AB&T FINANCIAL CORPORATION

(a North Carolina corporation)

536 Shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A

PLACEMENT AGENCY AGREEMENT

January 27, 2014

The Placement Agents Set

Forth on Schedule A Hereto

Ladies and Gentlemen:

AB&T Financial Corporation, a North Carolina corporation (the "Company"), Alliance 

Bank & Trust Company, a North Carolina banking corporation (the "Bank"), and the United 

States Department of the Treasury (the "Selling Shareholder") each confirms its agreement (this 

"Agreement") with the placement agents set forth on Schedule A hereto (the "Placement Agents") 

with respect to the direct sale by the Selling Shareholder to one or more Winning Bidders (as 

defined in Section 2(a) hereof) and the placement, as agent of the Selling Shareholder, by the 

Placement Agents of 536 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A, 

no par value per share, of the Company (the "Securities").

Offers in the auction for the Securities (the "Auction") will only be made to 

potential investors who are (i) "qualified institutional buyers" (as defined in Rule 144A 

under the Securities Act of 1933, as amended (the "1933 Act")) that are organized under 

the laws of a state of the U.S. or the District of Columbia, (ii) institutions or other entities

that are "accredited investors" that meet the standards in Rule 501(a)(1), (2), (3) or (7) 

under the 1933 Act and having total assets or assets under management of not less than 

$25,000,000, that are organized under the laws of a state of the U.S. or the District of 

Columbia or (iii) directors or executive officers of the Company who or which, in each case, 

meet the suitability requirements set forth in the bidder letter provided by each bidder 

(each, a "Bidder"), a form of which is attached hereto as Schedule B (each, a "Bidder 

Letter") and are resident in the U.S., and such offers and the sale of the Securities to the 

Winning Bidder(s) will be made without registration under the 1933 Act.
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This Agreement, the Company's Articles of Incorporation, as amended by the Articles of 

Amendment with respect to the Securities (collectively, the "Charter"), and the Company's ByLaws (the "By-Laws") are referred to herein, collectively, as the "Operative Documents."

SECTION 1. Representations and Warranties.

(a) Representations and Warranties by the Company. The Company represents and 

warrants to the Winning Bidder(s), each Placement Agent and the Selling Shareholder, at the 

date of execution of this Agreement, on the date (the "Pricing Date") and at the time that the 

clearing price for the Securities is determined in accordance with Section 2(a) hereof (the 

"Applicable Time") and the Closing Time (as defined below) (each, a "Representation Date"), 

and agrees with the Winning Bidder(s), each Placement Agent and the Selling Shareholder, as 

follows:

(i) Financial Statements. The financial statements of the Company and the 

Bank, filed with their respective regulators and the Securities and Exchange Commission 

(the "Commission") during the past five fiscal years and any interim periods since the 

most recent fiscal year end present fairly the financial position of the Company and its 

consolidated subsidiaries and the Bank at the dates and for the periods of such statements; 

such financial statements have been prepared in conformity with the requirements of the 

applicable regulator and with U.S. generally accepted accounting principles applied on a 

consistent basis throughout the periods involved.

(ii) Public Filings. The documents filed by the Company (the "Public Filings") 

with the Commission at the time they were filed with the Commission, complied in all 

material respects with the requirements of the 1933 Act, the Securities Exchange Act of 

1934, as amended (the "1934 Act"), and the rules and regulations promulgated thereunder, 

as applicable. The Public Filings do not include any untrue statement of a material fact or 

omit to state a material fact required to be stated therein or necessary to make the 

statements therein not misleading.

(iii) No Material Adverse Change. Since the date of the last filing of financial 

statements by the Company or the Bank with the applicable regulator, (A) there has been 

no material adverse change in the condition, financial or otherwise, or in the earnings, 

business affairs or business prospects of the Company and its subsidiaries considered as 

one enterprise, whether or not arising in the ordinary course of business (a "Material 

Adverse Change") and (B) there have been no transactions entered into, or dividends or 

distributions declared, paid or made by the Company or any of its subsidiaries, other than 

those in the ordinary course of business, which are material with respect to the Company 

and its subsidiaries considered as one enterprise.
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(iv) Good Standing of the Company. Except as disclosed in Schedule C, the 

Company has been duly organized and is validly existing as a corporation in good 

standing under the laws of the State of North Carolina and has all requisite corporate 

power and authority to own, lease and operate its properties, to conduct its business and 

to enter into and perform its obligations under, and to consummate the transactions 

contemplated in, the Operative Documents and the Securities. The Company is duly 

qualified as a foreign corporation to transact business and is in good standing in each 

jurisdiction in which such qualification is required, whether by reason of the ownership 

or leasing of property or the conduct of business, except where the failure so to qualify or 

to be in good standing would not, singly or in the aggregate, result in a material adverse 

effect (A) in the condition, financial or otherwise, or in the earnings, business affairs or 

business prospects of the Company and its subsidiaries considered as one enterprise, 

whether or not arising in the ordinary course of business, or (B) on the ability of the 

Company to enter into and perform its obligations under, or consummate the transactions 

contemplated in, the Operative Documents (a "Material Adverse Effect"). The Company 

is duly registered as a bank holding company under the Bank Holding Company Act of 

1956, as amended. No change to the Charter and By-Laws is contemplated or has been 

authorized or approved by the Company or its stockholders.

(v) Good Standing of Subsidiaries. Each "significant subsidiary" of the 

Company (as such term is defined in Rule 1-02 of Regulation S-X) (including the Bank) 

(each, a "Significant Subsidiary" and, collectively, the "Significant Subsidiaries") has 

been duly organized and is validly existing and in good standing under the laws of the 

jurisdiction of its incorporation or other organization, has all requisite corporate power 

and authority to own, lease and operate its properties, to conduct its business and, in the 

case of the Bank, to enter into, and perform its obligations under, this Agreement and is 

duly qualified to transact business and is in good standing in each jurisdiction in which 

such qualification is required, whether by reason of the ownership or leasing of property 

or the conduct of business, except where the failure to so qualify or to be in good 

standing would not, singly or in the aggregate, result in a Material Adverse Effect. All of 

the issued and outstanding shares of capital stock of or other equity interests in each 

Significant Subsidiary have been duly authorized and validly issued, are fully paid and 

non-assessable and are owned by the Company, directly or through subsidiaries, free and 

clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity. 

None of the outstanding shares of capital stock of or other equity interests in any 

Significant Subsidiary were issued in violation of the preemptive or similar rights of any 

securityholder of such Significant Subsidiary or any other entity. The only subsidiaries 

of the Company other than the Significant Subsidiaries are subsidiaries which, considered 

in the aggregate as a single subsidiary, do not constitute a "significant subsidiary" within 

the meaning of Rule 1-02 of Regulation S-X. The deposit accounts of the Company's 

banking subsidiary are insured up to the applicable limits by the Deposit Insurance Fund 

of the Federal Deposit Insurance Corporation (the "FDIC") to the fullest extent permitted 

by law and the rules and regulations of the FDIC, and no proceeding for the revocation or 

termination of such insurance is pending or, to the knowledge of the Company, 

threatened.
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(vi) Regulatory Matters. Except as disclosed in Schedule C, neither the 

Company nor any of its subsidiaries (including the Bank) is subject or is party to, or has 

received any notice or advice from any Regulatory Agency (as defined below) that any of 

them may become subject or party to any investigation with respect to, any corrective, 

suspension or cease-and-desist order, agreement, consent agreement, memorandum of 

understanding or other regulatory enforcement action, proceeding or order with or by, or 

is a party to any commitment letter or similar undertaking to, or is subject to any directive 

by, or has been a recipient of any supervisory letter from, or has adopted any board 

resolutions at the request of, any Regulatory Agency that currently relates to or restricts 

in any material respect the conduct of their business or that in any manner relates to their 

capital adequacy, credit policies, management or business (each, a "Regulatory 

Agreement"), nor has the Company or any of its subsidiaries been advised by any 

Regulatory Agency that it is considering issuing or requesting any Regulatory Agreement. 

There is no unresolved violation, criticism or exception by any Regulatory Agency with 

respect to any report or statement relating to any examinations of the Company or any of 

its subsidiaries. The Company and its subsidiaries are in compliance in all material 

respects with all laws administered by the Regulatory Agencies. As used herein, the term 

"Regulatory Agency" means any federal or state agency charged with the supervision or 

regulation of depositary institutions or holding companies of depositary institutions, or 

engaged in the insurance of depositary institution deposits, or any court, administrative 

agency or commission or other authority, body or agency having supervisory or 

regulatory authority with respect to the Company or any of its subsidiaries.

(vii) Capitalization. Except as disclosed in Schedule C, the authorized, issued 

and outstanding shares of capital stock of the Company are as set forth in the last filing of 

financial statements by the Company with the applicable regulator. The outstanding 

shares of capital stock of the Company, including the Securities, have been duly 

authorized and validly issued and are fully paid and non-assessable. None of the 

outstanding shares of capital stock of the Company, including the Securities, were issued 

in violation of the preemptive or other similar rights of any securityholder of the 

Company or any other entity. The total equity of the Company, as set forth in the 

Company's most recent publicly available Reporting Form FR Y-9 under the line item 

"Total Equity Capital", has not materially decreased.

(viii) Authorization of Agreement. This Agreement has been duly authorized, 

executed and delivered by each of the Company and the Bank.

(ix) Filing of Articles of Amendment; Form of Certificate. The Articles of 

Amendment for the Securities have been duly filed with the Secretary of State of the 

State of North Carolina. The form of certificate representing the Securities complies with 

the requirements of North Carolina state law, the Charter and the By-Laws.

(x) Absence of Violations, Defaults and Conflicts. Except as disclosed in 

Schedule C, neither the Company nor any of its subsidiaries (including the Bank) is 
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(A) in violation of its charter, by-laws or similar organizational document, (B) in default 

in the performance or observance of any obligation, agreement, covenant or condition 

contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, 

note, lease or other agreement or instrument to which the Company or any of its 

subsidiaries is a party or by which it or any of them may be bound or to which any of the 

properties, assets or operations of the Company or any of its subsidiaries is subject 

(collectively, "Agreements and Instruments"), except for such defaults that would not, 

singly or in the aggregate, result in a Material Adverse Effect, or (C) in violation of any 

law, statute, rule, regulation, judgment, order, writ or decree of any arbitrator, court, 

governmental body, regulatory body, administrative agency (including, without limitation, 

each applicable Regulatory Agency) or other authority, body or agency having 

jurisdiction over the Company or any of its subsidiaries or any of their respective 

properties, assets or operations (each, a "Governmental Entity"), except for such 

violations that would not, singly or in the aggregate, result in a Material Adverse Effect. 

The execution, delivery and performance of the Operative Documents and the 

consummation of the transactions contemplated in this Agreement and compliance by the 

Company and the Bank with their respective obligations under the Operative Documents 

have been duly authorized by the Company and the Bank, as the case may be, by all 

requisite action and do not and will not, whether with or without the giving of notice or 

passage of time or both, conflict with or constitute a breach of, or default or Repayment 

Event (as defined below) under, or result in the creation or imposition of any lien, charge 

or encumbrance upon any properties, assets or operations of the Company or any of its 

subsidiaries pursuant to, the Agreements and Instruments (except for such conflicts, 

breaches, defaults or Repayment Events or liens, charges or encumbrances that would not, 

singly or in the aggregate, result in a Material Adverse Effect), nor will such action result 

in any violation of the provisions of the charter, by-laws or similar organizational 

document of the Company or any of its subsidiaries or any law, statute, rule, regulation, 

judgment, order, writ or decree of any Governmental Entity. As used herein, a 

"Repayment Event" means any event or condition which gives the holder of any note, 

debenture or other financing instrument (or any person acting on such holder's behalf) the 

right to require the repurchase, redemption or repayment of all or a portion of the related 

financing by the Company or any of its subsidiaries.

(xi) Absence of Proceedings. There is no action, suit, proceeding, inquiry or 

investigation before or brought by any Governmental Entity now pending, or, to the 

knowledge of the Company, threatened, against or affecting the Company or any of its 

subsidiaries, which could, singly or in the aggregate, result in a Material Adverse Effect. 

(xii) Absence of Further Requirements. Assuming the accuracy of the 

representations, warranties and covenants of the Winning Bidder(s) set forth in Section 1 

of the Bidder Letter(s), no filing with, or authorization, approval, consent, license, order, 

registration, qualification or decree of, any Governmental Entity is necessary or required 

for the Company or the Bank to enter into, or perform their respective obligations under, 

the Operative Documents or the consummation of the transactions contemplated in this 

Agreement, except such as have been already obtained, including, without limitation, the 
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registration under the 1933 Act of the offer, sale and delivery of the Securities by the 

Selling Shareholder through the Placement Agents to the Winning Bidder(s) in 

accordance with this Agreement and the Bidder Letter(s). If any directors or executive 

officers of the Company are intending to bid in the Auction, the Company has delivered 

to the Selling Shareholder and the Placement Agents, prior to the date hereof, evidence 

sufficient to the Selling Shareholder and the Placement Agents that such directors and/or 

executive officers of the Company have complied and will comply with the requirements 

under applicable state securities law. 

(xiii) Environmental Laws. Except as would not, singly or in the aggregate, 

result in a Material Adverse Effect, (A) neither the Company nor any of its subsidiaries is 

in violation of any applicable law, rule, regulation or policy relating to pollution or 

protection of human health and safety, the environment or hazardous or toxic substances 

or wastes, pollutants or contaminants (collectively, "Environmental Laws"), (B) the 

Company and its subsidiaries have all permits, authorizations and approvals required 

under any applicable Environmental Laws to conduct their respective businesses, (C) 

there are no pending or threatened administrative, regulatory or judicial actions, 

investigation or proceedings relating to any Environmental Law against the Company or 

any of its subsidiaries and (D) there are no events or circumstances that would reasonably 

be expected to form the basis of an order for clean-up or remediation, or an action, suit or 

proceeding by any private party or Governmental Entity, against or affecting the 

Company or any of its subsidiaries relating to any Environmental Laws.

(xiv) Payment of Taxes. All United States federal income tax returns of the 

Company and its subsidiaries required by law to be filed have been filed and all taxes 

shown by such returns or otherwise assessed, which are due and payable, have been paid, 

except assessments against which appeals have been or will be promptly taken and as to 

which adequate reserves have been provided. The Company and its subsidiaries have 

filed all other tax returns that are required to have been filed by them pursuant to 

applicable foreign, state, local or other law except insofar as the failure to file such 

returns would not, singly or in the aggregate, result in a Material Adverse Effect, and has 

paid all taxes due pursuant to such returns or pursuant to any assessment received by the 

Company or any of its subsidiaries, except for such taxes, if any, as are being contested in 

good faith and as to which adequate reserves have been established by the Company. 

(xv) Investment Company Act. Neither the Company nor the Bank is required, 

or upon the consummation of the transactions contemplated in this Agreement will be 

required, to register as an "investment company" under the Investment Company Act of 

1940, as amended (the "1940 Act").

(xvi) Foreign Corrupt Practices Act. None of the Company, any of its 

subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee, 

affiliate or other person acting on behalf of the Company or any of its subsidiaries is 

aware of or has taken any action, directly or indirectly, that would result in a violation by 
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such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and 

regulations thereunder (the "FCPA"), including, without limitation, making use of the 

mails or any means or instrumentality of interstate commerce corruptly in furtherance of 

an offer, payment, promise to pay or authorization of the payment of any money, or other 

property, gift, promise to give, or authorization of the giving of anything of value to any 

"foreign official" (as such term is defined in the FCPA) or any foreign political party or 

official thereof or any candidate for foreign political office, in contravention of the FCPA 

and the Company, its subsidiaries and, to the knowledge of the Company, its other 

affiliates have conducted their businesses in compliance with the FCPA and have 

instituted and maintain policies and procedures designed to ensure, and which are 

reasonably expected to continue to ensure, continued compliance therewith.

(xvii) Money Laundering Laws. The operations of the Company and its 

subsidiaries are and have been conducted at all times in compliance with applicable 

financial recordkeeping and reporting requirements of the Currency and Foreign 

Transactions Reporting Act of 1970, as amended, the money laundering statutes of all 

jurisdictions, the rules and regulations thereunder and any related or similar rules, 

regulations or guidelines, issued, administered or enforced by any Governmental Entity 

(collectively, the "Money Laundering Laws"). No action, suit or proceeding by or before 

any Governmental Entity involving the Company or any of its subsidiaries with respect to 

the Money Laundering Laws is pending or, to the best knowledge of the Company, 

threatened which would reasonably be expected to have a Material Adverse Effect.

(xviii) OFAC. None of the Company, any of its subsidiaries or, to the knowledge 

of the Company, any director, officer, agent, employee, affiliate or other person acting on 

behalf of the Company or any of its subsidiaries is (A) an individual or entity ("Person") 

currently the subject of any sanctions administered or enforced by the United States 

Government, including, without limitation, the U.S. Department of the Treasury's Office 

of Foreign Assets Control ("OFAC"), the United Nations Security Council ("UNSC"), the 

European Union, Her Majesty's Treasury ("HMT"), or other relevant sanctions authority 

(collectively, "Sanctions") or (B) located, organized or resident in a country or territory 

that is the subject of Sanctions.

(xix) Dividend Payments. Except as disclosed in Schedule C, neither the 

Company nor any subsidiary of the Company is currently prohibited, directly or 

indirectly, under any order of any Regulatory Agency (other than orders applicable to 

bank or savings and loan holding companies and their subsidiaries generally), under any 

applicable law, or under any agreement or other instrument to which it is a party or is 

subject, from paying any dividends on any of its capital stock (including the Securities in 

the case of the Company, and any dividends to the Company in the case of any subsidiary 

of the Company), from making any other distribution on the Company's or such 

subsidiary's capital stock, or in the case of any subsidiary, from repaying to the Company 

or any other subsidiary of the Company any loans or advances to such subsidiary or from 

transferring any of such subsidiary's properties, assets or operations to the Company or 
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any other subsidiary of the Company. As of the date of this Agreement and as further 

described in Schedule C, the Company has not declared and paid (and has not sought and 

received any and all necessary regulatory or other approvals to declare and pay), and for 

the foreseeable future after the date of this Agreement does not intend to declare and pay

(and does not intend to seek any and all necessary regulatory or other approvals to 

declare and pay), each scheduled dividend payment on the Securities.

(b) Intention to Bid for or Repurchase Securities. 

(i) Intention to Bid. Except as disclosed in Schedule C, neither the Company 

nor any officers and directors of the Company intends to submit bids for the Securities in 

the Auction.

(ii) Redemption or Repurchase of Securities. As disclosed in Schedule C, the 

Company may repurchase or redeem the Securities subject to certain conditions.

(c) Representations and Warranties by the Selling Shareholder. The Selling 

Shareholder represents and warrants to, and agrees with, the Company, the Winning Bidder(s) 

and each Placement Agent at each Representation Date as follows:

(i) Good and Marketable Title. The Selling Shareholder now has and at the 

Closing Time will have good and marketable title to the Securities to be sold by it, free 

and clear of any liens, encumbrances, equities and claims, and full right, power and 

authority to effect the sale and delivery of the Securities. Upon the delivery of, against 

payment for, the Securities pursuant to this Agreement and the Bidder Letter with each 

Winning Bidder and, assuming a Winning Bidder does not have notice of any adverse 

claim (within the meaning of the Uniform Commercial Code as in effect in the State of 

New York), such Winning Bidder will acquire good and marketable title thereto, free and 

clear of any liens, encumbrances, equities and claims.

(ii) Authorization of Agreement. The Selling Shareholder has full right, 

power and authority to execute and deliver this Agreement and to perform its obligations 

hereunder, and this Agreement has each been duly authorized, executed and delivered by 

or on behalf of the Selling Shareholder.

(iii) Absence of Further Requirements. No consent, approval or waiver is 

required under any instrument or agreement to which the Selling Shareholder is a party or 

by which the Selling Shareholder is bound in connection with the Auction, the offering 

and sale by the Selling Shareholder and the purchase by a Winning Bidder of any of the 

Securities under this Agreement or the Bidder Letter with such Winning Bidder or the 
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consummation by the Selling Shareholder of any of the other transactions contemplated 

under this Agreement or such Bidder Letter.

(d) Officer's Certificates. Any certificate signed by any officer of the Company or 

any of its subsidiaries (including the Bank) and delivered to the Winning Bidder(s) and/or the 

Placement Agents shall be deemed a representation and warranty by the Company and, if 

applicable, the Bank to the Winning Bidder(s) and the Placement Agents as to the matters 

covered thereby.

SECTION 2. Sale and Delivery of Securities; Closing.

(a) Securities. On the basis of the representations, warranties and covenants 

contained herein and in each Bidder Letter, and subject to the terms and conditions contained 

herein and in the Auction Procedures described in each Bidder Letter, the Selling Shareholder 

agrees to sell, and each Placement Agent agrees to use commercially reasonable efforts to place, 

the number of Securities at the clearing price, in each case, determined in accordance with the 

Auction Procedures, directly to the Bidder or Bidders that the Placement Agents and the Selling 

Shareholder determine, pursuant to the Auction Procedures, has won the Auction (each such 

Bidder, a "Winning Bidder"); provided that the Selling Shareholder may, in its discretion, 

determine not to sell any Securities upon completion of the Auction. The Selling Shareholder 

shall notify the Placement Agents whether it has decided to sell the Securities in the Auction as 

promptly as practicable after completion of the Auction and determination of the clearing price, 

as well as the specific number of Securities it has decided to sell.

(b) Compensation. The Company shall not be responsible for the payment of any 

fees to the Placement Agents hereunder for the services to be provided by the Placement Agents 

in connection with the Auction.

(c) Payment. Payment of the purchase price for, and delivery of certificates for, the 

Securities shall be made at the offices of Paul, Weiss, Rifkind, Wharton & Garrison LLP, or at 

such other place as shall be agreed upon by the Winning Bidder(s) and the Selling Shareholder, 

at 9:00 A.M. (New York City time) on the seventh business day after the Pricing Date, or such 

other time not later than ten business days after such date as shall be agreed upon by the Winning 

Bidder(s) and the Selling Shareholder (such time and date of payment and delivery being herein 

called "Closing Time").

Prior to the Closing Time, the Selling Shareholder, or a Placement Agent, if so directed 

by the Selling Shareholder, will provide payment and wire transfer instructions to the Winning 

Bidder(s). At or prior to the Closing Time, each Winning Bidder shall make payment to the 

Selling Shareholder by wire transfer of immediately available funds in accordance with such 

instructions against delivery at the Closing Time to such Winning Bidder of certificates for the 
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Securities in physical form registered in the name of such Winning Bidder or its authorized agent 

or nominee.

Notwithstanding anything to the contrary contained herein, neither Placement Agent shall 

have any obligation to purchase any Securities from the Selling Shareholder or have any liability, 

to the Selling Shareholder or otherwise, in the event that a Winning Bidder fails to consummate 

the purchase of the Securities. 

SECTION 3. Covenants of the Company. The Company covenants with the Winning 

Bidder(s), each Placement Agent and the Selling Shareholder as follows:

(a) Update of Information. If, prior to the Closing Time, any event shall occur or 

condition shall exist which would, singly or in the aggregate, result in a Material Adverse Effect 

the Company will promptly give the Winning Bidder(s), the Placement Agents and the Selling 

Shareholder written notice of such event or condition and effects therefrom, as well as copies of 

any related documentation. 

(b) Blue Sky Qualifications. The Company will use its best efforts, in cooperation 

with the Placement Agents and the Selling Shareholder, to qualify the Securities for offering and 

sale under the applicable securities laws of such states as the Placement Agents and the Selling 

Shareholder may reasonably designate and to maintain such qualifications in effect so long as 

required to complete the placement of the Securities; provided, however, that the Company shall 

not be obligated to file any general consent to service of process or to qualify as a foreign 

corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to 

subject itself to taxation in respect of doing business in any jurisdiction in which it is not 

otherwise so subject.

(c) Restriction on Sale of Securities. During a period of 30 days from the date of this 

Agreement, the Company will not, without the prior written consent of the Placement Agents, 

(i) directly or indirectly, offer, pledge, sell, contract to sell, sell any option or contract to 

purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase 

or otherwise transfer or dispose of any shares of preferred stock or any securities convertible into 

or exercisable or exchangeable for preferred stock or file any registration statement under the 

1933 Act with respect to any of the foregoing or (ii) enter into any swap or any other agreement 

or any transaction that transfers, in whole or in part, directly or indirectly, the economic 

consequence of ownership of preferred stock, whether any such swap or transaction described in 

clause (i) or (ii) above is to be settled by delivery of preferred stock or such other securities, in 

cash or otherwise.

(d) Registrar; Transfer Agent. The Company will maintain a registrar and transfer 

agent for the Securities.
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SECTION 4. [Intentionally Omitted]

SECTION 5. Payment of Expenses.

(a) Expenses. The Company will pay or cause to be paid all expenses incident to the 

performance of its obligations under this Agreement, including (i) the preparation, issuance and 

delivery of the certificates for the Securities in physical form to each Winning Bidder, including 

any stock or other transfer taxes and any stamp or other duties payable upon the sale, issuance or 

delivery of the Securities to such Winning Bidder, (ii) the fees and disbursements of the 

Company's counsel and other advisors, (iii) the qualification of the Securities under securities 

laws in accordance with the provisions of Section 3(b) hereof, (iv) the fees and expenses of the 

registrar and transfer agent for the Securities, (v) the costs and expenses of any state securities 

law analysis in connection with the transactions contemplated by this Agreement, and (vi) the 

costs and expenses (including, without limitation, any damages or other amounts payable in 

connection with legal or contractual liability) associated with the reforming of any contracts for 

sale of the Securities caused by a breach of the representation contained in Section 1(a)(i) hereof.

(b) Termination of Agreement. If this Agreement is terminated by the Placement 

Agents in accordance with the provisions of Section 6 or Section 10(a)(i) hereof, the Company 

shall reimburse the Placement Agents for all of their out-of-pocket expenses, including the 

reasonable fees and disbursements of counsel for the Placement Agents.

(c) Other Agreement. The provisions of this Section 5 shall not supersede or 

otherwise affect any agreement that the Company and the Selling Shareholder may otherwise 

have entered into for the allocation of such expenses between them.

SECTION 6. Conditions of Placement Agents' and Selling Shareholder's Obligations. 

The obligations of the Placement Agents and the Selling Shareholder hereunder are subject to the 

following conditions:

(a) Accuracy of Representations and Warranties; Performance of Covenants. At the 

Closing Time, the representations and warranties contained herein or in certificates of any officer 

of the Company or any of its subsidiaries (including the Bank) delivered pursuant to the 

provisions hereof, shall be true and correct, when made, and at the Closing Time, and the 

Company shall have performed its covenants and other obligations hereunder.

(b) Opinion of Counsel for Company. At the Closing Time, the Placement Agents 

and the Selling Shareholder shall have received the favorable opinion, dated the Closing Time, of 

Wyrick Robbins Yates & Ponton LLP, counsel for the Company, in form and substance 

satisfactory to the Placement Agents and the Selling Shareholder, to the effect set forth in 
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Exhibit A hereto and to such further effect as counsel to the Placement Agents and the Selling 

Shareholder may reasonably request.

(c) Officers' Certificate. At the Closing Time, there shall not have been, since the 

date hereof or since the date of the latest audited balance sheet included in the last financial 

statements of the Company filed with the applicable regulator, any Material Adverse Change, 

and the Placement Agents and the Selling Shareholder shall have received a certificate of the 

Chief Executive Officer or the President and of the chief financial or chief accounting officer of 

the Company, dated the Closing Time, to the effect set forth in Exhibit B hereto. 

(d) Evidence of Blue Sky Compliance. If any directors or executive officers of the 

Company are intending to bid in the Auction, the Company shall have delivered to the Selling 

Shareholder and the Placement Agents, prior to the date hereof, evidence sufficient to the Selling 

Shareholder and the Placement Agents that such directors and/or executive officers of the 

Company have complied and will comply with the requirements under applicable state securities 

law.

(e) Maintenance of Rating. Since the execution of this Agreement, there shall not 

have been any decrease in or withdrawal of the rating of any securities of the Company or any of 

its subsidiaries (including the Bank) by any "nationally recognized statistical rating organization"

(as defined for purposes of Section 3(a)(62) of the 1934 Act) or any notice given of any intended 

or potential decrease in or withdrawal of any such rating or of a possible change in any such 

rating that does not indicate the direction of the possible change.

(f) Determination of Clearing Price. The Selling Shareholder and the Placement 

Agents shall have determined, in writing, the clearing price for the Securities in the Auction.

(g) Reissuance of Securities. The Company shall have reissued the Securities, in the 

respective numbers determined in accordance with the Auction Procedures, in physical form in 

the name of each Winning Bidder or its authorized agent or nominee.

(h) Additional Documents. At the Closing Time, all proceedings taken by the 

Company and the Bank in connection with this Agreement shall be satisfactory in form and 

substance to the Selling Shareholder and the Placement Agents.

(i) Termination of Agreement. If any condition specified in this Section shall not 

have been fulfilled when and as required to be fulfilled or will not have been fulfilled when and 

as required to be fulfilled, the obligations of the Placement Agents may be terminated by the 

Placement Agents by notice to the Company and the Selling Shareholder at any time at or prior 

to Closing Time, and such termination shall be without liability of any party to any other party 
13

except as provided in Section 5 and except that Sections 1, 7, 8, 9, 14, 15 and 16 shall survive 

any such termination and remain in full force and effect.

SECTION 7. Indemnification.

(a) Indemnification of Agents. The Company and the Bank, jointly and severally, 

agree to indemnify and hold harmless each Placement Agent, its affiliates (as such term is 

defined in Rule 501(b) promulgated under the 1933 Act (each, an "Affiliate")), selling agents, 

partners, officers and directors, each person, if any, who controls a Placement Agent within the 

meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, the Selling Shareholder 

and the Selling Shareholder's agents, including, without limitation, Houlihan Lokey Capital, Inc. 

(the "Financial Agent") as follows:

(i) against any and all loss, liability, claim, damage and expense whatsoever, 

as incurred, arising out of (1) the engagement as Placement Agent under this Agreement, 

(2) any untrue statement or alleged untrue statement of a material fact included in any 

information provided by the Company or its subsidiaries to the Bidders, or included in 

any Public Filing, or the omission or alleged omission in such information (or any 

amendment or supplement thereto) of a material fact necessary in order to make the 

statements therein, in the light of the circumstances under which they were made, not 

misleading or (3) the breach or alleged breach of any representation, warranty or 

covenant of the Company or the Bank under this Agreement;

(ii) against any and all loss, liability, claim, damage and expense whatsoever, 

as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or 

any investigation or proceeding by any Governmental Entity, commenced or threatened, 

or of any claim whatsoever based upon any such untrue statement or omission, or any 

such alleged untrue statement or omission; provided that (subject to Section 7(c) hereof) 

any such settlement is effected with the written consent of the Company; and

(iii) against any and all expense whatsoever, as incurred (including the fees 

and disbursements of counsel chosen by the Placement Agents), reasonably incurred in 

investigating, preparing or defending against any litigation, or any investigation or 

proceeding by any Governmental Entity, commenced or threatened, or any claim 

whatsoever based upon any such untrue statement or omission, or any such alleged untrue 

statement or omission, to the extent that any such expense is not paid under (i) or 

(ii) above.

(b) Actions against Parties; Notification. Each indemnified party shall give notice as 

promptly as reasonably practicable to each indemnifying party of any action commenced against 

it in respect of which indemnity may be sought hereunder, but failure to so notify an 

indemnifying party shall not relieve such indemnifying party from any liability hereunder to the 
14

extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from 

any liability which it may have otherwise than on account of this indemnity agreement. In case 

any such action is brought against any indemnified party and such indemnified party seeks or 

intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled to 

participate in and, to the extent that it shall elect, jointly with all other indemnifying parties 

similarly notified, by written notice delivered to the indemnified party promptly after receiving 

the aforesaid notice from such indemnified party, to assume the defense thereof with counsel 

reasonably satisfactory to such indemnified party; provided, however, if the defendants in any 

such action include both the indemnified party and the indemnifying party and the indemnified 

party shall have reasonably concluded that a conflict may arise between the positions of the 

indemnifying party and the indemnified party in conducting the defense of any such action or 

that there may be legal defenses available to it and/or other indemnified parties which are 

different from or additional to those available to the indemnifying party, the indemnified party or 

parties shall have the right to select separate counsel to assume such legal defenses and to 

otherwise participate in the defense of such action on behalf of such indemnified party or parties. 

Upon receipt of notice from the indemnifying party to such indemnified party of such 

indemnifying party's election so to assume the defense of such action and approval by the 

indemnified party of counsel, the indemnifying party will not be liable to such indemnified party 

under this Section 7 for any legal or other expenses subsequently incurred by such indemnified 

party in connection with the defense thereof unless (i) the indemnified party shall have employed 

separate counsel in accordance with the proviso to the immediately preceding sentence (it being 

understood, however, that the indemnifying party shall not be liable for the expenses of more 

than one separate counsel (together with local counsel), approved by the indemnifying party (or 

by the Placement Agents in the case of Section 8 hereof), representing the indemnified parties 

who are parties to such action) or (ii) the indemnifying party shall not have employed counsel 

satisfactory to the indemnified party to represent the indemnified party within a reasonable time 

after notice of commencement of the action, in each of which cases the fees and expenses of 

counsel shall be at the expense of the indemnifying party. No indemnifying party shall, without 

the prior written consent of the indemnified parties, settle or compromise or consent to the entry 

of any judgment with respect to any litigation, or any investigation or proceeding by any 

Governmental Entity, commenced or threatened, or any claim whatsoever in respect of which 

indemnification or contribution could be sought under this Section 7 or Section 8 hereof 

(whether or not the indemnified parties are actual or potential parties thereto), unless such 

settlement, compromise or consent (i) includes an unconditional release of each indemnified 

party from all liability arising out of such litigation, investigation, proceeding or claim and 

(ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or 

on behalf of any indemnified party.

(c) Settlement without Consent if Failure to Reimburse. If at any time an indemnified 

party shall have requested an indemnifying party to reimburse the indemnified party for fees and 

expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of 

the nature contemplated by Section 7(a)(ii) effected without its written consent if (i) such 

settlement is entered into more than 45 days after receipt by such indemnifying party of the 

aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such 

settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying 

party shall not have reimbursed such indemnified party in accordance with such request (other 
15

than those fees and expenses that are being contested in good faith) prior to the date of such 

settlement.

(d) Exclusion. Notwithstanding the foregoing, the indemnification provided for in 

this Section 7 and the contribution provided for in Section 8 shall not apply to the Bank to the 

extent that such indemnification or contribution, as the case may be, by the Bank is found by any 

Regulatory Agency, or in a final judgment by a court of competent jurisdiction, to constitute a 

transaction that is subject to the provisions of Section 23A or Section 23B of the Federal Reserve 

Act.

SECTION 8. Contribution. If the indemnification provided for in Section 7 hereof is for 

any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any 

losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party 

shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses 

incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect 

the relative benefits received by the Company, the Bank and the Selling Shareholder, on the one 

hand, and the Placement Agents, on the other hand, from the offering of the Securities pursuant 

to this Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable 

law, in such proportion as is appropriate to reflect not only the relative benefits referred to in 

clause (i) above but also the relative fault of the Company, the Bank and the Selling Shareholder, 

on the one hand, and the Placement Agents, on the other hand, in connection with the statements 

or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as 

any other relevant equitable considerations.

The relative benefits received by the Company, the Bank and the Selling Shareholder, on 

the one hand, and the Placement Agents, on the other hand, in connection with the offering of the 

Securities pursuant to this Agreement shall be deemed to be in the same respective proportions 

as the total net proceeds from the offering of the Securities pursuant to this Agreement (before 

deducting expenses) received by the Company, the Bank and the Selling Shareholder, on the one 

hand, and the total placement fees received by the Placement Agents, on the other hand, bear to 

the aggregate initial offering price of the Securities.

The relative fault of the Company, the Bank and the Selling Shareholder, on the one hand, 

and the Placement Agents, on the other hand, shall be determined by reference to, among other 

things, whether any such untrue or alleged untrue statement of a material fact or omission or 

alleged omission to state a material fact relates to information supplied by the Company, the 

Bank or the Selling Shareholder or by the Placement Agents, as the case may be, and the parties'

relative intent, knowledge, access to information and opportunity to correct or prevent such 

statement or omission.

The parties hereto agree that it would not be just and equitable if contribution pursuant to 

this Section 8 were determined by pro rata allocation (even if the Placement Agents were treated 

as one entity for such purpose) or by any other method of allocation which does not take account 
16

of the equitable considerations referred to above in this Section 8. The aggregate amount of 

losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to 

above in this Section 8 shall be deemed to include any legal or other expenses reasonably 

incurred by such indemnified party in investigating, preparing or defending against any litigation, 

or any investigation or proceeding by any Governmental Entity, commenced or threatened, or 

any claim whatsoever based upon any such untrue or alleged untrue statement or omission or 

alleged omission.

Notwithstanding the provisions of this Section 8, neither Placement Agent shall be 

required to contribute any amount in excess of the placement fees received by such Placement 

Agent in connection with the Securities sold through it as agent.

No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of 

the 1933 Act) shall be entitled to contribution from any person who was not guilty of such 

fraudulent misrepresentation.

For purposes of this Section 8, each person, if any, who controls a Placement Agent 

within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each 

Placement Agent's Affiliates, selling agents, partners, officers and directors shall have the same 

rights to contribution as such Placement Agent. The Placement Agent's respective obligations to 

contribute pursuant to this Section 8 are several in proportion to the number of Securities sold 

through each of them as agent, and not joint.

SECTION 9. Representations, Warranties and Agreements to Survive. All 

representations, warranties and agreements contained in this Agreement, or in certificates of 

officers of the Company or any of its subsidiaries (including the Bank) submitted pursuant hereto, 

shall remain operative and in full force and effect regardless of (i) any investigation made by or 

on behalf of a Placement Agent or its Affiliates, partners, officers, directors and or selling agents, 

any person controlling a Placement Agent or any person controlling the Company or the Selling 

Shareholder or any representative of the Selling Shareholder and (ii) delivery of and payment for 

the Securities. 

SECTION 10. Termination of Agreement.

(a) Termination. The Placement Agents may terminate this Agreement, by notice to 

the Company and the Selling Shareholder, at any time at or prior to the Closing Time, (i) if there 

has been, in the judgment of the Placement Agents, since the time of execution of this 

Agreement or since the date of the latest audited balance sheet included in the last financial 

statements of the Company filed with the applicable regulator, any Material Adverse Change, or 

(ii) if there has occurred any material adverse change in the financial markets in the United 

States or the international financial markets, any outbreak of hostilities or escalation thereof or 

other calamity or crisis or any change or development involving a prospective change in national 
17

or international political, financial or economic conditions, in each case the effect of which is 

such as to make it, in the judgment of the Placement Agents, impracticable or inadvisable to 

proceed with the completion of the offering of the Securities or to enforce contracts for the sale 

of the Securities, or (iii) if trading generally on the New York Stock Exchange or in the Nasdaq 

Global Market has been suspended or materially limited, or minimum or maximum prices for 

trading have been fixed, or maximum ranges for prices have been required, by any of said 

exchanges or by order of the Securities and Exchange Commission, FINRA or any other 

Governmental Entity, or (iv) if a material disruption has occurred in commercial banking or 

securities settlement or clearance services in the United States or with respect to Clearstream or 

Euroclear systems in Europe, or (v) if a banking moratorium has been declared by either Federal, 

New York or North Carolina authorities.

(b) Liabilities. If this Agreement is terminated pursuant to this Section, such 

termination shall be without liability of any party to any other party except as provided in 

Section 5 hereof, and provided further that Sections 1, 7, 8, 9, 14, 15 and 16 shall survive such 

termination and remain in full force and effect.

SECTION 11. Notices. All notices and other communications hereunder shall be in 

writing and shall be deemed to have been duly given if mailed or transmitted by any standard 

form of telecommunication, including by facsimile and electronic mail. Notices to the Placement 

Agents shall be directed to each Placement Agent as set forth in Schedule A. Notices to the 

Company and the Bank shall be directed to it at 292 West Main Avenue, Gastonia, N.C. 28052, 

attention of Don J. Harrison, President and Chief Executive Officer, facsimile number (704) 874-

0093, email address don.harrison@alliancebankandtrust.com, with a copy to Wyrick Robbins 

Yates & Ponton LLP, 4101 Lake Boone Trail, Suite 300, Raleigh, N.C. 27607, Attention: Todd 

H. Eveson, facsimile number (919) 781-4865, email address: teveson@wyrick.com. Notices to 

the Selling Shareholder shall be directed to it at 1500 Pennsylvania Avenue, N.W., Washington, 

D.C. 20220, Attention: Chief Counsel, Office of Financial Stability, facsimile number 

(202) 927-9225.

SECTION 12. No Advisory or Fiduciary Relationship. Each of the Company and the 

Bank acknowledges and agrees that (a) the transaction contemplated by this Agreement is an 

arm's-length commercial transaction between the Company and the Bank, on the one hand, and 

the Placement Agents, on the other hand, (b) in connection with the offering of the Securities and 

the process leading thereto, neither Placement Agent is or has been acting as a principal, agent or 

fiduciary of the Company or any of its subsidiaries or any of their respective stockholders, 

creditors or employees or any other party, (c) neither Placement Agent has assumed or will 

assume an advisory or fiduciary responsibility in favor of the Company or any of its subsidiaries, 

including the Bank, with respect to the offering of the Securities or the process leading thereto 

(irrespective of whether such Placement Agent has advised or is currently advising the Company 

or any of its subsidiaries, including the Bank, on other matters) or any other obligation to the 

Company or any of its subsidiaries, including the Bank, with respect to the offering of the 

Securities, (d) the Placement Agents and their respective Affiliates may be engaged in a broad 

range of transactions that involve interests that differ from those of the Company and the Bank, 
18

and (e) the Placement Agents have not provided any legal, accounting, financial, regulatory or 

tax advice with respect to the offering of the Securities and each of the Company and the Bank 

has consulted its own respective legal, accounting, financial, regulatory and tax advisors to the 

extent it deemed appropriate. 

SECTION 13. Parties. This Agreement shall inure to the benefit of and be binding upon 

the Placement Agents, the Company, the Bank, the Selling Shareholder, the Financial Agent and 

the Winning Bidder(s) and their respective successors. Nothing expressed or mentioned in this 

Agreement is intended or shall be construed to give any person, firm or corporation, other than 

the Placement Agents, the Company, the Bank, the Selling Shareholder, the Financial Agent and 

the Winning Bidder(s) and the successors and the controlling persons, Affiliates, selling agents, 

officers and directors referred to in Sections 7 and 8 and their heirs and legal representatives, any 

legal or equitable right, remedy or claim under or in respect of this Agreement or any provision 

herein contained. This Agreement and all conditions and provisions hereof are intended to be for 

the sole and exclusive benefit of the Placement Agents, the Company, the Bank, the Selling 

Shareholder, the Financial Agent and the Winning Bidder(s) and such successors, controlling 

persons, Affiliates, selling agents, officers and directors, heirs and legal representatives, and for 

the benefit of no other person, firm or corporation. No purchaser of Securities shall be deemed 

to be a successor by reason merely of such purchase. The Placement Agents, the Company, the 

Bank, the Selling Shareholder and the Winning Bidder(s) agree that the Financial Agent shall be 

an express third party beneficiary of this Agreement, and entitled to enforce any rights granted to 

the Financial Agent hereunder as if it were a party hereto.

SECTION 14. Trial by Jury. Each of the parties hereto other than the Selling 

Shareholder (on its behalf and, to the extent permitted by applicable law, on behalf of its 

stockholders and affiliates) hereby irrevocably waives, to the fullest extent permitted by 

applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating 

to this Agreement or the transactions contemplated hereby.

SECTION 15. GOVERNING LAW. THIS AGREEMENT AND ANY CLAIM, 

CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT 

SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS 

OF, THE STATE OF NEW YORK WITHOUT REGARD TO ITS CHOICE OF LAW 

PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW 

OF NEW YORK), PROVIDED THAT ALL RIGHTS AND OBLIGATIONS OF THE 

SELLING SHAREHOLDER UNDER THIS AGREEMENT SHALL BE GOVERNED BY, 

AND CONSTRUED IN ACCORDANCE WITH, THE FEDERAL LAWS OF THE UNITED 

STATES OF AMERICA.

SECTION 16. Consent to Jurisdiction. Each of the parties hereto other than the Selling 

Shareholder agrees that any legal suit, action or proceeding arising out of or based upon this 

Agreement or the transactions contemplated hereby ("Related Proceedings") shall be instituted in 

(i) the federal courts of the United States of America located in the City and County of New 

York, Borough of Manhattan or (ii) the courts of the State of New York located in the City and 
19

County of New York, Borough of Manhattan (collectively, the "Specified Courts"), and 

irrevocably submits to the exclusive jurisdiction (except for proceedings instituted in regard to 

the enforcement of a judgment of any Specified Court (a "Related Judgment"), as to which such 

jurisdiction is non-exclusive) of the Specified Courts in any such suit, action or proceeding. 

Service of any process, summons, notice or document by mail to such party's address set forth 

above shall be effective service of process for any suit, action or proceeding brought in any 

Specified Court. Each of the parties hereto irrevocably and unconditionally waives any objection 

to the laying of venue of any suit, action or proceeding in the Specified Courts and irrevocably 

and unconditionally waive and agree not to plead or claim in any Specified Court that any such 

suit, action or proceeding brought in any Specified Court has been brought in an inconvenient 

forum.

SECTION 17. Counterparts. This Agreement may be executed in any number of 

counterparts, each of which shall be deemed to be an original, but all such counterparts shall 

together constitute one and the same Agreement.

SECTION 18. Effect of Headings. The Section headings herein are for convenience only 

and shall not affect the construction hereof.

[Signature Page Follows]



[Signature Page to AB&T Financial Corporation Placement Agency Agreement]

CONFIRMED AND ACCEPTED,

as of the date first above written:

as Placement Agent

By:

the sole general partner

By:

Name:

Title:

STIFEL, NICOLAUS & COMPANY, INCORPORATED,

By

Authorized Signatory
Sch. A-1

SCHEDULE A

Placement Agents

Sandler O’Neill & Partners, L.P.

1251 Avenue of the Americas, 6th Floor

New York, New York 10020

Attn: General Counsel

Stifel, Nicolaus & Company, Incorporated

237 Park Ave, 8th Floor

New York, New York 10017

Attn: Ben Plotkin, with a copy to Capital Markets Legal
Sch. B-1

SCHEDULE B

Form of Bidder Letter

(See Attached)
Sch. C-2

SCHEDULE C

Disclosure Schedules

Section 1(a)(iv) – Good Standing of the Company

The board of directors and the shareholders of the Company approved an amendment to 

the Company’s Articles of Incorporation to increase the number of shares of common stock 

which the Company has the authority to issue from 10,000,000 to 35,000,000. The amendment 

became effective upon filing with the North Carolina Department of the Secretary of State on 

December 31, 2013. 

Section 1(a)(vi) – Regulatory Matters

Effective February 1, 2012, the Bank stipulated to the issuance of a Consent Order (the 

“Order”) issued by the Federal Deposit Insurance Corporation (“FDIC”) and the North Carolina 

Commissioner of Banks (the “Commissioner”). A copy of the Order is publicly available and 

was filed with the U.S. Securities and Exchange Commission on February 7, 2012, as Exhibit 

10.2 to the Company’s current report on Form 8-K. Among other things, the Order (i) prohibits 

the Bank from declaring or paying dividends or bonuses or making any other form of payment 

outside the ordinary course of business resulting in a reduction of capital without the prior 

written approval of the FDIC and the Commissioner and (ii) requires the Bank to maintain a 

Leverage Capital Ratio of at least 8% and a Total Risk-Based Capital Ratio of at least 11%. The 

Bank is not currently in compliance with the capital requirements of the Order.

Effective May 7, 2012, the Company entered into a written agreement with the Federal 

Reserve Bank of Richmond (the “Reserve Bank”) (the final written agreement, as executed by 

the parties, is herein called the “Written Agreement”). A copy of the Written Agreement is 

publicly available and was filed with the U.S. Securities and Exchange Commission on May 11, 

2012, as Exhibit 10.1 to the Company’s current report on Form 8-K. Among other things, the 

Written Agreement provides that the Company (i) shall not declare or pay any dividends without 

the prior written approval of the Reserve Bank and the Director of the Division of Banking 

Supervision and Regulation of the Board of Governors of the Federal Reserve System and (ii) 

shall not directly or indirectly take dividends or any other form of payment representing a 

reduction in capital from the Bank without the prior written approval of the Reserve Bank. In 

addition, the Written Agreement requires the Company’s board of directors to take steps to 

ensure that the Bank complies with the Consent Order. 

The Bank is currently unable to comply with the Consent Order’s requirement that the 

Bank maintain a Leverage Capital Ratio of at least 8% and a Total Risk-Based Capital Ratio of 

at least 11%. Therefore, the Bank could be subject to various remedies including, among others, 

the power to enjoin “unsafe or unsound” practices, to require affirmative action to correct any 

conditions resulting from any violation or practice, to direct an increase in capital, to further 

restrict growth, to remove officers and/or directors, and to assess civil money penalties. 

Noncompliance with the terms of the Consent Order could also result in noncompliance with the 
Sch. C-3

Written Agreement’s requirement that the Company’s board of directors ensure that the Bank 

complies with the Consent Order. Management has been taking action and implementing 

programs to comply with the Consent Order and the Written Agreement, including an ongoing 

assessment of options for increasing capital. Compliance with the terms of the Consent Order 

will be determined by the FDIC and the Commissioner; compliance with the terms of the Written 

Agreement will be determined by the Reserve Bank. Any of these regulators may determine in 

their sole discretion that the issues raised by the Consent Order and the Written Agreement have 

not been addressed satisfactorily, or that any current or past actions, violations, or deficiencies 

could be the subject of further regulatory enforcement actions. Such enforcement actions could 

involve penalties and further limitations on the business of the Company and the Bank and could 

negatively affect their financial condition, results of operations, earnings, business prospects, and 

ability to implement their business plan, as well as the value of their capital stock. 

Prior to the Consent Order and the Written Agreement, the Bank was party to a 

Memorandum of Understanding with the Federal Deposit Insurance Corporation.

Section 1(a)(vii) – Capitalization

As disclosed under Section 1(a)(iv) of this Schedule C, the Company filed an amendment 

to its Articles of Incorporation effective December 31, 2013. This amendment increased the 

number of shares of common stock which the Company has the authority to issue from 

10,000,000 to 35,000,000. 

Section 1(a)(x) – Absence of Violations, Defaults and Conflicts

As disclosed under Section 1(a)(vi) of this Schedule C, the Bank is not currently in 

compliance with the capital requirements of the Consent Order issued by the Federal Deposit 

Insurance Corporation and the North Carolina Office of the Commissioner of Banks. 

As of the date of this Agreement, the Company has failed to declare and pay the 

following scheduled dividend payments on the Securities: May 15, 2011; August 15, 2011; 

November 15, 2011; February 15, 2012; May 15, 2012; August 15, 2012; November 15, 2012; 

February 15, 2013; May 15, 2013; August 15, 2013; and November 15, 2013. See Section 

1(a)(xix) of this Schedule C for additional information.

Section 1(a)(xix) – Dividend Payments

As disclosed under Section 1(a)(vi) of this Schedule C, the Company is party to a Written 

Agreement with the Federal Reserve Bank of Richmond, which provides that the Company shall

not declare or pay any dividends without the prior written approval of the Federal Reserve Bank 

of Richmond and the Director of the Division of Banking Supervision and Regulation of the 

Board of Governors of the Federal Reserve System. 

Also as disclosed under Section 1(a)(vi) of this Schedule C, the Bank is subject to a 

Consent Order issued by the Federal Deposit Insurance Corporation and the North Carolina 

Office of the Commissioner of Banks. The consent order prohibits the Bank from declaring or 

paying dividends without the prior written approval of the FDIC and the Commissioner.
Sch. C-4

As of the date of this Agreement, the Company has failed to declare and pay the 

following scheduled dividend payments on the Securities: May 15, 2011; August 15, 2011; 

November 15, 2011; February 15, 2012; May 15, 2012; August 15, 2012; November 15, 2012; 

February 15, 2013; May 15, 2013; August 15, 2013; and November 15, 2013.

For the foreseeable future after the date of this Agreement, the Company does not intend 

to declare and pay, or seek any and all regulatory or other approvals necessary to declare and pay, 

each scheduled dividend payment on the Securities. As a result of the Written Agreement 

described in Section 1(a)(vi) of this Schedule C, the Company must obtain the written approval 

of the Reserve Bank and the Director of the Division of Banking Supervision and Regulation of 

the Board of Governors in order to declare and pay dividends on the Securities. Under the terms 

of the Written Agreement, the Company must take steps to ensure that the Bank complies with 

its Consent Order issued by the FDIC and the Commissioner. The Bank is not currently in 

compliance with the capital requirements of the Consent Order. The Company believes the 

Reserve Bank is unlikely to approve a request to pay dividends on the Securities in light of the 

Bank’s noncompliance with the capital requirements of the Consent Order. The submission of 

such a request would cause the Company to incur costs both in terms of management time and 

outside legal review. Since approval is unlikely, the Company believes its resources are better 

spent continuing to address the issues underlying the Written Agreement.

As a result of the Written Agreement described in Section 1(a)(vi) of this Schedule C, the

Company must obtain the written approval of the Reserve Bank and the Director of the Division 

of Banking Supervision and Regulation of the Board of Governors in order to declare and pay 

dividends on the Securities. Written approval must also be obtained prior to the Company, 

directly or indirectly, taking dividends or any other form of payment representing a reduction in 

capital from the Bank. Since such requirements have been in effect, the Company has not sought 

such approval. In May 2011, the Company, through its outside legal counsel, had an informal 

discussion with the supervision staff of the Reserve Bank regarding a possible application to pay 

dividends on the Securities. The staff indicated that, as a result of the financial condition of the 

Bank, a formal application to pay dividends would likely not be approved. Given this indication 

from the Reserve Bank and the Company’s entry into the Written Agreement in May 2012, the 

Company has elected not to expend further time and resources on a formal application. 

As of the date of this Agreement the Company is, and for the foreseeable future after the 

date of this Agreement expects to be, dependent on cash dividends from the Bank in order to pay 

scheduled dividend payments on the Securities.

As a result of the Order described in Section 1(a)(vi) of this Schedule C, the Bank must 

obtain the written approval of the FDIC and the Commissioner in order to declare and pay cash 

dividends to the Company. Since such requirements have been in effect, the Bank has not sought 

such approval. As described above, the Company was discouraged from filing a formal 

application to pay dividends on the Securities with the Reserve Bank in May 2011. Since the 

Company elected not to pursue approval, a similar determination was made as to the Bank. In 

February 2012, the Bank became subject to the Consent Order. Since that time, the Bank has not 

been in compliance with the Consent Order’s capital requirements. The Bank believes it is 

unlikely to receive approval to pay dividends during any period of noncompliance with the 

Consent Order and has therefore elected not to seek such approval. 
Sch. C-5

For the foreseeable future after the date of this Agreement, the Bank does not intend to 

seek any and all regulatory approvals necessary to pay cash dividends to the Company required 

for the Company to make scheduled dividend payments on the Securities. As noted above, the 

Bank is not currently in compliance with the capital requirements of the Consent Order issued by 

the FDIC and the Commissioner. The Bank believes the FDIC and the Commissioner are 

unlikely to approve a request to pay cash dividends to the Company in light of the Bank’s 

noncompliance with the capital requirements of the Consent Order. The submission of such a 

request would cause the Bank to incur costs both in terms of management time and outside legal 

review. Since approval is unlikely, the Bank believes its resources are better spent continuing to 

address the issues underlying the Consent Order.

The terms of the Securities provide that if dividends on the Securities are not paid for six 

quarters, whether or not consecutive, the holders of the Securities have the right to vote to 

appoint two members to the board of directors of the Company. Also, the special voting rights 

associated with the Securities allow the holders to vote as a class for directors separate from the 

owners of the common and other voting securities. Therefore, the Securities may be considered 

"voting securities" for purposes of the Bank Holding Company Act of 1956, as amended, and the 

Change in Bank Control Act.
Sch. C-6

Section 1(b)(i) – Issuer Bidding

Not applicable.
Sch. C-7

Section 1(b)(i) – Director and Officer Bidding

Not applicable.
Sch. C-8

Section 1(b)(ii) – Issuer Redemption or Repurchase

The Company may redeem the Securities, at any time, in whole or in part, at its option, 

subject to prior approval by the appropriate federal banking agency, for cash, for a redemption 

price equal to 100% of the liquidation preference amount per share of the Securities plus any 

accrued and unpaid dividends to but excluding the date of redemption.

As disclosed under Section 1(a)(vi) of this Schedule C, the Company is party to a Written 

Agreement with the Federal Reserve Bank of Richmond. Under the terms of the Written 

Agreement, the Company may not, directly or indirectly, purchase or redeem any shares of its 

stock without the prior written approval of the Federal Reserve Bank of Richmond. 

The Company's ability to redeem the Securities will depend on then-present facts and 

circumstances and the amount of capital it holds or can raise at the holding company level. In 

order for the Company to obtain approval from its applicable regulatory authorities to redeem the 

Securities, it would expect that such regulatory authorities would require the Company to satisfy 

its capital commitments to them, if any, after giving effect to the redemption of the Securities so 

approved.

The Company has not applied for regulatory approval and has no present intention to 

redeem, repurchase or exchange the Securities within the 12 months following the date of this 

Agreement.
Exh. A-1

Exhibit A

FORM OF OPINION OF COMPANY'S COUNSEL

TO BE DELIVERED PURSUANT TO SECTION 6(b)

(i) The Company has been duly incorporated and is validly existing as a corporation 

in good standing under the laws of the State of North Carolina.

(ii) The Company has corporate power and authority to enter into and perform its 

obligations under, and to consummate the transactions contemplated under, the Operative 

Documents.

(iii) The Securities have been duly authorized and validly issued and are fully paid and 

non-assessable and none of the Securities were issued in violation of the preemptive or other 

similar rights of any securityholder of the Company or any other entity.

(iv) The Placement Agency Agreement has been duly authorized, executed and

delivered by each of the Company and the Bank.

(v) The Articles of Amendment for the Securities have been duly filed with the 

Secretary of State of the State of North Carolina. The form of certificate representing the 

Securities complies in all material respects with the requirements of North Carolina state law, the 

Charter and the By-Laws.

(vi) Assuming the accuracy of the representations, warranties and covenants of the 

Winning Bidder(s) set forth in Section 1 of the Bidder Letter(s), respectively, no filing with, or 

authorization, approval, consent, license, order, registration, qualification or decree of, any 

Governmental Entity is necessary or required for the Company or the Bank to enter into, or 

perform their respective obligations under, the Operative Documents or the consummation of the 

transactions contemplated in the Placement Agency Agreement, except such as have been 

already obtained.

(vii) The execution, delivery and performance of the Operative Documents and the 

consummation of the transactions contemplated in the Placement Agency Agreement and 

compliance by the Company and the Bank with their respective obligations under the Operative

Documents do not and will not result in any violation of the provisions of the Charter, By-Laws 

or similar organizational documents of the Company or the Bank or any applicable law, statute, 

rule, regulation, judgment, order, writ or decree, known to such counsel, of any Governmental 

Entity.
Exh. A-2

(viii) Assuming the accuracy of the representations, warranties and covenants of the 

Winning Bidder(s) set forth in Section 1 of the Bidder Letter(s), it is not necessary in connection 

with the offer, sale and delivery of the Securities, by the Selling Shareholder through the 

Placement Agents to the Winning Bidder(s) in accordance with the Placement Agency 

Agreement and the Bidder Letter(s) to register the Securities under the 1933 Act. 

Such opinion shall not state that it is to be governed or qualified by, or that it is otherwise 

subject to, any treatise, written policy or other document relating to legal opinions, including, 

without limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991).
Exh. B-1

Exhibit B

FORM OF OFFICERS' CERTIFICATE TO BE DELIVERED PURSUANT TO SECTION 6(c)

(See Attached)
AB&T FINANCIAL CORPORATION

[ ], 2013

The undersigned, Don J. Harrison, President and Chief Executive Officer of AB&T 

Financial Corporation (the “Company”), and Roger A. Mobley, Executive Vice President and 

Chief Financial Officer of the Company, each hereby certifies, pursuant to Section 6(b) of the 

Placement Agency Agreement, dated [January 27, 2014], among (i) the Company, (ii) Alliance 

Bank & Trust Company, (iii) the United States Department of the Treasury and (iv) Sandler 

O'Neill & Partners, L.P. and Stifel, Nicolaus & Company, Incorporated (the "Placement Agency

Agreement") that: 

(i) There has been no Material Adverse Change since both the date of the Placement Agency 

Agreement and since the date of the latest audited balance sheet included in the last 

financial statements of the Company filed with the applicable regulator. 

(ii) The representations and warranties of the Company in the Placement Agency Agreement 

are true and correct with the same force and effect as though expressly made at and as of 

the Closing Time. 

(iii) The Company has complied with all agreements and satisfied all conditions on its part to 

be performed or satisfied pursuant to the Placement Agency Agreement at or prior to the 

Closing Time. 

Capitalized terms used herein shall have the same meanings ascribed to them in the 

Placement Agency Agreement. 

IN WITNESS WHEREOF, we have hereunto signed our names as of the date first 

written above.

[Signature Page Follows]
AB&T FINANCIAL CORPORATION

By: _____________________________________

Don J. Harrison

President and Chief Executive Officer

By:

Roger A. Mobley

Executive Vice President and Chief Financial Officer