banking regulator of competent jurisdiction, seeking to effect any of the
foregoing;

    


    (B)           the
shares of Common Stock into which the Series A Preferred Stock is convertible
and for which the Warrants may be exercised shall have been authorized for
listing on The NASDAQ Global Select Market or such other market on which the
Common Stock is then listed or quoted, subject to official notice of issuance;
and

    


    (C)           the
Bank’s total risk-based capital ratio (calculated in accordance with applicable
federal banking regulations by the Company’s chief financial officer including
any applicable adjustments described below) equals or exceeds twelve percent
(12.0%).  In calculating the Bank’s risk-based capital ratio under
this clause (C), the Company shall: (i) exclude any funds
deposited pursuant to the Escrow Agreement by Purchaser and the other purchasers
named therein for the purchase of the Series A Preferred Stock (the “Aggregate Escrow Funds”), and
(ii) include
any funds which have been committed to be invested in the Company after the date
hereof but are conditioned upon the release of the Aggregate Escrow Funds,
including any funds for which the Company is approved to receive pursuant to the
U.S. Treasury Department’s Troubled Asset Relief Program Capital Purchase
Program or any successor program thereof (collectively, the “CPP”).

    


    
      
        
           


        

        
          2

          
            

          

        

        
          
          

        

      

    

     

    (2)       
    The obligation of Purchaser to effect the Series A
Closing is also subject to the fulfillment or written waiver by Purchaser prior
to the Series A Closing of each of the following additional
conditions:

    


    (A)           the
Company shall have performed in all material respects all other obligations
required to be performed by it at or prior to the Series A Closing pursuant to
this Agreement; and

    


    (B)           Purchaser
shall have received a certificate signed on behalf of the Company by an
executive officer certifying to the effect that the conditions set forth in
Sections 1.2(c)(1)(C) and 1.2(c)(2)(A) have been satisfied.

    


    (3)      
     The obligation of the Company to effect the Series
A Closing is also subject to the fulfillment or written waiver by the Company
prior to the Series A Closing of each of the following additional
conditions:

    


    (A)           Purchaser
has performed in all material respects all obligations required to be performed
by it at or prior to the Series A Closing, as the case may be, under this
Agreement; and

    


    (B)           the
Company shall have received a certificate signed by Purchaser or on behalf of
Purchaser by an executive officer certifying to the effect that the condition
set forth in Section 1.2(c)(3)(A) has been satisfied.

    


    (d)      
     Delivery. Subject to the
satisfaction or waiver on the Series A Closing Date of the applicable conditions
to the Series A Closing in Section 1.2(c), on the Series A Closing
Date:

    


    (1)       
    the Company will deliver to Purchaser certificates
representing the number of shares of Series A Preferred Stock listed in Section
1.1; and

    


    (2)       
    the Purchaser will authorize the release of the Escrow
Funds to the Company and will deliver all documentation and perform all actions
required by the Escrow Agreement to release such Escrow Funds.

    


    For the
avoidance of doubt, following the occurrence of the Series A Closing, the
obligations of the Company to deliver the Series A Preferred Stock on the Series
A Closing Date and Purchaser to pay for the Series A Preferred Stock on the
Series A Closing Date shall become irrevocable and unconditional save for the
condition that the other party shall have made the required delivery of the
Series A Preferred Stock or payment, as applicable, as stated in Sections
1.2(d)(1) and (2).

    


    
      
        
           


        

        
          3

          
            

          

        

        
          
          

        

      

    

     

    ARTICLE
II

    


    REPRESENTATIONS
AND WARRANTIES

    


    2.1        
   Disclosure.  

    


    (a)       
    On or prior to the date hereof, the Company delivered to
Purchaser and Purchaser delivered to the Company a schedule (a “Disclosure Schedule”) setting
forth, among other things, items the disclosure of which is necessary or
appropriate either in response to an express disclosure requirement contained in
a provision hereof or as an exception to one or more representations or
warranties contained in Section 2.2 with respect to the Company, or in Section
2.3 with respect to Purchaser, or to one or more covenants contained in Article
III.

    


    (b)         
  As used in this Agreement, the term “Material Adverse Effect”
means any circumstance, event, change, development or effect that (1) is
material and adverse to the business, assets, results of operations or financial
condition of the Company and Company Subsidiaries taken as a whole or (2) would
materially impair the ability of the Company to perform its obligations under
this Agreement or to consummate the Series A Closing; provided, however, that in determining
whether a Material Adverse Effect has occurred, there shall be excluded any
effect to the extent resulting from the following: (A) changes, after the date
hereof, in U.S. generally accepted accounting principles (“GAAP”) or regulatory
accounting principles generally applicable to banks, savings associations or
their holding companies, (B) changes, after the date hereof, in applicable laws,
rules and regulations or interpretations thereof by Governmental Entities, (C)
actions or omissions of the Company expressly required by the terms of this
Agreement or taken with the prior written consent of Purchaser, (D) changes in
general economic, monetary or financial conditions, including changes in
prevailing interest rates, credit markets, secondary mortgage market conditions
or housing price appreciation/depreciation trends, (E) changes in the market
price or trading volumes of the Common Stock or the Company’s other securities
(but not the underlying causes of such changes), (F) the failure of the Company
to meet any internal or public projections, forecasts, estimates or guidance
(including guidance as to “earnings drivers”) for any period ending on or after
December 31, 2008 (but not the underlying causes of such failure), (G) changes
in global or national political conditions, including the outbreak or escalation
of war or acts of terrorism and (H) the public disclosure of this Agreement or
the transactions contemplated hereby.

    


    (c)        
   “Previously
Disclosed” with regard to (1) a party, means information set forth on its
Disclosure Schedule, and (2) the Company, means information publicly disclosed
by the Company in (A) its Annual Report on Form 10-K for the fiscal year ended
December 31, 2007, as filed by it with the Securities and Exchange Commission
(“SEC”) on March 17,
2008, (B) its Definitive Proxy Statement on Schedule 14A, as filed by it with
the SEC on April 18, 2008, (C) its Quarterly Reports on Form 10-Q, as filed by
it with the SEC on May 9, 2008, August 11, 2008 and November 10, 2008 or (D) any
Current Report on Form 8-K filed or furnished by it with the SEC since January
1, 2008 and publicly available prior to the date of this Agreement (excluding,
in the case of all of the foregoing documents, any risk factor disclosures
contained in such documents (whether or not included under the heading “Risk
Factors”), any disclosure of risks included in any “forward-looking statements”
disclaimer and other statements that are similarly non-specific or are
predictive or forward-looking in nature).

    


    2.2        
   Representations and Warranties of
the Company.  Except as Previously Disclosed, the Company
represents and warrants to Purchaser, as of the date of this Agreement and as of
the Series A Closing Date, that:

    


    
      
        
           


        

        
          4

          
            

          

        

        
          
          

        

      

    

     

    (a)       
    Organization and
Authority.

    


    (1)       
    The Company is a corporation duly organized and validly
existing under the laws of the State of Georgia, 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 where failure to be so qualified would have,
individually or in the aggregate, a Material Adverse Effect, and has the
corporate power and authority to own its properties and assets and to carry on
its business as it is now being conducted. The Company is duly registered as a
bank holding company under the Bank Holding Company Act of 1956, as amended
(“BHC
Act”).

    


    (2)        
   Each Company Subsidiary is duly organized and validly existing
under the laws of its jurisdiction of 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 where failure to be so qualified would have, individually or in
the aggregate, a Material Adverse Effect, and has the corporate power and
authority and governmental authorizations to own its properties and assets and
to carry on its business as it is being conducted. The Bank is duly organized
and validly existing under the laws of the State of Georgia and its deposit
accounts are insured up to applicable limits by the Federal Deposit Insurance
Corporation, and all premiums and assessments required to be paid in connection
therewith have been paid when due. As used herein, “Subsidiary” means, with
respect to any person, any corporation, partnership, joint venture, limited
liability company or other entity (x) of which such person or a subsidiary of
such person is a general partner or (y) of which a majority of the voting
securities or other voting interests, or a majority of the securities or other
interests of which having by their terms ordinary voting power to elect a
majority of the board of directors or persons performing similar functions with
respect to such entity, is directly or indirectly owned by such person and/or
one or more subsidiaries thereof; and “Company Subsidiary” means any
Subsidiary of the Company, including the Bank.

    


    (b)     
      Capitalization. The
authorized capital stock of the Company consists of 98,500,000 shares of no par
value Common Stock and 1,500,000 shares of preferred stock, no par value, of the
Company (the “Company
Preferred Stock”). As of the date hereof, there are 9,324,407 shares of
Common Stock outstanding, no shares of Company Preferred Stock outstanding, and
699,565 shares of Common Stock are reserved for issuance upon exercise of
outstanding stock options. Except for the foregoing, and except for shares
issued or reserved for issuance pursuant to employee equity awards outstanding
or granted after the date hereof in the ordinary course of business consistent
with past practice and any equity that may be issued under the CPP, the Company
shall not have (i) issued or authorized the issuance of any shares of Common
Stock or Company Preferred Stock, or any securities convertible into or
exchangeable or exercisable for shares of Common Stock or Company Preferred
Stock, (ii) reserved for issuance any shares of Common Stock or Company
Preferred Stock, or any securities convertible into or exchangeable or
exercisable for shares of Common Stock or Company Preferred Stock, or (iii)
repurchased or redeemed, or authorized the repurchase or redemption of, any
shares of Common Stock or Company Preferred Stock, or any securities convertible
into or exchangeable or exercisable for shares of Common Stock or Company
Preferred Stock. All of the issued and outstanding shares of Common Stock have
been duly authorized and validly issued and are fully paid, nonassessable and
free of preemptive rights, with no personal liability attaching to the ownership
thereof.  Notwithstanding any of the foregoing, the Company shall have
the right to issue any shares of Common Stock, Company Preferred Stock, debt or
any other type of security, as long as such issuance is pursuant to a public
offering.

    


    
      
        
           


        

        
          5

          
            

          

        

        
          
          

        

      

    

     

    (c)     
      Company’s Subsidiaries. The
Company owns, directly or indirectly, all of the issued and outstanding shares
of capital stock of or all other equity interests in each of the Company
Subsidiaries, free and clear of any liens, charges, adverse rights or claims,
pledges, covenant, title defect, security interests and other encumbrances of
any kind (“Liens”), and
all of such shares or equity interests are duly authorized and validly issued
and are fully paid, nonassessable and free of preemptive rights, with no
personal liability attaching to the ownership thereof. No Company Subsidiary has
or is bound by any outstanding subscriptions, options, warrants, calls,
commitments or agreements of any character calling for the purchase or
redemption or issuance of any shares of capital stock or any other equity
security of such Company Subsidiary or any securities representing the right to
purchase or otherwise receive any shares of capital stock or any other equity
security of such Company Subsidiary.

    


    (d)    
       Authorization.

    


    (1)      
     The Company has the corporate power and authority
to enter into this Agreement and to carry out its obligations hereunder. The
execution, delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby have been duly and
unanimously authorized by the Board of Directors. This Agreement has been duly
and validly executed and delivered by the Company and, assuming due
authorization, execution and delivery by Purchaser, is a valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms (except as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and similar laws of
general applicability relating to or affecting creditors’ rights or by general
equity principles). No other corporate proceedings or stockholder actions are
necessary for the execution and delivery by the Company of this Agreement, the
performance by it of its obligations hereunder or the consummation by it of the
transactions contemplated hereby, subject, in the case of the authorization and
issuance of the shares of Common Stock to be issued on conversion or exercise of
the Series A Preferred Stock or the Warrants to be purchased or acquired under
this Agreement, to receipt of the approval by the Company’s stockholders of the
Stockholder Proposal. The only vote of the stockholders of the Company required
to approve the conversion of the Series A Preferred Stock into, and exercise of
the Warrants for, Common Stock for purposes of Rule 4350(i) of the NASDAQ
Marketplace Rules, is a majority of the total votes cast on such
proposal.

    


    (2)       
    Neither the execution and delivery by the Company of
this Agreement, nor the consummation of the transactions contemplated hereby,
nor compliance by the Company with any of the provisions hereof (including,
without limitation, the conversion or exercise provisions of the Series A
Preferred Stock or the Warrants), will (A) 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 result in the loss of any benefit or creation of any
right on the part of any third party under, 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 material properties or assets of the
Company or any Company Subsidiary under any of the terms, conditions or
provisions of (i) its Articles of Incorporation or by-laws (or similar governing
documents) or the articles of organization, charter, by-laws
or other governing instrument of any Company Subsidiary, subject in the case of
the authorization and issuance of the shares of Common Stock to be issued on
conversion or exercise of the Series A Preferred Stock or the Warrants to be
purchased under this Agreement, to receipt of the approval by the Company’s
stockholders of the Stockholder Proposal, or (ii) any material 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 (B) subject to compliance with the statutes and
regulations referred to in Section 2.2(e), violate any law, statute, ordinance,
rule, regulation, permit, concession, grant, franchise 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 (A)(ii) and (B), for such violations, conflicts and breaches as would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

    


    
      
        
           


        

        
          6

          
            

          

        

        
          
          

        

      

    

     

    (e)       
    Governmental Consents. Other
than the Securities Act and 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, is necessary for the consummation by the Company of the transactions
contemplated by this Agreement.

    


    (f)        
    Financial Statements. Each of
the consolidated balance sheets of the Company and the Company Subsidiaries and
the related consolidated statements of income, stockholders’ equity and cash
flows, together with the notes thereto (collectively, the “Company Financial
Statements”), included in any Company Report filed with the SEC, (1) have
been prepared from, and are in accordance with, the books and records of the
Company and the Company Subsidiaries, (2) complied as to form, as of their
respective date of filing with the SEC, in all material respects with applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto, (3) have been prepared in accordance with GAAP applied on
a consistent basis during the periods involved and (4) present fairly in all
material respects the consolidated financial position of the Company and the
Company Subsidiaries as of the dates set forth therein and the consolidated
results of operations, changes in stockholders’ equity and cash flows of the
Company and the Company Subsidiaries for the periods stated therein, subject, in
the case of any unaudited financial statements, to normal recurring year-end
audit adjustments.

    


    (g)        
   Reports.  Since
December 31, 2007, the Company and each Company Subsidiary has timely filed all
material reports, registrations, documents, filings, statements and submissions,
together with any amendments thereto, that it was required to file with any
Governmental Entity (the foregoing, collectively, the “Company Reports”) and has
paid all material fees and assessments due and payable in connection therewith.
As of their respective dates of filing, the Company Reports complied in all
material respects with all statutes and applicable rules and regulations of the
applicable Governmental Entities.  In the case of each such Company
Report filed with or furnished to the SEC, such Company Report did not, as of
its date or if amended prior to the date of this Agreement, as of the date of
such amendment, contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in order to make the
statements made in it, in light of the circumstances under which they were made,
not misleading and complied as to form in all material respects with the
applicable requirements of the Securities Act of 1933, as amended (the “Securities Act”), and the
Securities Exchange Act of 1934, as amended (the “Exchange Act”).

    


    (h)      
     Absence of Certain Changes.
Since September 30, 2008 until the date hereof, (1) the Company and the Company
Subsidiaries have conducted their respective businesses in all material respects
in the ordinary course, consistent with prior practice, (2) the Company has not
made or declared any distribution in cash or in kind to its stockholders or
issued or repurchased any shares of its capital stock or other equity interests
and (3) no event or events have occurred that, individually or in the aggregate,
has had or would reasonably be expected to have a Material Adverse
Effect.

    


    
      
        
           


        

        
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    (i)         
   No
Undisclosed Liabilities. Neither the Company nor any of the Company
Subsidiaries has any liabilities or obligations of any nature (absolute,
accrued, contingent or otherwise) which are not properly reflected or reserved
against in the Company Financial Statements filed prior to the date hereof to
the extent required to be so reflected or reserved against in accordance with
GAAP, except for (1) liabilities that have arisen since September 30, 2008 in
the ordinary and usual course of business and consistent with past practice, (2)
contractual liabilities under (other than liabilities arising from any breach or
violation of) agreements Previously Disclosed or not required by this Agreement
to be so disclosed and (3) liabilities that have not had and would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

    


    (j)        
    Offering of Securities.
Neither the Company nor any person acting on its behalf has taken any action
(including any offering of any securities of the Company under circumstances
which would require the integration of such offering with the offering of any of
the Securities to be issued pursuant to this Agreement under the Securities Act
and the rules and regulations of the SEC promulgated thereunder) which might
subject the offering, issuance or sale of any of the Securities to Purchaser
pursuant to this Agreement to the registration requirements of the Securities
Act.

    


    (k)      
     Status of Securities. The
shares of Series A Preferred Stock (upon filing of the Articles of Amendment
with the Georgia Secretary) and the Warrants to be issued upon conversion of the
Series A Preferred Stock have been duly authorized by all necessary corporate
action. When issued and sold against receipt of the consideration therefor as
provided in this Agreement, such shares of Series A Preferred Stock will be
validly issued, fully paid and nonassessable, will not subject the holders
thereof to personal liability and will not be subject to preemptive rights of
any other stockholder of the Company. The Warrants, when executed and delivered
by the Company pursuant to the terms of this Agreement, will constitute valid
and legally binding agreements of the Company enforceable in accordance with
their terms (except as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and similar laws of
general applicability relating to or affecting creditors’ rights or by general
equity principles). The shares of Common Stock issuable upon the conversion of
the Series A Preferred Stock and exercise of the Warrants will, upon filing of
the Articles of Amendment with the Georgia Secretary and, in the case of Series
A Preferred Stock and the Warrants, upon receipt of the approval by the
Company’s stockholders of the Stockholder Proposal, have been duly authorized by
all necessary corporate action and when so issued upon such conversion or
exercise will be validly issued, fully paid and nonassessable, will not subject
the holders thereof to personal liability and will not be subject to preemptive
rights of any other stockholder of the Company.

    


    (l)        
    Litigation and Other
Proceedings. There is no pending or, to the knowledge of the Company,
threatened, claim, action, suit, investigation or proceeding, against the
Company or any Company Subsidiary or to which any of their assets are subject,
nor is the Company or any Company Subsidiary subject to any order, judgment or
decree, in each case except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Except as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, there is no unresolved violation, criticism or exception by any
Governmental Entity with respect to any report or relating to any examinations
or inspections of the Company or any Company Subsidiaries.

    


    
      
        
           


        

        
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    (m)           Compliance with Laws. The
Company and each Company Subsidiary have all material permits, licenses,
franchises, authorizations, orders and approvals of, and have made all filings,
applications and registrations with, all Governmental Entities that are required
in order to permit them to own or lease their properties and assets and to carry
on their business as presently conducted and that are material to the business
of the Company or such Company Subsidiary. The Company and each Company
Subsidiary has complied in all material respects and is not in default or
violation in any respect of, and none of them is, to the knowledge of the
Company, under investigation with respect to or, to the knowledge of the
Company, has been threatened to be charged with or given notice of any material
violation of, any applicable material domestic (federal, state or local) or
foreign law, statute, ordinance, license, rule, regulation, policy or guideline,
order, demand, writ, injunction, decree or judgment of any Governmental Entity,
other than such noncompliance, defaults or violations that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Except for statutory or regulatory restrictions of general
application, no Governmental Entity has placed any material restriction on the
business or properties of the Company or any Company Subsidiary.

    


    (n)        
   Agreements
with Regulatory Agencies; Compliance with Certain Banking Regulations.
Neither the Company nor any Company Subsidiary is subject to any
cease-and-desist or other similar order or enforcement action issued by, or is a
party to any written agreement, consent agreement or memorandum of understanding
with, or is a party to any commitment letter or similar undertaking to, or is
subject to any capital directive by, or since December 31, 2007, has adopted any
board resolutions at the request of, any Governmental Entity that currently
restricts in any material respect the conduct of its business or that in any
material manner relates to its capital adequacy, its liquidity and funding
policies and practices, its ability to pay dividends, its credit, risk
management or compliance policies, its internal controls, its management or its
operations or business (each item in this sentence, a “Regulatory Agreement”), nor
has the Company or any Company Subsidiary been advised since December 31, 2007
by any Governmental Entity that it is considering issuing, initiating, ordering,
or requesting any such Regulatory Agreement. Each of the Company and each
Company Subsidiary is in compliance in all material respects with each
Regulatory Agreement to which it is party or subject, and neither the Company
nor any Company Subsidiary has received any notice from any Governmental Entity
indicating that either the Company or any Company Subsidiary is not in
compliance in all material respects with any such Regulatory
Agreement.

    


    (o)       
    Brokers and Finders. Except
for Sandler O’Neill & Partners, L.P., neither the Company nor any Company
Subsidiary nor any of their respective officers or directors, or to the
Company’s knowledge, other employees or agents, has employed any broker or
finder or incurred any liability for any financial advisory fees, brokerage
fees, commissions or finder’s fees, and no broker or finder has acted directly
or indirectly for the Company or any Company Subsidiary, in connection with this
Agreement or the transactions contemplated hereby.

    


    2.3        
   Representations and Warranties of
Purchaser.  Except as Previously Disclosed, Purchaser hereby
represents and warrants to the Company, as of the date of this Agreement and as
of the Series A Closing Date that:

    


    (a)      
     Organization and Authority.
If Purchaser is a partnership, corporation, limited liability company or other
entity, then such Purchaser 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 where failure to be so qualified would be reasonably
expected to materially and adversely affect Purchaser’s ability to perform its
obligations under this Agreement or consummate the transactions contemplated
hereby on a timely basis, and Purchaser has the corporate or other power and
authority and governmental authorizations to own its properties and assets and
to carry on its business as it is now being conducted.

    


    
      
        
           


        

        
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    (b)       
    Authorization.

    


    (1)        
   If Purchaser is a partnership, corporation, limited liability
company or other entity, then (i) such Purchaser has the corporate or other
power and authority to enter into this Agreement and to carry out its
obligations hereunder; and (ii) the execution, delivery and performance of this
Agreement by Purchaser and the consummation of the transactions contemplated
hereby have been duly authorized by Purchaser’s board of directors, general
partner or managing members, as the case may be, and no further approval or
authorization by any of its partners or other equity owners, as the case may be,
is required. This Agreement has been duly and validly executed and delivered by
Purchaser and assuming due authorization, execution and delivery by the Company,
is a valid and binding obligation of Purchaser enforceable against Purchaser in
accordance with its terms (except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar laws of general applicability relating to or affecting creditors’ rights
or by general equity principles).

    


    (2)       
    Neither the execution, delivery and performance by
Purchaser of this Agreement, nor the consummation of the transactions
contemplated hereby, nor compliance by Purchaser with any of the provisions
hereof, will (A) 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 Purchaser under any of the terms, conditions or
provisions of (i) its articles of incorporation, articles of organization,
bylaws, operating agreement, partnership agreement or similar governing
documents, if applicable or (ii) any note, bond, mortgage, indenture, deed of
trust, license, lease, agreement or other instrument or obligation to which
Purchaser is a party or by which it may be bound, or to which Purchaser or any
of the properties or assets of Purchaser may be subject, or (B) subject to
compliance with the statutes and regulations referred to in the next paragraph,
violate any law, statute, ordinance, rule or regulation, permit, concession,
grant, franchise or any judgment, ruling, order, writ, injunction or decree
applicable to Purchaser or any of its properties or assets, except, in the case
of clauses (A)(ii) and (B), for such violations, conflicts and breaches as would
not reasonably be expected to materially and adversely affect Purchaser’s
ability to perform its respective obligations under this Agreement or consummate
the transactions contemplated hereby on a timely basis.

    


    (c)      
     Governmental Consents. Other
than the Securities Act and the securities or blue sky laws of the various
states, no notice to, registration, declaration or filing with, exemption or
review by, or authorization, order, consent or approval of, any Governmental
Entity, nor expiration or termination of any statutory waiting period, is
necessary for the consummation by Purchaser of the transactions contemplated by
this Agreement.

    


    (d)      
     Purchase for Investment.
Purchaser acknowledges that the Securities have not been registered under the
Securities Act or under any state securities laws. Purchaser (1) is acquiring
the Securities pursuant to an exemption from registration under the Securities
Act solely for investment with no present intention to distribute any of the
Securities to any person, (2) will not sell or otherwise dispose of any of the
Securities, except in compliance with the registration requirements or exemption
provisions of the Securities Act and any other applicable securities laws, (3)
has such knowledge and experience in financial and business matters and in
investments of this type that it is capable of evaluating the merits and risks
of its investment in the Securities and of making an informed investment
decision, and (4) is an “accredited investor” (as that term is defined in Rule
501 of the Securities Act).

    


    
      
        
           


        

        
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    (e)       
    Financial
Capability.  The Purchaser has the available funds necessary to
consummate the Series A Closing on the terms and conditions contemplated by this
Agreement.

    


    (f)         
   Disclosure
of Information. The Purchaser has received or has had full access to all
the information it considers necessary or appropriate to make an informed
investment decision with respect to the Securities to be purchased under this
Agreement. The Purchaser has had an opportunity to ask questions and receive
answers from the Company regarding the terms and conditions of the offering of
the Securities and to obtain additional information (to the extent the Company
possessed such information or could acquire it without unreasonable effort or
expense) necessary to verify any information furnished to the Purchaser or to
which Purchaser had access. The Purchaser understands and acknowledges that any
information issued by the Company, (i) was intended to describe the aspects of
the Company’s business and prospects which the Company believes to be material,
but were not necessarily an exhaustive description, and (ii) may have contained
forward-looking statements involving known and unknown risks and uncertainties
which may cause the Company’s actual results in future periods or plans for
future periods to differ materially from what was anticipated and that no
representations or warranties were or are being made with respect to any such
forward-looking statements, provided that the Company believes such statements
were reasonable when made and made such statements in good faith.

    


    (g)       
    Restricted Securities. The
Purchaser understands that the Series A Preferred Stock  and the
Warrants are characterized as “restricted securities” under the Securities Act
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under the Securities Act and applicable
regulations thereunder such securities may be resold without registration under
the Securities Act only in certain limited
circumstances.   Purchaser must bear the economic risk of this
investment indefinitely unless the Series A Preferred Stock and Warrants are
registered pursuant to the Securities Act, or an exemption from registration is
available. Purchaser understands that the Company has no present intention of
registering the Series A Preferred Stock, the Warrants or any shares of its
Common Stock. Purchaser also understands that there is no assurance that any
exemption from registration under Securities Act will be available and that,
even if available, such exemption may not allow Purchaser to transfer all or any
portion of the Series A Preferred Stock or the Warrants under the circumstances,
in the amounts or at the times Purchaser might propose.  In this
connection, Purchaser represents that Purchaser is aware of the provisions of
Rule 144 of the SEC, as presently in effect, and understands the resale
limitations imposed thereby and by the Securities Act.

    


    (h)        
   Brokers and
Finders. Neither Purchaser nor its Affiliates, any of their respective
officers, directors, employees or agents has employed any broker or finder or
incurred any liability for any financial advisory fees, brokerage fees,
commissions or finder’s fees, and no broker or finder has acted directly or
indirectly for Purchaser, in connection with this Agreement or the transactions
contemplated hereby.

    


    
      
        
           


        

        
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    ARTICLE
III

    


    COVENANTS

    
 

    3.1        
   Filings;
Other Actions.  

    


    (a)    
       Purchaser and the Company will
cooperate and consult with the other and use reasonable best efforts to prepare
and file all necessary documentation, to effect all necessary applications,
notices, petitions, filings and other documents, and to obtain all necessary
permits, consents, orders, approvals and authorizations of, or any exemption by,
all third parties and Governmental Entities, and the expiration or termination
of any applicable waiting period, necessary or advisable to consummate the
transactions contemplated by this Agreement, and to perform the covenants
contemplated by this Agreement. Each party shall execute and deliver both before
and after the Series A Closing such further certificates, agreements and other
documents and take such other actions as the other parties may reasonably
request to consummate or implement such transactions or to evidence such events
or matters. In particular, Purchaser will use its reasonable best efforts to
promptly obtain or submit, and the Company will cooperate as may reasonably be
requested by Purchaser to help Purchaser promptly obtain or submit, as the case
may be, as promptly as practicable, all notices to and, to the extent required
by applicable law or regulation, consents, approvals or exemptions from bank
regulatory authorities, for the transactions contemplated by this
Agreement.

    


    (b)        
   Unless this Agreement has been terminated pursuant to Section
5.1, at the Company’s 2009 annual meeting of stockholders which is presently
scheduled to occur in June of 2009, the Company shall propose that the
stockholders of the Company vote on the proposal (the “Stockholder Proposal”) to
approve the conversion of the Series A Preferred Stock into, and exercise of the
Warrants for, Common Stock, for purposes of Rule 4350(i) of the NASDAQ
Marketplace Rules. The Board of Directors shall recommend to the Company’s
stockholders that such stockholders vote in favor of the Stockholder Proposal.
In connection with such meeting, the Company shall prepare (and Purchaser will
reasonably cooperate with the Company to prepare) and file with the SEC a
preliminary proxy statement, shall use its reasonable best efforts to respond to
any comments of the SEC or its staff and to cause a definitive proxy statement
related to such stockholders’ meeting to be mailed to the Company’s stockholders
and shall use its reasonable best efforts to solicit proxies for such
stockholder approval. In the event that the approval of the Stockholder Proposal
is not obtained at such annual stockholders’ meeting, the Company shall include
a proposal to approve (and the Board of Directors shall recommend approval of)
each such proposal at a meeting of its stockholders no less than once in each
subsequent six-month period beginning on the date of such annual stockholders’
meeting until all such approvals are obtained or made.

    


    (c)      
     Purchaser agrees to furnish the Company, and the
Company shall upon request,  furnish to Purchaser, all information
concerning itself, its Affiliates, directors, officers, partners and
stockholders and such other matters as may be reasonably necessary or advisable
in connection with the proxy statement in connection with any such stockholders
meeting and any other statement, filing, notice or application made by or on
behalf of such other party or any of its Subsidiaries to any Governmental Entity
in connection with the Series A Closing and the other transactions contemplated
by this Agreement.

    


    3.2       
    Confidentiality. Each party
to this Agreement will hold, and will cause its respective Affiliates and their
directors, officers, employees, agents, consultants and advisors to hold, in
strict confidence, unless disclosure to a regulatory authority is necessary or
appropriate in connection with any necessary regulatory approval or unless
disclosure is required by judicial or administrative process or, in the written
opinion of its counsel, by other requirement of law or the applicable
requirements of any regulatory agency or relevant stock exchange, all non-public
records, books, contracts, instruments, computer data and other data and
information (collectively, “Information”) concerning the
other party hereto furnished to it by such other party or its representatives
pursuant to this Agreement (except to the extent that such information can be
shown to have been (1) previously known by such party on a non-confidential
basis, (2) in the public domain through no fault of such party or (3) later
lawfully acquired from other sources by the party to which it was furnished),
and neither party hereto shall release or disclose such Information to any other
person, except its auditors, attorneys, financial advisors, other consultants
and advisors.

    


    
      
        
           


        

        
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    3.3       
    Conduct of the
Business.  Prior to the earlier of the Series A Closing Date
and the termination of this Agreement pursuant to Section 5.1 (the “Pre-Closing Period”), the
Company shall, and shall cause each Company Subsidiary to, use commercially
reasonable efforts to carry on its business in the ordinary course of business
and use reasonable best efforts to maintain and preserve its and such Company
Subsidiary’s business (including its organization, assets, properties, goodwill
and insurance coverage) and preserve its business relationships with customers,
strategic partners, suppliers, distributors and others having business dealings
with it; provided,
however, that nothing
in this sentence shall limit or require any actions that the Board of Directors
may, in good faith, determine to be inconsistent with their duties or the
Company’s obligations under applicable law.

    


    


    ARTICLE
IV

    


    ADDITIONAL
AGREEMENTS

    


    4.1        
   Legend.  

    


    (a)    
       Purchaser agrees that all certificates
or other instruments representing the Securities subject to this Agreement will
bear a legend substantially to the following effect:

    


    THE
SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION
STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR
SUCH LAWS.

    


    (b)       
    Upon request of Purchaser, upon receipt by the Company
of an opinion of counsel reasonably satisfactory to the Company to the effect
that such legend is no longer required under the Securities Act and applicable
state laws, the Company shall promptly cause of the legend to be removed from
any certificate for any Securities to be Transferred in accordance with the
terms of this Agreement. Purchaser acknowledges that the Securities have not
been registered under the Securities Act or under any state securities laws and
agrees that it will not sell or otherwise dispose of any of the Securities,
except in compliance with the registration requirements or exemption provisions
of the Securities Act and any other applicable securities laws.

    


    4.2      
     Reservation for
Issuance.  The Company will reserve that number of shares of
Common Stock and Series A Preferred Stock sufficient for issuance, including
upon exercise or conversion, of Securities owned at any time by Purchaser,
without regard to any limitation on such conversion or exercise.

    


    
      
        
           


        

        
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    4.3      
     Certain
Transactions.  The Company will not merge or consolidate into,
or sell, transfer or lease all or substantially all of its property or assets
to, any other party unless the successor, transferee or lessee party, as the
case may be (if not the Company), assumes the due and punctual performance and
observance of each and every covenant and condition of this Agreement to be
performed and observed by the Company.

    


    4.4      
     Exchange
Listing.  The Company shall use its reasonable best efforts to
cause the shares of Common Stock reserved for issuance pursuant to the
conversion of the Series A Preferred Stock and exercise of the Warrants to be
approved for listing on The NASDAQ Global Select Market, subject to official
notice of issuance (and, in the case of shares of Common Stock issuable upon
conversion of Series A Preferred Stock and exercise of Warrants, upon receipt of
the approval by the Company’s stockholders of the Stockholder Proposal), as
promptly as practicable, and in any event before the Series A
Closing.

    


    4.5     
      Articles of
Amendment.  In connection with the Series A Closing, the
Company shall file the Articles of Amendment in the State of Georgia, and the
Articles of Amendment shall continue to be in full force and effect as of the
Series A Closing Date.

    


    4.6      
     Conversion of Series A Preferred
Stock.

    


    (a)      
     Warrants. Upon the conversion
of the Series A Preferred Stock into Common Stock, the Company shall issue to
Purchaser Warrants to purchase ___________ shares of Common Stock at an exercise
price of $3.75 per share.  The Warrants shall be substantially in the
form set forth in Exhibit
B.

    


    (b)      
     Beneficial
Ownership.  Notwithstanding anything to the contrary contained
in this Agreement, the Purchaser will not be entitled to receive shares of
Common Stock upon conversion of the Series A Preferred Stock or exercise of the
Warrants to the extent (but only to the extent) that such receipt would cause
such Purchaser to become, directly or indirectly, a “beneficial owner” (within
the meaning of Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder) of more than 9.9% of the shares of Common Stock
outstanding at such time. Any purported delivery of shares of Common Stock upon
conversion of the Series A Preferred Stock or exercise of the Warrants shall be
void and have no effect to the extent (but only to the extent) that such
delivery would result in Purchaser becoming the beneficial owner of more than
9.9% of the shares of Common Stock outstanding at such time; provided, however, that if
prior to such conversion or exercise such Purchaser was, directly or indirectly,
a beneficial owner of more than 9.9% of the shares of Common Stock outstanding
at such time, such Purchaser will be entitled to receive shares of Common Stock
upon the conversion of the Series A Preferred Stock or exercise of the
Warrants.

    


    


    ARTICLE
V

    


    TERMINATION

    


    5.1       
    Termination. This Agreement
may be terminated prior to the Series A Closing:  

    


    (a)       
    by mutual written agreement of the Company and
Purchaser;

    


    (b)      
     by the Company or Purchaser, upon written notice
to the other parties, in the event that the Series A Closing does not occur on
or before June 30, 2009; provided, however, that the right to
terminate this Agreement pursuant to this Section 5.1(b) shall not be available
to any party whose failure to fulfill any obligation under this Agreement shall
have been the cause of, or shall have resulted in, the failure of the Series A
Closing to occur on or prior to such date; or

    


    
      
        
           


        

        
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    (c)      
     by the Company or Purchaser, upon written notice
to the other party, in the event that any Governmental Entity shall have issued
any order, decree or injunction or taken any other action restraining, enjoining
or prohibiting any of the transactions contemplated by this Agreement, and such
order, decree, injunction or other action shall have become final and
nonappealable.

    


    5.2       
    Effects of
Termination.

    


    (a)     
      In the event of any termination of this
Agreement as provided in Section 5.1 (except under Section 5.1(b)), no party
will have any further rights or obligations under this Agreement (other than
Section 3.2(b) and Article VI, which shall remain in full force and effect)
provided that nothing
herein shall relieve any party from liability for any breach of this
Agreement.

    


    (b)      
     In the event of a termination of this Agreement
pursuant to Section 5.1(b), (i) the Company and the Purchaser shall negotiate in
good faith a purchase agreement (the “Stand-By Purchase
Agreement”), in form satisfactory to the Company and Purchaser, for the
purchase of Common Stock with an aggregate value equal to the amount of the
Series A Preferred Stock subscribed for hereunder, such stock to be issued in a
public or private offering by the Company to take place no later than 120 days
after the termination of this Agreement, and (ii) the Aggregate Escrow Funds
shall remain in escrow with the Bank for the duration of such 120-day period or
unless earlier released pursuant to the terms of the Escrow
Agreement.

    


    


    ARTICLE
VI

    


    MISCELLANEOUS

    


    6.1      
     Expenses.  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.

    


    6.2      
     Amendment;
Waiver.  No amendment or waiver of any provision of this
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. 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. The conditions to each party’s
obligation to consummate the Series A Closing are for the sole benefit of such
party and may be waived by such party in whole or in part to the extent
permitted by applicable law. No waiver of any party to this 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. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by
law.

    


    6.3      
     Counterparts and
Facsimile.  For the convenience of the parties hereto, this
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
Agreement may be delivered by facsimile and such facsimiles will be deemed as
sufficient as if actual signature pages had been delivered.

    


    
      
        
           


        

        
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    6.4      
     Governing
Law.  This Agreement will be governed by and construed in
accordance with the laws of the State of Georgia applicable to contracts made
and to be performed entirely within such State. The parties hereby irrevocably
and unconditionally consent to submit to the exclusive jurisdiction of the state
and federal courts located in the State of Georgia for any actions, suits or
proceedings arising out of or relating to this Agreement and the transactions
contemplated hereby.

    


    6.5           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 AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

    


    6.6       
    Notices.  Any
notice, request, instruction or other document to be given hereunder by any
party to the other will be in writing and will be deemed to have been duly given
(a) on the date of delivery if delivered personally or by telecopy or facsimile,
upon confirmation of receipt, (b) on the first business day following the date
of dispatch if delivered by a recognized next-day courier service, or (c) on the
third business day following the date of mailing if delivered by registered or
certified mail, return receipt requested, postage prepaid. All notices hereunder
shall be delivered as set forth below, or pursuant to such other instructions as
may be designated in writing by the party to receive such notice.

    


    (a)       
    If to Purchaser to the address set forth on the
signature page hereto.

    


    (b)        
   If to the Company:

    


    PAB
Bankshares, Inc.

    Attention:
Donald J. “Jay” Torbert

    3250
North Valdosta Road

    Valdosta,
Georgia 31602

    Telephone:
(229) 241-2775

    


    


    with a
copy to (which copy alone shall not constitute notice):

    


    Troutman
Sanders LLP

    Attention:
Thomas O. Powell, Esq.

    600
Peachtree Street, N.E. – Suite 5200

    Atlanta,
Georgia 30308

    Telephone:
(404) 885-3294

    Facsimile:
(404) 962-6658

    


    6.7        
   Entire
Agreement; Assignment.  (a) This Agreement (including the
Exhibits, Schedules and Disclosure Schedules hereto) and any other agreements
executed on the date hereof by the parties hereto constitute the entire
agreement, and supersede all other prior agreements, understandings,
representations and warranties, both written and oral, between the parties, with
respect to the subject matter hereof other than the terms of any confidentiality
agreement entered into between the parties; and (b) neither party hereto may
assign this Agreement, in whole or in part, without the prior written consent of
the other party hereto, and any attempted assignment not in accordance herewith
shall be null and void and of no force or effect.

    


    6.8        
   Interpretation; Other
Definitions.  Wherever required by the context of this
Agreement, the singular shall include the plural and vice versa, and the
masculine gender shall include the feminine and neuter genders and vice versa,
and references to any agreement, document or instrument shall be deemed to refer
to such agreement, document or instrument as amended, supplemented or modified
from time to time. All article, section, paragraph or clause references not
attributed to a particular document shall be references to such parts of this
Agreement, and all exhibit, annex and schedule references not attributed to a
particular document shall be references to such exhibits, annexes and schedules
to this Agreement. In addition, the following terms are ascribed the following
meanings:

    


    
      
        
           


        

        
          16

          
            

          

        

        
          
          

        

      

    

     

    (a)      
     the term “Affiliate” means, with
respect to any person, any person directly or indirectly controlling, controlled
by or under common control with, such other person. For purposes of this
definition, “control”(including, with
correlative meanings, the terms “controlled by” and “under common control with”)
when used with respect to any person, means the possession, directly or
indirectly, of the power to cause the direction of management or policies of
such person, whether through the ownership of voting securities by contract or
otherwise;

    


    (b)       
    the word “or” is not
exclusive;

    


    (c)       
    the words “including,” “includes,” “included” and “include” are deemed to be
followed by the words “without
limitation”;

    


    (d)        
   the terms “herein,” “hereof” and “hereunder” and other words of
similar import refer to this Agreement as a whole and not to any particular
section, paragraph or subdivision;

    


    (e)        
   “business
day” means any day except Saturday, Sunday and any day which shall be a
legal holiday or a day on which banking institutions in the State of Georgia
generally are authorized or required by law or other governmental action to
close;

    


    (f)        
   “person” has the meaning given
to it in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d)(3)
and 14(d)(2) of the Exchange Act; and

    


    (g)        
   to the “knowledge of the Company” or
“Company’s knowledge”
means the actual knowledge after due inquiry of the “officers” (as such term is
defined in Rule 3b-2 under the Exchange Act, but excluding any Vice President or
Secretary) of the Company.

    


    6.9     
      Captions.  The
article, section, paragraph and clause captions herein are for convenience of
reference only, do not constitute part of this Agreement and will not be deemed
to limit or otherwise affect any of the provisions hereof.

    


    6.10          Severability.  If
any provision of this Agreement or the application thereof to any person
(including the officers and directors the parties hereto) 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.

    


    6.11          No Third Party
Beneficiaries.  Nothing contained in this Agreement, expressed
or implied, is intended to confer upon any person other than the parties hereto,
any benefit right or remedies.

    


    6.12          Time of
Essence.  Time is of the essence in the performance of each and
every term of this Agreement.

    


    
      
        
           


        

        
          17

          
            

          

        

        
          
          

        

      

    

     

    6.13          Certain
Adjustments.  If the representations and warranties set forth
in Section 2.2(b) are not true and correct in all respects as of the Series A
Closing Date, the number of shares of Series A Preferred Stock shall be, at
Purchaser’s option, proportionately adjusted to provide Purchaser with the same
economic effect as contemplated by this Agreement in the absence of such failure
to be true and correct.

    


    6.14          Public
Announcements.  Subject to each party’s disclosure obligations
imposed by law or regulation or the rules of any stock exchange upon which its
securities are listed, each of the parties hereto will cooperate with each other
in the development and distribution of all news releases and other public
information disclosures with respect to this Agreement and any of the
transactions contemplated by this Agreement.

    


    6.15          Specific
Performance.  The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms. It is accordingly agreed that
the parties shall be entitled to seek specific performance of the terms hereof,
this being in addition to any other remedies to which they are entitled at law
or equity.

    


    [Signature pages
follow]

    


    
      
        
           


        

        
          18

          
            

          

        

        
          
          

        

      

    

    


    IN WITNESS WHEREOF, this
Agreement has been duly executed and delivered by the parties hereto or duly
authorized officers of the parties hereto as of the date first herein above
written.

    


    


    
      
        
          	 
      	
                  “COMPANY”

                
	 
      	 
      
	 
      	
                  PAB
      BANKSHARES, INC.

                
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                  By:

                	 
      
	 
      	
                  Name:

                	 
      
	 
      	
                  Title:

                	 
      


        

      

    

     

    (Signature Page to Investment
Agreement)


    
      
        
           


        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      
        
          	 
      	 
      	
                  “PURCHASER”

                
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                  Signature:

                	 
      
	 
      	
                  Print
      Name:

                	 
      
	 
      	
                  Address:

                	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      


        

      

    

     

    (Signature Page to Investment
Agreement)
(Individual)


    
      
        
           


        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      
        
          
            
              	 
      	
                      “PURCHASER”

                    	 
      
	 
      	 
      	 
      
	 
      	
                      Name
      of Entity:

                    	 	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                      By:

                    	 
      
	 
      	
                      Print
      Name:

                    	 
      
	 
      	
                      Title:

                    	 
      
	 
      	
                      Address:

                    	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      


            

          

        

      

    

     

    (Signature
Page to Investment Agreement)
(Entity)

     

    
      
        
           


        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      
        
          
            
              	 
      	
                      “PURCHASER”

                    	 
      
	 
      	 
      	 
      
	 
      	
                      Name
      of IRA:

                    	 	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                      By:

                    	 
      
	 
      	
                      Print
      Name:

                    	 
      
	 
      	
                      Address:

                    	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      


            

          

        

      

    

     

    (Signature
Page to Investment Agreement)
(IRA)