Exhibit 10.1


 


SUBORDINATED NOTE PURCHASE AGREEMENT


This SUBORDINATED NOTE PURCHASE AGREEMENT
(this “Agreement”) is dated as of October 14, 2020, and is made by and among The Community Financial Corporation,
a Maryland corporation (the “Company”), and the several purchasers of the Subordinated Notes (as defined herein)
identified on the signature pages hereto (each a “Purchaser” and collectively, the “Purchasers”).


RECITALS


WHEREAS, the Company has requested
that the Purchasers purchase from the Company up to $20 million in aggregate principal amount of Subordinated Notes, which aggregate
amount is intended to qualify as Tier 2 Capital (as defined herein).


WHEREAS, the Company has engaged Piper
Sandler & Co., as its exclusive placement agent (“Placement Agent”) for the offering of the Subordinated
Notes.


WHEREAS, each of the Purchasers is
an institutional “accredited investor” as such term is defined in Rule 501 of Regulation D (“Regulation D”)
promulgated under the Securities Act of 1933, as amended (the “Securities Act”) or a QIB (as defined below).


WHEREAS, the offer and sale of the
Subordinated Notes by the Company is being made in reliance upon the exemptions from registration available under Section 4(a)(2)
of the Securities Act and Rule 506(b) of Regulation D promulgated under the Securities Act.


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


WHEREAS, at Closing, the Company and
the Purchasers shall execute and deliver a Registration Rights Agreement, substantially in the form attached hereto as Exhibit
C (the “Registration Rights Agreement”), pursuant to which, among other things, the Company will agree to
provide certain registration rights with respect to the Securities under the Securities Act and the rules and regulations promulgated
thereunder and applicable state securities laws.


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


AGREEMENT


1.                  
DEFINITIONS.


1.1              
Defined Terms. The following capitalized
terms used in this Agreement and in the Subordinated Notes have the meanings defined or referenced below. Certain other capitalized
terms used only in specific sections of this Agreement may be defined in such sections. Terms used herein and not defined below
shall have the meaning set forth in the Indenture.


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






     


     


    

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


“Bank” means Community
Bank of the Chesapeake, a Maryland chartered bank, and wholly owned subsidiary of the Company.


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


“Bylaws” means the Bylaws
of the Company, as in effect on the Closing Date.


“Charter” means the Certificate
of Incorporation of the Company, as in effect on the Closing Date.


“Closing” has the meaning
set forth in Section 2.5.


“Closing Date” means October
14, 2020.


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


“Company Covered Person”
has the meaning set forth in Section 4.2.4.


“Company’s Reports”
means (i) the Company's Annual Report on Form 10-K for the year ended December 31, 2019 as filed with the SEC, including the audited
financial statements contained therein; (ii) the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, as
filed with the SEC, including the unaudited financial statements contained therein, and (iii) the Company’s reports for the
year ended December 31, 2019 and the period ended June 30, 2020, as filed with the FRB as required by regulations of the FRB.


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


“Disqualification Event”
has the meaning set forth in Section 4.2.4.


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


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


“Event of Default” has
the meaning set forth in the Subordinated Notes.


“Exchange Act” means the
Securities Exchange Act of 1934, as amended.


“FDIC” means the Federal
Deposit Insurance Corporation.


“FRB” means the Board
of Governors of the Federal Reserve System.


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






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“Governmental Agency(ies)”
means, individually or collectively, any arbitrator, court, federal, state, county or local governmental department, commission,
board, regulatory authority or administrative agency (including, without limitation, each applicable Regulatory Agency) with jurisdiction
over the Company or a Subsidiary or any of their respective properties, assets or operations.


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


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


“Hazardous Materials Laws”
mean any laws, regulations, permits, licenses or requirements pertaining to the protection, preservation, conservation or regulation
of the environment which relates to real property, including: the Clean Air Act, as amended, 42 U.S.C. Section 7401 et seq.; the
Federal Water Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq.; the Resource Conservation and Recovery Act of
1976, as amended, 42 U.S.C. Section 6901 et seq.; the Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended (including the Superfund Amendments and Reauthorization Act of 1986), 42 U.S.C. Section 9601 et seq.; the Toxic Substances
Control Act, as amended, 15 U.S.C. Section 2601 et seq.; the Occupational Safety and Health Act, as amended, 29 U.S.C. Section
651, the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety and Health
Act of 1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq.; and all comparable
state and local laws, laws of other jurisdictions or orders and regulations.


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


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


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


“Material Adverse Effect”
means, with respect to any Person, any change or effect that (i) is or would be reasonably likely to be material and adverse to
the financial condition, results of operations or business of such Person, and its Affiliates, taken as a whole, or (ii) would
materially impair the ability of such Person to perform its respective obligations under any of the Transaction Documents, or otherwise
materially impede the consummation of the transactions contemplated hereby; provided, however, that “Material
Adverse Effect” shall not be deemed to include the impact of (1) changes in banking and similar laws, rules or regulations
of general applicability or interpretations thereof by Governmental Agencies that do not disproportionately affect the operations
or business of the Company or the Bank in comparison to other banking institutions with similar operations, (2) changes in GAAP
or regulatory accounting requirements applicable to financial institutions and their holding companies generally, (3) changes in
general economic or capital market conditions affecting financial institutions or their market prices generally and not specifically
related to the Company, the Bank or the Purchasers, (4) the effects of the COVID-19 pandemic that do not disproportionately affect
the operations or business of the Company or the Bank in comparison to other banking institutions with similar operations, (5)
direct effects of compliance with this Agreement on the operating performance of the Company, the Bank or the Purchasers, including
expenses incurred by the Company, the Bank or the Purchasers in consummating the transactions contemplated by this Agreement, and
(6) the effects of any action or omission taken by the Company with the prior written consent of the Purchasers, and vice versa,
or as otherwise contemplated by this Agreement and the Subordinated Notes.






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“Maturity Date” means
October 15, 2030.


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


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


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


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


“QIB” means a Qualified
Institutional Buyer, as defined in Rule 144A under the Securities Act.


“Registration Rights Agreement”
has the meaning set forth in the Recitals.


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


“Regulatory Agency” means
any federal or state agency charged with the supervision or regulation of depository institutions or holding companies of depository
institutions, or engaged in the insurance of depository 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, the Bank or any of their
Subsidiaries.


“Secondary Market Transaction”
has the meaning set forth in Section 5.5.


"SEC" means the Securities
and Exchange Commission.


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


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


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






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


“Tier 2 Capital” has the
meaning given to the term “Tier 2 capital” in 12 C.F.R. Part 217, as amended, modified and supplemented and in effect
from time to time or any replacement thereof.


“Tier 2 Capital Event”
has the meaning set forth in the Indenture.


“Transaction Documents”
has the meaning set forth in Section 3.2.1.1.


“Trustee” means the trustee
or successor in accordance with the applicable provisions of the Indenture.


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


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


2.                  
SUBORDINATED DEBT.


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


2.2              
Subordination. The Subordinated Notes shall be subordinated in accordance with the subordination provisions
set forth therein.


2.3              
Maturity Date. On the Maturity Date, all sums due and owing under this Agreement and the Subordinated
Notes shall be repaid in full. The Company acknowledges and agrees that the Purchasers have not made any commitments, either express
or implied, to extend the terms of the Subordinated Notes past their Maturity Date, and shall not extend such terms beyond the
Maturity Date unless the Company and the Purchasers hereafter specifically otherwise agree in writing.


2.4              
Unsecured Obligations. The obligations of the Company to the Purchasers under the Subordinated Notes shall
be unsecured.






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2.5              
The Closing. The execution and delivery of the Transaction Documents (the “Closing”) shall
occur on the Closing Date at such place or time or on such other date as the parties hereto may agree.


2.6              
Payments. The Company agrees that matters concerning payments and application of payments shall be as
set forth in this Agreement, the Indenture and the Subordinated Notes.


2.7              
No Right of Offset. Each Purchaser hereby expressly waives any right of offset it may have against the
Company or any of its Subsidiaries.


2.8              
Use of Proceeds. The Company shall use the net proceeds from the sale of Subordinated Notes for general
corporate purposes, to support the Bank's regulatory capital ratios, and potential common stock share repurchases.


3.                  
DISBURSEMENT.


3.1              
Disbursement. On the Closing Date, assuming all of the terms and conditions set forth in Section 3.2
have been satisfied by the Company and the Company has executed and delivered to each of the Purchasers this Agreement and any
other related documents required by Section 3.2 in form and substance reasonably satisfactory to the Purchasers, each Purchaser
shall disburse in immediately available funds the Subordinated Note Amount set forth on each Purchaser’s respective signature
page hereto to the Company in exchange for an electronic securities entitlement to be credited to the Purchaser's account (or the
account of the Purchaser's securities intermediary) through the facilities of the Depository Trust Company (“DTC”)
with a principal amount equal to such Subordinated Note Amount (the “Disbursement”). The Company will deliver
to the Trustee a global certificate (the “Global Note”) representing the Subordinated Notes, registered in the
name of “Cede & Co.” as nominee for DTC.


3.2              
Conditions Precedent to Disbursement.


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


3.2.1.1         
Transaction Documents. This Agreement and the Indenture, the Global Note and the Registration Rights Agreement
(collectively, the “Transaction Documents”), each duly authorized and executed by the Company, and delivery
of written instructions to the Trustee (with respect to the Indenture).


3.2.1.2         
Authority Documents.


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


(b)                     
A certificate of existence of the Company issued by the Secretary of State of the State of Maryland.


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






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


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


(f)                      
The opinion of Kilpatrick Townsend & Stockton LLP, counsel to the Company, dated as of the Closing Date, substantially
in the form set forth at Exhibit B attached hereto addressed to the Purchasers and Placement Agent.


3.2.1.3         
Other Documents. Such other certificates, affidavits, schedules, resolutions, notes and/or other documents
which are provided for hereunder or as a Purchaser may reasonably request.


3.2.1.4         
Aggregate Investments. Prior to, or contemporaneously with the Closing, each Purchaser shall have actually
subscribed for the Subordinated Note Amount set forth on such Purchaser’s signature page.


3.2.2               
Conditions to the Company’s Obligation. With respect to a given Purchaser, the obligation of the
Company to consummate the sale of the Subordinated Notes and to effect the Closing is subject to delivery by or at the direction
of such Purchaser to the Company of this Agreement, duly authorized and executed by such Purchaser.


4.                  
REPRESENTATIONS AND WARRANTIES OF COMPANY.


The Company hereby represents and warrants
to each Purchaser as follows:


4.1              
Organization and Authority.


4.1.1               
Organization Matters of the Company and Its Subsidiaries.


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


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






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4.1.1.3         
The deposit accounts of the Bank are insured by the FDIC up to applicable limits. The Bank has not received any notice
or other information indicating that the Bank is not an “insured depository institution” as defined in 12 U.S.C. Section
1813, nor has any event occurred which could reasonably be expected to adversely affect the status of the Bank as an FDIC-insured
institution.


4.1.2               
Capital Stock and Related Matters. The Charter of the Company authorizes the Company to issue 15,000,000
shares of common stock. As of the date of this Agreement, there are 5,941,832 shares of the Company’s common stock issued
and outstanding. All of the outstanding capital stock of the Company has been duly authorized and validly issued and is fully paid
and non-assessable. There are, as of the date hereof, no outstanding options, rights, warrants or other agreements or instruments
obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of the capital stock
of the Company or obligating the Company to grant, extend or enter into any such agreement or commitment to any Person other than
the Company except pursuant to the Company’s equity incentive plans duly adopted by the Company’s Board of Directors.


4.2              
No Impediment to Transactions.


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


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


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






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4.2.4               
Exemption from Registration. Neither the Company, nor any of its Subsidiaries or Affiliates, nor any Person
acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation
D) in connection with the offer or sale of the Subordinated Notes. Assuming the accuracy of the representations and warranties
of each Purchaser set forth in this Agreement, the Subordinated Notes will be issued in a transaction exempt from the registration
requirements of the Securities Act. No “bad actor” disqualifying event described in Rule 506(d)(1)(i)-(viii) of the
Securities Act (a “Disqualification Event”) is applicable to the Company or, to the Company’s knowledge,
any Person described in Rule 506(d)(1) (each, a “Company Covered Person”). The Company has exercised reasonable
care to determine whether any Company Covered Person is subject to a Disqualification Event. The Company has complied, to the extent
applicable, with its disclosure obligations under Rule 506(e).


4.2.5               
No Defaults or Restrictions. Neither the execution and delivery of the Transaction Documents by the Company
nor compliance by the Company with their respective terms and conditions will (whether with or without the giving of notice or
lapse of time or both) (i) violate, conflict with or result in a breach of, or constitute a default under: (1) the Charter or Bylaws
of the Company; (2) any of the terms, obligations, covenants, conditions or provisions of any corporate restriction or of any contract,
agreement, indenture, note, mortgage, deed of trust, pledge, bank loan or credit agreement, or any other agreement or instrument
to which the Company or Bank, as applicable, is now a party or by which it or any of its properties may be bound or affected; (3)
any judgment, order, writ, injunction, decree or demand of any court, arbitrator, grand jury, or Governmental Agency applicable
to the Company or the Bank; or (4) any statute, rule or regulation applicable to the Company, except, in the case of items (2),
(3) or (4), for such violations, conflicts, breaches or defaults that would not reasonably be expected to have, singularly or in
the aggregate, a Material Adverse Effect on the Company and its Subsidiaries taken as a whole, or (ii) result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any property or asset of the Company. Neither the Company
nor the Bank is in default in the performance, observance or fulfillment of any of the terms, obligations, covenants, conditions
or provisions contained in any indenture, note or other agreement or instrument creating, evidencing or securing Indebtedness of
any kind or pursuant to which any such Indebtedness is issued, or any other agreement or instrument to which the Company or the
Bank, as applicable, is a party or by which the Company or the Bank, as applicable, or any of its properties may be bound or affected,
except, in each case, only such defaults that would not reasonably be expected to have, singularly or in the aggregate, a Material
Adverse Effect on the Company and its Subsidiaries taken as a whole.


4.2.6               
Governmental Consent. No governmental orders, permissions, consents, approvals or authorizations are required
to be obtained by the Company that have not been obtained, and no registrations or declarations are required to be filed by the
Company that have not been filed in connection with, or, in contemplation of, the execution and delivery of, and performance under,
the Transaction Documents, except for applicable requirements, if any, of the Securities Act, the Exchange Act or state securities
laws or “blue sky” laws of the various states and any applicable federal or state banking laws and regulations.


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






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4.4              
Financial Condition.


4.4.1               
Company Financial Statements. The financial statements of the Company included in the Company’s
Reports (including the related notes, where applicable), which have been made available to the Purchasers (i) have been prepared
from, and are in accordance with, the books and records of the Company; (ii) fairly present in all material respects the results
of operations, cash flows, changes in stockholders’ equity and financial position of the Company and its consolidated Subsidiaries,
for the respective fiscal periods or as of the respective dates therein set forth (subject in the case of unaudited statements
to recurring year-end audit adjustments normal in nature and amount), as applicable; (iii) complied as to form, as of their respective
dates of filing in all material respects with applicable accounting and banking requirements as applicable, with respect thereto;
and (iv) have been prepared in accordance with GAAP consistently applied during the periods involved, except, in each case, (x)
as indicated in such statements or in the notes thereto, (y) for any statement therein or omission therefrom that was corrected,
amended, or supplemented or otherwise disclosed or updated in a subsequent Company’s Report, and (z) to the extent that any
unaudited interim financial statements do not contain the footnotes required by GAAP, and were or are subject to normal and recurring
year-end adjustments, which were not or are not expected to be material in amount, either individually or in the aggregate. The
books and records of the Company have been, and are being, maintained in all material respects in accordance with GAAP and any
other applicable legal and accounting requirements. The Company does not have any material liability of any nature whatsoever (whether
absolute, accrued, contingent or otherwise and whether due or to become due), except for those liabilities that are reflected or
reserved against on the consolidated balance sheet of the Company contained in the Company’s Reports for the Company’s
most recently completed quarterly or annual fiscal period, as applicable, and for liabilities incurred in the ordinary course of
business consistent with past practice or in connection with this Agreement and the transactions contemplated hereby.


4.4.2               
Absence of Default. Since December 31, 2019, no event has occurred which either of itself or with the
lapse of time or the giving of notice or both, would give any creditor of the Company the right to accelerate the maturity of any
material Indebtedness of the Company. The Company is not in default under any Lease, agreement or instrument, or any law, rule,
regulation, order, writ, injunction, decree, determination or award, non-compliance with which could reasonably be expected to
result in a Material Adverse Effect on the Company and its Subsidiaries taken as a whole.


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


4.4.4               
Ownership of Property. The Company and each of its Subsidiaries has good and marketable title as to all
real property owned by it and good title to all assets and properties owned by the Company and such Subsidiary in the conduct of
its businesses, whether such assets and properties are real or personal, tangible or intangible, including assets and property
reflected in the most recent balance sheet contained in the Company’s Reports or acquired subsequent thereto (except to the
extent that such 



    	 	10	 



     


    

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


4.5              
No Material Adverse Change. Since December 31, 2019, there has been no development or event which has
had or could reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries taken as a whole.


4.6              
Legal Matters.


4.6.1               
Compliance with Law. The Company and each of its Subsidiaries (i) has complied with and (ii) is not under
investigation with respect to, and, to the Company’s knowledge, has not been threatened to be charged with or given any notice
of any material violation of any applicable statutes, rules, regulations, orders and restrictions of any domestic or foreign government,
or any instrumentality or agency thereof, having jurisdiction over the conduct of its business or the ownership of its properties,
except where any such failure to comply or violation would not reasonably be expected to have a Material Adverse Effect on the
Company and its Subsidiaries taken as a whole. The Company and each of its Subsidiaries is in compliance with, and at all times
prior to the date hereof has been in compliance with, (x) all statutes, rules, regulations, orders and restrictions of any domestic
or foreign government, or any Governmental Agency, applicable to it, and (y) its own privacy policies and written commitments to
customers, consumers and employees, concerning data protection, the privacy and security of personal data, and the nonpublic personal
information of its customers, consumers and employees, in each case except where any such failure to comply, would not result,
individually or in the aggregate, in a Material Adverse Effect. At no time during the two years prior to the date hereof has the
Company or any of its Subsidiaries received any written notice asserting any violations of any of the foregoing.


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






    	 	11	 



     


    

4.6.3               
Pending Litigation. There are no actions, suits, proceedings or written agreements pending, or, to the
Company’s knowledge, threatened or proposed, against the Company or any of its Subsidiaries at law or in equity or before
or by any Government Agency that, either separately or in the aggregate, would reasonably be expected to have a Material Adverse
Effect on the Company and any of its Subsidiaries, taken as a whole, or affect issuance or payment of the Subordinated Notes; and
neither the Company nor any of its Subsidiaries is a party to or named as subject to the provisions of any order, writ, injunction,
or decree of, or any written agreement with, any Government Agency, that either separately or in the aggregate, will have a Material
Adverse Effect on the Company and any of its Subsidiaries, taken as a whole.


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


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


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


4.7              
No Misstatement or Omission. None of the representations, warranties, covenants and agreements contained
in this Agreement or in any certificate or other document delivered to Purchaser by or on behalf of Company, Bank or any of their
Subsidiaries pursuant to or in connection with this Agreement contains any untrue statement of a material fact or omits to state
a material fact necessary to make the statements contained therein not misleading in light of the circumstances when made or furnished
to Purchaser.


4.8              
Internal Accounting Controls. The Company, the Bank and each other Subsidiary has established and maintains
a system of internal control over financial reporting that pertains to the maintenance of records that accurately and fairly reflect
the transactions and dispositions of the Company’s assets (on a consolidated basis), provides reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that the Company’s and
the Bank’s receipts and expenditures and receipts and expenditures of each of the Company’s other Subsidiaries are
being made only in accordance with authorizations of the Company management and Board of Directors, and provides reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets of the Company on a consolidated
basis that could have a Material Adverse Effect. Such internal control over financial reporting is effective to provide reasonable
assurance regarding the reliability of the Company’s financial reporting and the preparation of the Company’s financial
statements for external purposes in accordance with GAAP. Since the conclusion of the Company’s last completed fiscal year
there has not been and there currently is not (i) any significant deficiency or material weakness in the design or operation
of its internal control over financial reporting which is reasonably likely to adversely affect its ability to record, process,
summarize and report financial information, or (ii) any fraud, whether or not material, that involves management or other
employees who have a role in the Company’s or the Bank’s internal control over financial reporting. The Company (A) has
implemented and maintains disclosure controls and procedures reasonably designed and maintained to ensure that material information
relating to the Company is made known to the Chief Executive Officer and the Chief Financial Officer of the Company by others within
the Company and (B) has disclosed, based on its most recent evaluation prior to the date hereof, to the Company’s outside
auditors and the audit committee of the Company’s Board of Directors (x) any significant deficiencies and material weaknesses
in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the Company’s
internal controls over financial reporting. Such disclosure controls and procedures are effective for the purposes for which they
were established.






    	 	12	 



     


    

4.9              
Tax Matters. The Company, Bank and each Subsidiary of the Company have (i) filed all material foreign,
U.S. federal, state and local tax returns, information returns and similar reports that are required to be filed, and all such
tax returns are true, correct and complete in all material respects, and (ii) paid all material taxes required to be paid by it
and any other material assessment, fine or penalty levied against it other than taxes (x) currently payable without penalty or
interest, or (y) being contested in good faith by appropriate proceedings.


4.10          
Exempt Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth
in this Agreement, no registration under the Securities Act is required for the offer and sale of the Subordinated Notes by the
Company to the Purchasers.


4.11          
Representations and Warranties Generally. The representations and warranties of Company set forth in this
Agreement and in any certificate or other document delivered to Purchaser by or on behalf of Company, Bank or any of their Subsidiaries
pursuant to or in connection with this Agreement that do not contain a “Material Adverse Effect” qualification or other
express materiality or similar qualification are true and correct as of the date hereof and as of the Closing Date, except where
the failure of such representations and warranties to be so true and correct does not have a Material Adverse Effect; provided,
however, that any such representations and warranties made as of a specified date need only be true and correct as of such date.
The representations and warranties of Company set forth in this Agreement and in any certificate or other document delivered to
Purchaser by or on behalf of Company, Bank or any of their Subsidiaries pursuant to or in connection with this Agreement that contain
a “Material Adverse Effect” qualification or any other express materiality or similar qualification are true and correct
as of the date hereof and as of the Closing Date; provided, however, that any such representations and warranties made as of a
specified date need only be true and correct as of such date.


5.                  
GENERAL COVENANTS, CONDITIONS AND AGREEMENTS.


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


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


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






    	 	13	 



     


    

5.3              
Compliance with Laws; Additional Agreements.


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


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


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


5.3.4               
Corporate Existence. The Company shall do or cause to be done all things reasonably necessary to maintain,
preserve and renew its corporate existence and that of the Bank and the other Subsidiaries and its and their rights and franchises,
and comply in all material respects with all related laws applicable to the Company, the Bank or the other Subsidiaries.


5.3.5               
Dividends, Payments, and Guarantees During Event of Default. During the continuance of a failure by the
Company to make any required payment of principal or interest on the Subordinated Notes and during the occurrence of an Event of
Default (as defined under the Indenture) until such Event of Default is cured by the Company, the Company may not (a) declare or
pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital
stock; (b) make any payment of principal of, or interest or premium, if any, on, or repay, repurchase or redeem any of the Company’s
Indebtedness that ranks equal with or junior to the Subordinated Notes; or (c) make any payments under any guarantee that ranks
equal with or junior to the Subordinated Notes, other than (i) any dividends or distributions in shares of, or options, warrants
or rights to subscribe for or purchase shares of, any class of the Company’s common stock; (ii) any declaration of a non-cash
dividend in connection with the implementation of a shareholders’ rights plan, or the issuance of stock under any such plan
in the future, or the redemption or repurchase of any such rights pursuant thereto; (iii) as a result of a reclassification of
the Company’s capital stock or the exchange or conversion of one class or series of the Company’s capital stock for
another class or series of the Company’s capital stock; (iv) the purchase of fractional interests in shares of the Company’s
capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged;
or (v) purchases of any class of the Company’s common stock related to the issuance of common stock or rights under any benefit
plans for the Company’s directors, officers or employees or any of the Company’s dividend reinvestment plans.






    	 	14	 



     


    

5.3.6               
Tier 2 Capital. If all or any portion of the Subordinated Notes ceases to be eligible, or there is a material
risk that all or any portion of the Subordinated Notes will cease to be eligible, to qualify as Tier 2 Capital, other than due
to the limitation imposed on the capital treatment of subordinated debt during the five (5) years immediately preceding the Maturity
Date of the Subordinated Notes, the Company will immediately notify the Holder, and thereafter, subject to the terms of the Indenture,
the Company and the Holder will work together in good faith to execute and deliver all agreements as reasonably necessary in order
to restructure the applicable portions of the obligations evidenced by the Subordinated Notes to qualify as Tier 2 Capital; provided,
however, that nothing contained in this Agreement shall limit the Company’s right to redeem the Subordinated Notes upon the
occurrence of a Tier 2 Capital Event as described in the Subordinated Notes and the Indenture.


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


5.5              
Secondary Market Transactions. Each Purchaser shall have the right at any time and from time to time to
securitize its Subordinated Notes or any portion thereof in a single asset securitization or a pooled loan securitization of rated
single or multi-class securities secured by or evidencing ownership interests in the Subordinated Notes (each such securitization
is referred to herein as a “Secondary Market Transaction”). In connection with any such Secondary Market Transaction,
the Company shall, at the Company’s expense, cooperate with the Purchasers and otherwise reasonably assist the Purchasers
in satisfying the market standards to which Purchasers customarily adhere or which may be reasonably required in the marketplace
or by applicable rating agencies in connection with any such Secondary Market Transaction. Subject to any written confidentiality
obligation, all information regarding the Company may be furnished, without liability except in the case of gross negligence or
willful misconduct, to any the Purchaser and to any Person reasonably deemed necessary by Purchaser in connection with participation
in such Secondary Market Transaction. All documents, financial statements, appraisals and other data relevant to the Company or
the Subordinated Notes may be retained by any such Person, subject to the terms of any applicable confidentiality agreements.


5.6              
Bloomberg. The Company shall use commercially reasonable efforts to cause the Subordinated Notes to be
quoted on Bloomberg.


5.7              
Rule 144A Information. While any Subordinated Notes remain “restricted securities” within
the meaning of the Securities Act, the Company will make available, upon request, to any seller of such Subordinated Notes the
information specified in Rule 144A(d)(4) under the Securities Act, unless the Company is then subject to Section 13 or 15(d)
of the Exchange Act.


5.8              
NRSRO Rating. The Company will use commercially reasonable efforts to maintain a rating by a nationally
recognized statistical rating organization (“NRSRO”) while any Subordinated Notes remain outstanding.


5.9              
Resale Registration Statement. Subject to the terms and conditions of this Agreement, the Company will
provide to the Purchasers the resale registration rights described in the Registration Rights Agreement.


6.                  
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS.


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






    	 	15	 



     


    

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


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


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


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


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


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


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


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






    	 	16	 



     


    

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


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


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


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


6.13          
Tier 2 Capital. If the Company provides notice as contemplated in Section 5.3.6 of the occurrence
of the event contemplated in such section, thereafter the Company and the Purchasers will work together in good faith to execute
and deliver all agreements as reasonably necessary in order to restructure the applicable portions of the obligations evidenced
by the Subordinated Notes to qualify as Tier 2 Capital; provided, however, that nothing contained in this Agreement shall limit
the Company’s right to redeem the Subordinated Notes upon the occurrence of a Tier 2 Capital Event as described in the Subordinated
Notes.






    	 	17	 



     


    

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


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


7.                  
MISCELLANEOUS.


7.1              
Prohibition on Assignment by the Company. Except as described in Article VII of the Indenture,
the Company may not assign, transfer or delegate any of its rights or obligations under this Agreement or the Subordinated Notes
without the prior written consent of all the Holders.


7.2              
Time of the Essence. Time is of the essence for this Agreement.


7.3              
Waiver or Amendment. No waiver or amendment of any term, provision, condition, covenant or agreement herein
shall be effective unless in writing and signed by the parties hereto. No failure to exercise or delay in exercising, by a Purchaser
or any holder of the Subordinated Notes, of any right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, power or privilege preclude any other or further exercise thereof, or the exercise
of any other right or remedy provided by law. The rights and remedies provided in this Agreement are cumulative and not exclusive
of any right or remedy provided by law or equity.


7.4              
Severability. Any provision of this Agreement which is unenforceable or invalid or contrary to law, or
the inclusion of which would adversely affect the validity, legality or enforcement of this Agreement, shall be of no effect and,
in such case, all the remaining terms and provisions of this Agreement shall subsist and be fully effective according to the tenor
of this Agreement the same as though any such invalid portion had never been included herein. Notwithstanding any of the foregoing
to the contrary, if any provisions of this Agreement or the application thereof are held invalid or unenforceable only as to particular
Persons or situations, the remainder of this Agreement, and the application of such provision to Persons or situations other than
those to which it shall have been held invalid or unenforceable, shall not be affected thereby, but shall continue valid and enforceable
to the fullest extent permitted by law.


7.5              
Notices. Any notice which any party hereto may be required or may desire to give hereunder shall be deemed
to have been given if in writing and if delivered personally, or if mailed, postage prepaid, by United States registered or certified
mail, return receipt requested, or if delivered by a responsible overnight commercial courier promising next business day delivery,
addressed:



    	 	18	 



     


    
	if to the Company:	
        The Community Financial Corporation

        3035 Leonardtown Road

        Waldorf, Maryland 20601

        Attention: Todd L. Capitani, Executive Vice President and Chief Financial
Officer

	with a copy to:	
        Kilpatrick Townsend & Stockton LLP

        607 14th St., NW. Suite 900

        Washington, D.C. 20005

        Attention: Gary Bronstein, Esq.

        Edward G. Olifer, Esq.

	if to the Purchasers:	To the address indicated on such Purchaser’s signature page.


 


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


7.6              
Successors and Assigns. This Agreement shall inure to the benefit of the parties and their respective
heirs, legal representatives, successors and assigns; except that, unless a Purchaser consents in writing, no assignment made by
the Company in violation of this Agreement shall be effective or confer any rights on any purported assignee of the Company. The
term “successors and assigns” will not include a purchaser of any of the Subordinated Notes from any Purchaser merely
because of such purchase.


7.7              
No Joint Venture. Nothing contained herein or in any document executed pursuant hereto and no action or
inaction whatsoever on the part of a Purchaser, shall be deemed to make a Purchaser a partner or joint venturer with the Company.


7.8              
Documentation. All documents and other matters required by any of the provisions of this Agreement to
be submitted or furnished to a Purchaser shall be in form and substance satisfactory to such Purchaser.


7.9              
Entire Agreement. This Agreement, the Indenture, the Registration Rights Agreement and the Subordinated
Notes, along with any exhibits hereto and thereto, constitute the entire agreement between the parties hereto with respect to the
subject matter hereof and may not be modified or amended in any manner other than by supplemental written agreement executed by
the parties hereto. No party, in entering into this Agreement, has relied upon any representation, warranty, covenant, condition
or other term that is not set forth in this Agreement, the Indenture, the Registration Rights Agreement or in the Subordinated
Notes.


7.10          
Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of the State
of New York without giving effect to its laws or principles of conflict of laws. Nothing herein shall be deemed to limit any rights,
powers or privileges which a Purchaser may have pursuant to any law of the United States of America or any rule, regulation or
order of any department or agency thereof and nothing herein shall be deemed to make unlawful any transaction or conduct by a Purchaser
which is lawful pursuant to, or which is permitted by, any of the foregoing.


7.11          
No Third Party Beneficiary. This Agreement is made for the sole benefit of the Company and the Purchasers,
and no other Person shall be deemed to have any privity of contract hereunder nor any right to rely hereon to any extent or for
any purpose whatsoever, nor shall any other Person have any right of action of any kind hereon or be deemed to be a third party
beneficiary hereunder; provided, that the Placement Agent may rely on the representations and warranties contained herein
to the same extent as if it were a party to this Agreement.






    	 	19	 



     


    

7.12          
Legal Tender of United States. All payments hereunder shall be made in coin or currency which at the time
of payment is legal tender in the United States of America for public and private debts.


7.13          
Captions; Counterparts. Captions contained in this Agreement in no way define, limit or extend the scope
or intent of their respective provisions. This Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which
taken together shall constitute but one and the same instrument. In the event that any signature is delivered by facsimile transmission,
or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page
were an original thereof.


7.14          
Knowledge; Discretion. All references herein to a Purchaser’s or the Company’s knowledge shall
be deemed to mean the knowledge of such party based on the actual knowledge of such party’s Chief Executive Officer and Chief
Financial Officer or such other persons holding equivalent offices. Unless specified to the contrary herein, all references herein
to an exercise of discretion or judgment by a Purchaser, to the making of a determination or designation by a Purchaser, to the
application of a Purchaser’s discretion or opinion, to the granting or withholding of a Purchaser’s consent or approval,
to the consideration of whether a matter or thing is satisfactory or acceptable to a Purchaser, or otherwise involving the decision
making of a Purchaser, shall be deemed to mean that such Purchaser shall decide using the reasonable discretion or judgment of
a prudent lender.


7.15          
Waiver Of Right To Jury Trial. TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, THE PARTIES HERETO HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THAT THEY MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING IN ANY
WAY IN CONNECTION WITH ANY OF THE TRANSACTION DOCUMENTS, OR ANY OTHER STATEMENTS OR ACTIONS OF THE COMPANY OR THE PURCHASERS. THE
PARTIES HERETO ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY
INDEPENDENT LEGAL COUNSEL SELECTED OF THEIR OWN FREE WILL. THE PARTIES FURTHER HERETO ACKNOWLEDGE THAT (I) THEY HAVE READ AND UNDERSTAND
THE MEANING AND RAMIFICATIONS OF THIS WAIVER, (II) THIS WAIVER HAS BEEN REVIEWED BY THE PARTIES HERETO AND THEIR COUNSEL AND IS
A MATERIAL INDUCEMENT FOR ENTRY INTO THIS AGREEMENT AND THE REGISTRATION RIGHTS AGREEMENT (III) THIS WAIVER SHALL BE EFFECTIVE
AS TO EACH OF SUCH TRANSACTION DOCUMENTS AS IF FULLY INCORPORATED THEREIN.


7.16          
Expenses. Except as otherwise provided in this Agreement, each of the parties hereto 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.


7.17          
Survival. Each of the representations and warranties set forth in this Agreement shall survive the consummation
of the transactions contemplated hereby for a period of one year after the date hereof. Except as otherwise provided herein, all
covenants and agreements contained herein shall survive until, by their respective terms, they are no longer operative.


 






    	 	20	 



     


    

[Signature Pages Follow]


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 






    	 	21	 



     


    

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


	 	
        COMPANY:

        THE COMMUNITY FINANCIAL CORPORATION

         

        By:___________________________________

        Name: William J. Pasenelli

        Title:President and Chief Executive
        Officer

	 	 


 


 


 


 


 


 


 


 


 


 


 


 


[Company Signature Page to Subordinated Note Purchase Agreement]






    	 	22	 



     


    

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


	 	 
	 	
        PURCHASER:

        [INSERT PURCHASER’S NAME]

         

        By:____________________________

        Name: [●]

        Title:[●]

	 	
        Address of Purchaser:

         

        [●]

         

	 	
        Principal Amount of Purchased Subordinated Note:

         

        $[●]

         

         



 






    	 	23	 



     


    

SCHEDULE 4.1.1.2


 


Subsidiaries


 


 


   


The following entities comprise the direct and indirect subsidiaries of the Company:


   


Community Bank of the Chesapeake


Tri-County Capital Trust (a Delaware entity)


Tri-County Capital Trust II (a Delaware entity)


Community Mortgage Corporation of Tri-County (subsidiary of Community
Bank of the Chesapeake)


 


 


The state of or jurisdiction of incorporation or organization (unless otherwise noted) is
Maryland.


 


 


 






    	 	24	 



     


    

EXHIBIT A


FORM OF INDENTURE (INCLUDING FORM OF SUBORDINATED
NOTE)


 


 


 


 


 


 






    	 	25	 



     


    

EXHIBIT B


OPINION OF COUNSEL


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


2.                  
The Company is a registered bank holding company under the Bank Holding Company Act of 1956, as amended.


3.                  
The deposit accounts of the Bank are insured by the Federal Deposit Insurance Corporation under the provisions of the Federal Deposit
Insurance Act.


4.                  
The Company has all necessary power and authority to execute, deliver and perform its obligations under the Transaction Documents
to which it is a party and to consummate the transactions contemplated by the Transaction Documents.


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


6.                  
The execution and delivery by the Company of, and the performance by the Company of its agreements and obligations under, the Transaction
Documents do not (i) to such counsel’s knowledge, violate any applicable provisions of the Maryland General Corporation Law,
(ii) to such counsel’s knowledge, violate any court order or judgment of any agency or court of the State of Maryland having
jurisdiction over the Company and known to such counsel or (iii) violate the Charter or Bylaws, each as currently in effect.


7.                  
The Subordinated Notes have been duly and validly authorized by the Company and when authenticated and delivered by the Trustee
and issued and paid for by the Purchasers in accordance with the terms of this Agreement and the Indenture, will have been duly
executed, authenticated, issued and delivered and will constitute legal, valid and binding obligations of the Company, and enforceable
against the Company in accordance with their terms, except that the enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, receivership, moratorium, fraudulent conveyance, fraudulent transfer or other similar laws now or hereafter in
effect relating to creditors’ rights generally and (ii) general principles of equity (whether applied by a court of law or
equity) and the discretion of the court before which any proceeding therefor may be brought and will be entitled to the benefits
of the Indenture.






    	 	26	 



     


    

8.                  
Assuming the accuracy of the representations and warranties of each of the Purchasers and the Company set forth in the Agreement,
the Subordinated Notes to be issued and sold by the Company to Purchasers pursuant to the Agreement will be issued in a transaction
exempt from the registration requirements of the Securities Act.


 


 


 


 


 


 


 


 


 


 


 


 






    	 	27	 



     


    

EXHIBIT C


REGISTRATION RIGHTS AGREEMENT


 


 


 


 


 


 


28