Exhibit 10.1


Execution Version




SECURITIES PURCHASE AGREEMENT


          This
Securities Purchase Agreement (this “Agreement”) is
dated as of March 26, 2014, by and among Codorus Valley Bancorp, Inc., a
Pennsylvania corporation (the “Company”), and
each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and
collectively, the “Purchasers”).


RECITALS


          A.          The
Company and each Purchaser are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by Section
4(a)(2) of the Securities Act of 1933, as amended (the “Securities
Act”), and Rule 506 of Regulation D (“Regulation D”)
as promulgated by the United States Securities and Exchange Commission (the “Commission”) under the Securities Act.


          B.          Each
Purchaser, severally and not jointly, wishes to purchase, and the Company
wishes to sell, upon the terms and conditions stated in this Agreement, that
aggregate number of shares of common stock, $2.50 par value per share, of the
Company (the “Common Stock”), set forth below such Purchaser’s name on the
signature page of this Agreement (which aggregate amount for all Purchasers
together shall be 650,000 shares of Common Stock and shall be collectively
referred to herein as the “Shares”).


          C.          The
Company has engaged Sandler O’Neill & Partners, L.P. as its exclusive
placement agent (the “Placement Agent”) for the offering of the
Shares.


          D.          Contemporaneously
with the execution and delivery of this Agreement, the parties hereto are
executing and delivering a Registration Rights Agreement, substantially in the
form attached hereto as Exhibit A (the “Registration Rights Agreement”),
pursuant to which, among other things, the Company will agree to provide
certain registration rights with respect to the Shares under the Securities Act
and the rules and regulations promulgated thereunder and applicable state
securities laws.


          NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Purchasers
hereby agree as follows:


ARTICLE I

DEFINITIONS


          1.1         Definitions.
In addition to the terms defined elsewhere in this Agreement, for all purposes
of this Agreement, the following terms shall have the meanings indicated in
this Section 1.1:


          “Action”
means any Proceeding, inquiry or notice of violation pending or, to the
Company’s Knowledge, threatened in writing against the Company, any Subsidiary
or any of their respective properties or any officer, director or employee of
the Company or any Subsidiary acting in his or her capacity as an officer,
director or employee before or by any federal, state,





county, local
or foreign court, arbitrator, governmental or administrative agency, regulatory
authority, stock market, stock exchange or trading facility.


          “Affiliate”
means, with respect to any Person, any other Person that, directly or
indirectly through one or more intermediaries, Controls, is controlled by or is
under common control with such Person, as
such terms are used in and construed under Rule 405 under the Securities Act.



          “Agency”
has the meaning set forth in Section 3.1(qq).


          “Agreement”
shall have the meaning ascribed to such term in the Preamble.


          “Bank” means
PeoplesBank, A Codorus Valley Company, a Pennsylvania banking corporation and
wholly-owned Subsidiary of the Company.


          “Bank
Regulatory Authorities” has the meaning set forth in Section
3.1(b)(ii).


          “BHC Act” has
the meaning set forth in Section 3.1(b)(ii).


          “Board”
has the meaning set forth in Section 2.2(a)(v).


          “Business Day” means a day, other
than a Saturday or Sunday, on which banks in the City of New York are open for
the general transaction of business.


          “CIBC Act”
means the Change in Bank Control Act.


          “Closing”
means the closing of the purchase and sale of the Shares pursuant to this
Agreement.


          “Closing Date”
means the Trading Day when all of the Transaction Documents have been executed
and delivered by the applicable parties thereto, and all of the conditions set
forth in Sections 2.1, 2.2, 5.1 and 5.2 hereof are satisfied or waived, as the case may be, or such
other date as the parties may agree.


          “Commission”
has the meaning set forth in the Recitals.


          “Common Stock”
has the meaning set forth in the Recitals, and also includes any securities
into which the Common Stock may hereafter be reclassified or changed.


          “Company
Counsel” means Rhoads & Sinon LLP.


          “Company
Deliverables” has the meaning set forth in Section 2.2(a).


          “Company
Reports” has the meaning set forth in Section 3.1(mm).


          “Company’s
Knowledge” means with respect to any statement made to the knowledge
of the Company, that the statement is based upon the actual knowledge of the
executive officers of the Company having responsibility for the matter or
matters that are the subject of the statement after reasonable investigation.


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          “Control”
(including the terms “controlling”, “controlled by” or “under common control
with”) means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.


          “Department”
has the meaning set forth in Section 3.1(b)(ii).


          “Disclosure
Materials” has the meaning set forth in Section 3.1(h).


          “DTC”
means The Depository Trust Company.


          “Effective
Date” means the date on which the initial Registration Statement
required by Section 2(a) of the Registration Rights Agreement is first declared
effective by the Commission.


          “Environmental
Laws” has the meaning
set forth in Section 3.1(l).


          “ERISA”
has the meaning set forth in Section 3.1(ss).


          “ERISA
Entity” has the meaning set forth in Section 3.2(m).


          “Exchange Act”
means the Securities Exchange Act of 1934, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.


          “FDIC”
has the meaning set forth in Section 3.1(b)(ii).


          “Federal
Reserve” has the meaning set forth in Section 3.1(b)(ii).


          “GAAP”
means U.S. generally accepted accounting principles, as applied by the Company.


          “Indemnified
Person” has the meaning set forth in Section 4.8(a).


          “Insurer”
has the meaning set forth in Section 3.1(qq).


          “Intellectual
Property” has the meaning set forth in Section 3.1(r).


          “Lien”
means any lien, charge, claim, encumbrance, security interest, right of first
refusal, preemptive right or other restriction of any kind.


          “Legend
Removal Date” has the meaning set forth in Section 4.1(c).


          “Loan
Investor” has the meaning set forth in Section 3.1(qq).


          “Material
Adverse Effect” means any of
(i) a material and adverse effect on the legality, validity or enforceability
of any Transaction Document, (ii) a material and adverse effect on the results
of operations, assets, properties, business, condition (financial or otherwise)
or prospects of the Company and the Subsidiaries, taken as a whole, or (iii)
any adverse impairment to the


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Company’s ability to perform in any material respect on a timely basis
its obligations under any Transaction Document.


          “Material
Contract” means any contract
of the Company that was, or was required to be, filed as an exhibit pursuant to
Item 601 of Regulation S-K.


          “Material
Permits” has the meaning set forth in Section 3.1(p).


          “Money
Laundering Laws” has the meaning set forth in Section 3.1(jj).


          “New York
Courts” means the state and federal courts sitting in the State of
New York.


          “OFAC”
has the meaning set forth in Section 3.1(ii).


          “Outside Date”
means the fifteenth (15th) day following the date of this Agreement;
provided that if such day is not a Business Day, the first day following such
day that is a Business Day.


          “Person”
means an individual, corporation, partnership, limited liability company,
trust, business trust, association, joint stock company, joint venture, sole proprietorship,
unincorporated organization, governmental authority or any other form of entity
not specifically listed herein.


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


          “Principal
Trading Market” means the Trading Market on which the Common Stock
is primarily listed on and quoted for trading, which, as of the date of this
Agreement and the Closing Date, shall be the NASDAQ Global Market.


          “Proceeding”
means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.


          “Purchase
Price” means $20.00 per Share.


          “Purchaser
Deliverables” has the meaning set forth in Section 2.2(b).


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


          “Registration
Statement” means a registration statement meeting the requirements
set forth in the Registration Rights Agreement and covering the resale by the Purchasers
of the Registrable Securities (as defined in the Registration Rights
Agreement).


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


          “Regulatory
Agreement” has the meaning set forth in Section 3.1(oo).


          “Required
Approvals” has the meaning set forth in Section 3.1(e).


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          “Rights
Agreement” means that certain Rights Agreement, dated
November 4, 2005, by and between the Company and the Transfer Agent, as
amended.


          “Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such Rule.


          
“SEC Reports”
has the meaning set forth in Section 3.1(h).


          “Secretary’s Certificate” has the meaning set forth in
Section 2.2(a)(v).


          “Securities Act” means the Securities Act of 1933, as
amended.


          “Shares”
has the meaning set forth in the Recitals.


          “Subscription Amount” means with respect to each Purchaser,
the aggregate amount to be paid for the Shares purchased hereunder as indicated
on such Purchaser’s signature page to this Agreement next to the heading
“Aggregate Purchase Price (Subscription Amount)”.


          “Subsidiary” means the Bank and any other entity in which the
Company, directly or indirectly, owns sufficient capital stock or holds a
sufficient equity or similar interest such that it is consolidated with the
Company in the financial statements of the Company.


          “Trading Day” means (i) a day on which the Common Stock is
listed or quoted and traded on its Principal Trading Market or (ii) if the
Common Stock is not listed or quoted on any Trading Market, a day on which the
Common Stock is quoted in the over-the-counter market as reported in the “pink
sheets” by OTC Markets Group Inc. (or any similar organization or agency
succeeding to its functions of reporting prices); provided, that in the event
that the Common Stock is not listed or quoted as set forth in (i) and (ii)
hereof, then Trading Day shall mean a Business Day.


          “Trading Market” means whichever of the New York Stock
Exchange, the NYSE MKT, the NASDAQ Global Select Market, the NASDAQ Global
Market, the NASDAQ Capital Market or the OTC Bulletin Board on which the Common
Stock is listed or quoted for trading on the date in question.


          “Transaction Documents” means this Agreement, the schedules
and exhibits attached hereto, the Registration Rights Agreement, and any other
documents or agreements executed or delivered in connection with the
transactions contemplated hereunder.


          “Transfer Agent” means Wells Fargo Bank, N.A., or any
successor transfer agent for the Company.


          “U.S.
Sanctions Laws” has the meaning set forth in Section
3.2(p).


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ARTICLE II

PURCHASE AND SALE


          2.1        Closing.


                       (a)          Purchase
of Shares. Subject to the terms and conditions set forth in this Agreement,
at the Closing the Company shall issue and sell to each Purchaser, and each
Purchaser shall, severally and not jointly, purchase from the Company, the
number of Shares set forth below such Purchaser’s name on the signature page of
this Agreement at a per Share price equal to the Purchase Price. 


                       (b)          Closing.
The Closing of the purchase and sale of the Shares shall take place on the
Closing Date remotely by facsimile transmission or other electronic means as
the parties may mutually agree.


                       (c)          Form
of Payment. Unless otherwise agreed to by the Company and a Purchaser (as
to itself only), on the Closing Date, (1) the Company shall deliver to each
Purchaser one or more stock certificates, evidencing the number of Shares set
forth on such Purchaser’s signature page to this Agreement and (2) upon receipt
thereof, each Purchaser shall wire its Subscription Amount, in United States
dollars and in immediately available funds, in accordance with the Company’s
written wire transfer instructions. For purposes of clarity, a Purchaser shall
not be required to wire its Subscription Amount until it (or its designated
custodian per its delivery instructions) confirms receipt of its Shares.


          2.2        Closing
Deliveries.


                       (a)          On
or prior to the Closing, the Company shall issue, deliver or cause to be
delivered to each Purchaser the following (the “Company Deliverables”):


	
  

 	
  

 
	
  

 	
                            (i)           this
 Agreement, duly executed by the Company;

 
	
  

 	
  

 
	
  

 	
                            (ii)          one
 or more stock certificates, evidencing the Shares subscribed for by Purchaser
 hereunder, registered in the name of such Purchaser or as otherwise set forth
 on such Purchaser’s Stock Certificate Questionnaire included as Exhibit
 B-2 hereto (the “Stock Certificates”);

 
	
  

 	
  

 
	
  

 	
                            (iii)         a
 legal opinion of Company Counsel, dated as of the Closing Date and in the
 form attached hereto as Exhibit C, executed by such counsel and
 addressed to the Purchasers;

 
	
  

 	
  

 
	
  

 	
                            (iv)         the
 Registration Rights Agreement, duly executed by the Company; 

 
	
  

 	
  

 
	
  

 	
                            (v)          a
 certificate of the Secretary of the Company, in the form attached hereto as Exhibit
 D (the “Secretary’s
 Certificate”), dated as of the Closing Date, (a) certifying the
 resolutions adopted by the Board of Directors of the Company (the “Board”) or a duly authorized committee
 thereof approving the transactions

 


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 contemplated
 by this Agreement and the other Transaction Documents and the issuance of the
 Shares, (b) certifying the current versions of the articles of incorporation,
 as amended, and bylaws, as amended, of the Company and (c) certifying as to
 the signatures and authority of persons signing the Transaction Documents and
 related documents on behalf of the Company;

 
	
  

 	
  

 
	
  

 	
                            (vi)        a
 certificate of the Chief Executive Officer, President or Chief Financial
 Officer of the Company, in the form attached hereto as Exhibit E,
 dated as of the Closing Date, certifying to the fulfillment of the conditions
 specified in Sections 5.1(a) and 5.1(b); and

 
	
  

 	
  

 
	
  

 	
                            (vii)       a
 Certificate of Good Standing for the Company from the Pennsylvania Secretary
 of State as of a recent date.

 



                       (b)          On
or prior to the Closing, each Purchaser shall deliver or cause to be delivered
to the Company the following (the “Purchaser Deliverables”):


	
  

 	
  

 
	
  

 	
                            (i)          this
 Agreement, duly executed by such Purchaser;

 
	
  

 	
  

 
	
  

 	
                            (ii)         its
 Subscription Amount, in U.S. dollars and in immediately available funds, by
 wire transfer in accordance with the Company’s written instructions;

 
	
  

 	
  

 
	
  

 	
                            (iii)        the
 Registration Rights Agreement, duly executed by such Purchaser; and

 
	
  

 	
  

 
	
  

 	
                            (iv)         a
 fully completed and duly executed Accredited Investor Questionnaire and Stock
 Certificate Questionnaire in the forms attached hereto as Exhibits B-1
 and B-2, respectively.

 


ARTICLE III

REPRESENTATIONS AND WARRANTIES


          3.1        Representations
and Warranties of the Company. The Company hereby represents and warrants
as of the date hereof and as of the Closing Date (except for the
representations and warranties that speak as of a specific date, which shall be
made as of such date), to each of the Purchasers that:


                       (a)          Subsidiaries.
The Company has no direct or indirect Subsidiaries other than those listed in
Schedule 3.1(a) hereto. The Company owns, directly or indirectly, all of the
capital stock or comparable equity interests of each Subsidiary free and clear
of any and all Liens, and all the issued and outstanding shares of capital
stock or comparable equity interest of each Subsidiary are validly issued and
are fully paid, non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities.


                       (b)          Organization
and Qualification; Bank Regulations.


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                           (i)          The
 Company and each of its Subsidiaries is an entity duly incorporated or
 otherwise organized, validly existing and in good standing under the laws of
 the jurisdiction of its incorporation or organization (as applicable), with
 the requisite power and authority to own or lease and use its properties and
 assets and to carry on its business as currently conducted. Neither the
 Company nor any Subsidiary is in violation of any of the provisions of its
 respective certificate or articles of incorporation, bylaws or other
 organizational or charter documents. The Company and each of its Subsidiaries
 is duly qualified to conduct business and is in good standing as a foreign
 corporation or other entity in each jurisdiction in which the nature of the
 business conducted or property owned by it makes such qualification
 necessary, except where the failure to be so qualified or in good standing,
 as the case may be, would not be expected to have a Material Adverse Effect.

 
	
  

 	
  

 
	
  

 	
                           (ii)         The
 Company is duly registered as a bank holding company under the Bank Holding
 Company Act of 1956, as amended (the “BHC
 Act”). The Bank is the Company’s only Subsidiary banking
 institution. The Bank holds the requisite authority from the Pennsylvania
 Department of Banking and Securities (the “Department”)
 to do business as a state-chartered banking corporation under the laws of the
 Commonwealth of Pennsylvania. Each of the Company and the Bank is in
 compliance with all laws administered by the Board of Governors of the
 Federal Reserve System (the “Federal
 Reserve”), the Federal Deposit Insurance Corporation (the “FDIC”), the Department and any other
 foreign, federal or state bank regulatory authorities (together with the
 Department, the Federal Reserve and the FDIC, the “Bank Regulatory Authorities”) with jurisdiction over the
 Company and its Subsidiaries, except for any noncompliance that, individually
 or in the aggregate, has not had and would not be reasonably expected to have
 a Material Adverse Effect. The deposit accounts of the Bank are insured up to
 applicable limits by the FDIC, and all premiums and assessments required to
 be paid in connection therewith have been paid when due.

 



                       (c)        Authorization;
Enforcement; Validity. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each
of the Transaction Documents to which it is a party and otherwise to carry out
its obligations hereunder and thereunder, including, without limitation, to
issue the Shares in accordance with the terms hereof. The Company’s execution
and delivery of each of the Transaction Documents and the consummation by it of
the transactions contemplated hereby and thereby (including, but not limited
to, the sale and delivery of the Shares) have been duly authorized by all
necessary corporate action on the part of the Company, and no further corporate
action is required by the Company, its Board or its shareholders in connection
therewith. Each of the Transaction Documents has been (or upon delivery will
have been) duly executed by the Company and is, or when delivered in accordance
with the terms hereof or thereof, will constitute the legal, valid and binding
obligation of the Company enforceable against the Company in accordance with
its terms, except (i) as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally the enforcement of, creditors’ rights and
remedies or by other equitable principles of general application, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as


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indemnification
and contribution provisions may be limited by applicable law. There are no
shareholder agreements, voting agreements, voting trust agreements or similar
agreements with respect to the Company’s capital stock to which the Company is
a party or, to the Company’s Knowledge, between or among any of the Company’s
shareholders. 


                       (d)        No
Conflicts. The execution, delivery and performance by the Company of the
Transaction Documents and the consummation by the Company of the transactions
contemplated hereby or thereby (including, without limitation, the issuance of
the Shares) do not and will not (i) conflict with or violate any
provisions of the Company’s or any Subsidiary’s certificate or articles of
incorporation, bylaws or otherwise result in a violation of the organizational
documents of the Company or any Subsidiary, (ii) conflict with, or constitute a
default (or an event that with notice or lapse of time or both would result in
a default) under, result in the creation of any Lien upon any of the properties
or assets of the Company or any Subsidiary or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any Material Contract, or (iii) subject to receipt
of the Required Approvals, conflict with or result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other restriction of
any court or governmental authority to which the Company is subject (including
federal and state securities laws and the rules and regulations thereunder,
assuming the correctness of the representations and warranties made by the
Purchasers herein, of any self-regulatory organization to which the Company or
its securities are subject, including the Principal Trading Market), or by
which any property or asset of the Company is bound or affected, except in the
case of clauses (ii) and (iii) such as would not have or reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect.


                       (e)        Filings,
Consents and Approvals. Neither the Company nor any of its Subsidiaries is
required to obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any court or other federal,
state, local or other governmental authority, self-regulatory organization
(including the Principal Trading Market) or other Person in connection with the
execution, delivery and performance by the Company of the Transaction Documents
(including, without limitation, the issuance of the Shares), other than (i) the
filing with the Commission of one or more Registration Statements in accordance
with the requirements of the Registration Rights Agreement, (ii) filings
required by applicable state securities laws, (iii) the filing of a Notice of
Exempt Offering of Securities on Form D with the Commission under Regulation D
of the Securities Act, (iv) the filing of any requisite notices and/or
application(s) to the Principal Trading Market for the issuance and sale of the
Shares and the listing of the Shares for trading or quotation, as the case may
be, thereon in the time and manner required thereby; (v) the filings required
in accordance with Section 4.6 of this Agreement; and (vi) those that have been
made or obtained prior to the date of this Agreement (collectively, the “Required Approvals”).
The Company is unaware of any facts or circumstances relating to the Company or
its Subsidiaries which would be likely to prevent the Company from obtaining or
effecting any of the foregoing. 


                       (f)        Issuance
of the Shares. The issuance of the Shares has been duly authorized and the
Shares, when issued and paid for in accordance with the terms of the
Transaction Documents, will be duly and validly issued, fully paid and
non-assessable and free and clear of all Liens, other than restrictions on
transfer imposed by applicable securities laws,


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and
shall not be subject to preemptive or similar rights. Assuming the accuracy of
the representations and warranties of the Purchasers in this Agreement, the
Shares will be issued in compliance with all applicable federal and state
securities laws.


                       (g)        Capitalization.
The number of shares and type of all authorized, issued and outstanding capital
stock, options and other securities of the Company (whether or not presently
convertible into or exercisable or exchangeable for shares of capital stock of
the Company) is set forth in Schedule 3.1(g) hereto. All of the outstanding
shares of capital stock of the Company are duly authorized, validly issued,
fully paid and non-assessable, have been issued in compliance in all material
respects with all applicable federal and state securities laws, and none of
such outstanding shares was issued in violation of any preemptive rights or
similar rights to subscribe for or purchase any capital stock of the Company.
Except as specified in the SEC Reports, no shares of the Company’s outstanding
capital stock are subject to preemptive rights or any other similar rights;
there are no outstanding options, warrants, scrip, rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities or
rights convertible into, or exercisable or exchangeable for, any shares of
capital stock of the Company, or contracts, commitments, understandings or
arrangements by which the Company is or may become bound to issue additional
shares of capital stock of the Company or options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, or exercisable or exchangeable for, any
shares of capital stock of the Company, other than those issued or granted
pursuant to compensatory plans, contracts or arrangements described in the SEC
Reports; except as set forth in Schedule 3.1(g), there are no material
outstanding debt securities, notes, credit agreements, credit facilities or
other agreements, documents or instruments evidencing indebtedness of the
Company or by which the Company is bound; except for the Registration Rights
Agreement and Rights Agreement, there are no agreements or arrangements under
which the Company is obligated to register the sale of any of its securities
under the Securities Act; except as set forth in Schedule 3.1(g), there are no
outstanding securities or instruments of the Company that contain any
redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company is or may become bound to
redeem a security of the Company or any of its Subsidiaries; the Company does
not have any stock appreciation rights or “phantom stock” plans or agreements
or any similar plan or agreement; and neither the Company nor any of its
Subsidiaries have any liabilities or obligations required to be disclosed in
the SEC Reports but not so disclosed in the SEC Reports, which, individually or
in the aggregate, will have or would reasonably be expected to have a Material
Adverse Effect. There are no securities or instruments issued by or to which
the Company is a party containing anti-dilution or similar provisions that will
be triggered by the issuance of the Shares.


                       (h)        SEC
Reports; Disclosure Materials. The Company has filed all reports,
schedules, forms, statements and other documents required to be filed by it
under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the eighteen (18) months preceding the date hereof (the foregoing
materials, including the exhibits thereto and documents incorporated by
reference therein, being collectively referred to herein as the “SEC Reports” and
together with this Agreement and the schedules to this Agreement, the “Disclosure Materials”),
on a timely basis or has received a valid extension of such time of filing and
has filed any such SEC Reports prior to the expiration of any such extension.
As of their respective


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filing
dates, the SEC Reports complied in all material respects with the requirements
of the Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.


                        (i)        Financial
Statements. The financial statements of the Company and its Subsidiaries
included in the SEC Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the Commission with
respect thereto as in effect at the time of filing. Such financial statements
have been prepared in accordance with GAAP applied on a consistent basis during
the periods involved, except as may be otherwise specified in such financial
statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all
material respects the balance sheet of the Company and its Subsidiaries taken
as a whole as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, year-end audit adjustments, which would not be material,
either individually or in the aggregate.


                        (j)        Tax
Matters. The Company (i) has prepared and filed all foreign, federal and
state income and all other tax returns, reports and declarations required by
any jurisdiction to which it is subject, (ii) has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith, with respect to which adequate reserves have
been set aside on the books of the Company and (iii) has set aside on its
books provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply,
except, in the case of clauses (i) and (ii) above, where the failure to so pay
or file any such tax, assessment, charge or return would not have or reasonably
be expected to have a Material Adverse Effect.


                       (k)        Material
Changes. Since the date of the latest audited financial statements included
within the SEC Reports, except as disclosed in subsequent SEC Reports filed
prior to the date hereof, (i) there have been no events, occurrences or
developments that have had or would reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect, (ii) the Company
has not incurred any material liabilities (contingent or otherwise) other than
(A) trade payables, accrued expenses and other liabilities incurred in the
ordinary course of business consistent with past practice and (B) liabilities
not required to be reflected in the Company’s financial statements pursuant to
GAAP or required to be disclosed in filings made with the Commission, (iii) the
Company has not altered materially its method of accounting or the manner in
which it keeps its accounting books and records, (iv) the Company has not
declared or made any dividend or distribution of cash or other property to its
shareholders or purchased, redeemed or made any agreements to purchase or
redeem any shares of its capital stock, (v) the Company has not issued any
equity securities to any officer, director or Affiliate, except Common Stock
issued pursuant to existing Company stock option or stock purchase plans or
executive and director arrangements disclosed in the SEC Reports, (vi) there
has not been any material change or amendment to, or any waiver of any material
right by the Company under,


11





any
Material Contract under which the Company or any of its Subsidiaries is bound
or subject, and (vii) to the Company’s Knowledge, there has not been a material
increase in the aggregate dollar amount of: (A) the Bank’s nonperforming loans
(including nonaccrual loans and loans 90 days or more past due and still
accruing interest) or (B) the reserves or allowances established on the Company’s
or Bank’s financial statements with respect thereto. Except for the
transactions contemplated by this Agreement, to the Company’s Knowledge, no
event, liability or development has occurred or exists with respect to the
Company or its Subsidiaries or their respective business, properties,
operations or financial condition that would be required to be disclosed by the
Company under applicable securities laws at the time this representation is
made that has not been publicly disclosed at least one Trading Day prior to the
date that this representation is made.


                        (l)        Environmental
Matters. Neither the Company nor any of its Subsidiaries (i) is in
violation of any statute, rule, regulation, decision or order of any
governmental agency or body or any court, domestic or foreign, relating to the
use, disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, “Environmental Laws”), (ii) owns or operates any real
property contaminated with any substance that is in violation of any
Environmental Laws, (iii) is liable for any off-site disposal or contamination
pursuant to any Environmental Laws, or (iv) is subject to any claim relating to
any Environmental Laws; in each case, which violation, contamination, liability
or claim has had or would reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect; and, to the Company’s Knowledge, there
is no pending or threatened investigation that might lead to such a claim.


                       (m)        Litigation.
There is no Action which (i) adversely affects or challenges the legality,
validity or enforceability of any of the Transaction Documents or the issuance
of the Shares or (ii) except as disclosed in the SEC Reports, is reasonably
likely to have a Material Adverse Effect, individually or in the aggregate, if
there were an unfavorable decision. Neither the Company nor any Subsidiary, nor
any director or officer thereof, is or has been the subject of any Action
involving a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty. There has not been, and
to the Company’s Knowledge there is not pending or contemplated, any
investigation by the Commission involving the Company or any current or former
director or officer of the Company. The Commission has not issued any stop
order or other order suspending the effectiveness of any registration statement
filed by the Company or any of its Subsidiaries under the Exchange Act or the
Securities Act. There are no outstanding orders, judgments, injunctions, awards
or decrees of any court, arbitrator or governmental or regulatory body against
the Company or any executive officers or directors of the Company in their
capacities as such, which individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect.


                       (n)        Employment
Matters. No labor dispute exists or, to the Company’s Knowledge, is
imminent with respect to any of the employees of the Company or any Subsidiary
which would have or reasonably be expected to have a Material Adverse Effect.
None of the Company’s or Subsidiaries’ employees is a member of a union that
relates to such employee’s relationship with the Company or Subsidiary, and
neither the Company nor any of its Subsidiaries is a party to a collective
bargaining agreement, and the Company and each 


12






Subsidiary
believes that its relationship with its employees is good. To the Company’s
Knowledge, no executive officer is, or is now expected to be, in violation of
any material term of any employment contract, confidentiality, disclosure or
proprietary information agreement or non-competition agreement, or any other
contract or agreement or any restrictive covenant in favor of a third party,
and to the Company’s Knowledge, the continued employment of each such executive
officer does not subject the Company or any Subsidiary to any liability with
respect to any of the foregoing matters. The Company is in compliance with all
U.S. federal, state, local and foreign laws and regulations relating to
employment and employment practices, terms and conditions of employment and
wages and hours, except where the failure to be in compliance would not have or
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.


                    (o)          Compliance.
Neither the Company nor any of its Subsidiaries (i) is in default under or
in violation of (and no event has occurred that has not been waived that, with
notice or lapse of time or both, would result in a default by the Company or
any of its Subsidiaries under), nor has the Company or any of its Subsidiaries
received written notice of a claim that it is in default under or that it is in
violation of, any Material Contract (whether or not such default or violation
has been waived), (ii) is in violation of any order of any court, arbitrator
or governmental body having jurisdiction over the Company, its Subsidiaries or
their respective properties or assets, or (iii) is in violation of, or in
receipt of written notice that it is in violation of, any statute, rule,
regulation, policy or guideline or order of any governmental authority,
self-regulatory organization (including the Principal Trading Market)
applicable to the Company or any of its Subsidiaries, or which would have the
effect of revoking or limiting FDIC deposit insurance, except in each case set
forth in (i), (ii) and (iii) of this paragraph as would not have or reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect.


                    (p)          Regulatory
Permits. The Company and each of its Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state, local or
foreign regulatory authorities necessary to conduct their respective businesses
as currently conducted and as described in the SEC Reports, except where the
failure to possess such certificates, authorizations or permits, individually
or in the aggregate, has not and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect (“Material Permits”),
and (i) neither the Company nor any of its Subsidiaries has received any
notice in writing of proceedings relating to the revocation or material adverse
modification of any such Material Permits and (ii) the Company is unaware
of any facts or circumstances that would give rise to the revocation or
material adverse modification of any Material Permits.


                    (q)          Title
to Assets. Except as disclosed in the SEC Reports, the Company and its
Subsidiaries have good and marketable title to all real property and tangible
personal property owned by them which is material to the business of the
Company and its Subsidiaries, taken as a whole, in each case free and clear of
all Liens except such as do not materially affect the value of such property or
do not interfere with the use made and proposed to be made of such property by
the Company and any of its Subsidiaries. Any real property and facilities held
under lease by the Company and any of its Subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and facilities by the Company and its Subsidiaries.


13





                    (r)          Patents
and Trademarks. The Company and its Subsidiaries own, possess, license or
have other rights to use all foreign and domestic patents, patent applications,
trade and service marks, trade and service mark registrations, trade names,
copyrights, inventions, trade secrets, technology, Internet domain names,
know-how and other intellectual property (collectively, the “Intellectual Property”)
necessary for the conduct of their respective businesses as currently conducted
or as proposed to be conducted as disclosed in the SEC Reports except where the
failure to own, possess, license or have such rights would not have or
reasonably be expected to have a Material Adverse Effect. Except as set forth
in the SEC Reports and except where such violations or infringements would not
have or reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect, to the Company’s Knowledge,
(a) there are no rights of third parties to any such Intellectual
Property; (b) there is no infringement by third parties of any such
Intellectual Property; (c) there is no pending or threatened Proceeding by
others challenging the Company’s and/or its Subsidiaries’ rights in or to any
such Intellectual Property; (d) there is no pending or threatened Proceeding by
others challenging the validity or scope of any such Intellectual Property; and
(e) there is no pending or threatened Proceeding by others that the
Company and/or any Subsidiary infringes or otherwise violates any patent,
trademark, service mark, trade name, copyright, invention, trade secret,
technology, Internet domain name, know-how or other proprietary rights of
others.


                    (s)          Insurance.
The Company and each of the Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
the Company believes to be prudent and customary in the businesses and
locations in which and where the Company and the Subsidiaries are engaged. All
premiums due and payable under all such policies and bonds have been timely
paid, and the Company and its Subsidiaries are in material compliance with the
terms of such policies and bonds. Neither the Company nor any of its
Subsidiaries has received any notice of cancellation of any such insurance, nor,
to the Company’s Knowledge, will it or any Subsidiary be unable to renew their
respective existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would be materially higher than their existing
insurance coverage.


                    (t)          Transactions
With Affiliates and Employees. Except as set forth in the SEC Reports and
other than the grant of stock options or other equity awards that are not
individually or in the aggregate material in amount, none of the officers or
directors of the Company and, to the Company’s Knowledge, none of the employees
of the Company, is presently a party to any transaction with the Company or to
a presently contemplated transaction (other than for services as employees,
officers and directors) that would be required to be disclosed pursuant to
Item 404 of Regulation S-K promulgated under the Securities Act.


                    (u)          Internal
Control Over Financial Reporting. Except as set forth in the SEC Reports,
the Company maintains internal control over financial reporting (as such term
is defined in Rule 13a-15(f) under the Exchange Act) designed to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
GAAP and such internal control over financial reporting was effective as of the
date of the most recent SEC Report.


14





                    (v)          Sarbanes-Oxley;
Disclosure Controls. The Company is in compliance in all material respects
with all of the provisions of the Sarbanes-Oxley Act of 2002 which are
applicable to it. The Company maintains disclosure controls and procedures (as
such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange
Act), and such disclosure controls and procedures were effective as of the date
of the most recent SEC Report.


                    (w)          Certain
Fees. No Person will have, as a result of the transactions contemplated by
this Agreement, any valid right, interest or claim against or upon the Company
or a Purchaser for any commission, fee or other compensation pursuant to any
agreement, arrangement or understanding entered into by or on behalf of the
Company, other than the Placement Agent with respect to the offer and sale of
the Shares (which placement agent fees are being paid by the Company and are
set forth on Schedule 3.1(w)). The Company shall indemnify, pay, and hold each
Purchaser harmless against, any liability, loss or expense (including, without
limitation, attorneys’ fees and out-of-pocket expenses) arising in connection
with any such right, interest or claim.


                    
(x)           Private
Placement. Assuming the accuracy of the Purchasers’ representations and
warranties set forth in Section 3.2 of this Agreement and the accuracy of
the information disclosed in the Accredited Investor Questionnaires, no
registration under the Securities Act is required for the offer and sale of the
Shares by the Company to the Purchasers under the Transaction Documents. The
issuance and sale of the Shares hereunder does not contravene the rules and
regulations of the Principal Trading Market.


                    (y)          Registration
Rights. Other than each of the Purchasers and as set forth in the Rights
Agreement, no Person has any present right to cause the Company to effect the
registration under the Securities Act of any securities of the Company.


                    (z)          No
Integrated Offering. Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2, none of the
Company, its Subsidiaries nor, to the Company’s Knowledge, any of its
Affiliates or any Person acting on its behalf has, directly or indirectly, at
any time within the past six months, made any offers or sales of any Company
security or solicited any offers to buy any security under circumstances that
would (i) cause such offers and sales to be integrated for purposes of
Regulation D with the offer and sale by the Company of the Shares as
contemplated hereby or that otherwise would cause the exemption from
registration under Regulation D to be unavailable in connection with the offer
and sale by the Company of the Shares as contemplated hereby or (ii) cause the
offering of the Shares pursuant to the Transaction Documents to be integrated
with prior offerings by the Company for purposes of any applicable law,
regulation or stockholder approval provisions, including, without limitation,
under the rules and regulations of any Trading Market on which any of the
securities of the Company are listed or designated.


                    (aa)        Listing
and Maintenance Requirements. The Company’s Common Stock is registered
pursuant to Section 12(b) of the Exchange Act, and the Company has taken no
action designed to terminate the registration of the Common Stock under the
Exchange Act nor has the Company received any notification that the Commission
is contemplating terminating such registration. The Company has not, in the 12
months preceding the date hereof, received


15





 written notice from the Principal Trading
Market to the effect that the Company is not in compliance with the listing or
maintenance requirements of the Principal Trading Market. The Company is, and
has no reason to believe that it will not in the foreseeable future continue to
be, in compliance in all material respects with the listing and maintenance
requirements for continued trading of the Common Stock on the Principal Trading
Market.


                    (bb)        Investment
Company. The Company is not, and immediately after receipt of payment for
the Shares will not be, an “investment company,” an “affiliated person” of,
“promoter” for or “principal underwriter” for, an entity “controlled” by an
“investment company,” within the meaning of the Investment Company Act of 1940,
as amended.


                    (cc)        Unlawful
Payments. Neither the Company nor any of its Subsidiaries, nor any directors,
officers, nor to the Company’s Knowledge, employees, agents or other Persons
acting at the direction of or on behalf of the Company or any of its
Subsidiaries has, in the course of its actions for, or on behalf of, the
Company or any of its Subsidiaries: (a) directly or indirectly, used any
corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to foreign or domestic political activity; (b) made
any direct or indirect unlawful payments to any foreign or domestic
governmental officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds; (c) violated any provision of
the Foreign Corrupt Practices Act of 1977, as amended; or (d) made any
other unlawful bribe, rebate, payoff, influence payment, kickback or other
material unlawful payment to any foreign or domestic government official or
employee.


                    (dd)        Application
of Takeover Protections; Rights Agreements. Except for the Rights
Agreement, the Company has not adopted any stockholder rights plan or similar
arrangement relating to accumulations of beneficial ownership of Common Stock
or a change in control of the Company. The Company and its Board have taken all
action necessary to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s articles of
incorporation or other organizational documents or the laws of the jurisdiction
of its incorporation or otherwise which is or could become applicable to any
Purchaser as a direct consequence of the transactions contemplated by this
Agreement, including, without limitation, the Company’s issuance of the Shares
and any Purchaser’s ownership of the Shares.


                    (ee)        Disclosure.
The Company confirms that neither it nor, to the Company’s Knowledge, any of
its officers or directors nor any other Person acting on its or their behalf
has provided, and it has not authorized the Placement Agent to provide, any
Purchaser or its respective agents or counsel with any information that it
believes constitutes or could reasonably be expected to constitute material,
non-public information except insofar as the existence, provisions and terms of
the Transaction Documents and the proposed transactions hereunder may
constitute such information, all of which will be disclosed by the Company in
the Press Release as contemplated by Section 4.6 hereof. The Company understands
and confirms that each of the Purchasers will rely on the foregoing
representations in effecting transactions in securities of the Company. No
event or circumstance has occurred or information exists with respect to the
Company or any of its Subsidiaries or its or their business, properties,
operations or financial


16





conditions,
which, under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed, except for the announcement of this Agreement and related
transactions.


                    (ff)        Off
Balance Sheet Arrangements. There is no transaction, arrangement, or other
relationship between the Company (or any Subsidiary) and an unconsolidated or
other off balance sheet entity that is required to be disclosed by the Company
in its Exchange Act filings and is not so disclosed and would have or
reasonably be expected to have a Material Adverse Effect.


                    (gg)       Acknowledgment
Regarding Purchase of Shares. The Company acknowledges and agrees that each
of the Purchasers is acting solely in the capacity of an arm’s length purchaser
with respect to the Transaction Documents and the transactions contemplated
hereby and thereby. The Company further acknowledges that no Purchaser is
acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to the Transaction Documents and the transactions
contemplated thereby and any advice given by any Purchaser or any of their
respective representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely incidental to the
Purchasers’ purchase of the Shares.


                    (hh)       Absence
of Manipulation. The Company has not, and to the Company’s Knowledge no one
acting on its behalf has, taken, directly or indirectly, any action designed to
cause or to result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the Shares.


                    (ii)        OFAC.
Neither the Company nor any Subsidiary nor, to the Company’s Knowledge, any
director, officer, agent, employee, Affiliate or Person acting on behalf of the
Company or any Subsidiary is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”);
and the Company will not knowingly, directly or indirectly, use the proceeds of
the sale of the Shares, or lend, contribute or otherwise make available such
proceeds to any Subsidiary, joint venture partner or other Person or entity,
towards any sales or operations in any country sanctioned by OFAC or for the
purpose of financing the activities of any Person currently subject to any U.S.
sanctions administered by OFAC.


                    (jj)        Money
Laundering Laws. The operations of each of the Company and any Subsidiary
are and have been conducted at all times in compliance with the money
laundering statutes of applicable jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any applicable governmental agency (collectively,
the “Money Laundering Laws”) and
to the Company’s Knowledge, no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator involving the
Company and/or any Subsidiary with respect to the Money Laundering Laws is
pending or threatened.


                    (kk)        Compliance
with Certain Banking Regulations. The Company has no knowledge of any facts
and circumstances, and has no reason to believe that any facts or 


17





circumstances
exist, that would cause the Bank: (i) to be deemed not to be in satisfactory
compliance with the Community Reinvestment Act and the regulations promulgated
thereunder or to be assigned a CRA rating by federal or state banking
regulators of lower than “satisfactory”; (ii) to be deemed to be operating in
violation, in any material respect, of the Bank Secrecy Act of 1970 (or
otherwise known as the “Currency and Foreign Transactions Reporting Act”), the
USA Patriot Act (or otherwise known as “Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001”), any order issued with respect to anti-money laundering by OFAC or any
other anti-money laundering statute, rule or regulation; or (iii) to be deemed
not to be in satisfactory compliance, in any material respect, with all
applicable privacy of customer information requirements contained in any
federal and state privacy laws and regulations as well as the provisions of all
information security programs adopted by the Bank.


                    (ll)        No
Additional Agreements. The Company has no other agreements or
understandings (including, without limitation, side letters) with any Purchaser
or other Person to purchase Shares on terms more favorable to such Person than
as set forth herein.


                    (mm)     Reports,
Registrations and Statements. Since January 1, 2012, the Company and each
Subsidiary have filed all material reports, registrations and statements,
together with any required amendments thereto, that it was required to file
with the Bank Regulatory Authorities and any other applicable federal or state
securities or banking authorities, including, without limitation, all financial
statements and financial information required to be filed by it under the
Federal Deposit Insurance Act and the BHC Act. All such reports and statements
filed with any such regulatory body or authority are collectively referred to
herein as the “Company Reports.”
All such Company Reports were filed on a timely basis or the Company or the
applicable Subsidiary, as applicable, received a valid extension of such time
of filing and has filed any such Company Reports prior to the expiration of any
such extension. As of their respective dates, the Company Reports complied in
all material respects with all the rules and regulations promulgated by the
Bank Regulatory Authorities and any other applicable foreign, federal or state
securities or banking authorities, as the case may be.


                    (nn)       Bank
Regulatory Capitalization. As of December 31, 2013, the Bank met or
exceeded the standards necessary to be considered “well capitalized” under the
FDIC’s regulatory framework for prompt corrective action.


                    (oo)       Agreements
with Regulatory Agencies; Fiduciary Obligations. Neither the Company nor
any Subsidiary is subject to any cease-and-desist or other similar order or
enforcement action issued by, or is a party to any written agreement, consent
agreement or memorandum of understanding with, or is a party to any commitment
letter or similar undertaking to, or is subject to any capital directive by, or
since December 31, 2011, has adopted any board resolutions at the request of,
any governmental entity that currently restricts in any material respect the
conduct of its business or that in any material manner relates to its capital
adequacy, its liquidity and funding policies and practices, its ability to pay
dividends, its credit, risk management or compliance policies, its internal
controls, its management or its operations or business (each item in this
sentence, a “Regulatory Agreement”),
nor has the Company or any 


18





Subsidiary
been advised since December 31, 2011 by any governmental entity that it is
considering issuing, initiating, ordering, or requesting any such Regulatory
Agreement. 


                                  Each
of the Company and each Subsidiary has properly administered all accounts for
which it acts as a fiduciary, including accounts for which it serves as a
trustee, agent, custodian, personal representative, guardian, conservator or
investment advisor, in accordance with the terms of the governing documents,
applicable federal and state law and regulation and common law. None of the
Company, any Subsidiary or, to the Company’s Knowledge, any director, officer
or employee of the Company or any Subsidiary has committed any breach of trust
or fiduciary duty with respect to any such fiduciary account and the
accountings for each such fiduciary account are true and correct and accurately
reflect the assets of such fiduciary account.


                    (pp)       No
General Solicitation or General Advertising. Neither the Company nor, to
the Company’s Knowledge, any Person acting on its behalf has engaged or will
engage in any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with any offer or sale of the Shares.


                    (qq)       Mortgage
Banking Business. Except as has not had and would not reasonably be
expected to have a Material Adverse Effect: 


                                  (i)          The
Company and each of its Subsidiaries has complied with, and all documentation
in connection with the origination, processing, underwriting and credit
approval of any mortgage loan originated, purchased or serviced by the Company
or any of its Subsidiaries satisfied, (A) all applicable federal, state
and local laws, rules and regulations with respect to the origination,
insuring, purchase, sale, pooling, servicing, subservicing, or filing of claims
in connection with mortgage loans, including all laws relating to real estate
settlement procedures, consumer credit protection, truth in lending laws, usury
limitations, fair housing, transfers of servicing, collection practices, equal
credit opportunity and adjustable rate mortgages, (B) the responsibilities and
obligations relating to mortgage loans set forth in any agreement between the
Company or any of its Subsidiaries and any Agency, Loan Investor or Insurer,
(C) the applicable rules, regulations, guidelines, handbooks and other
requirements of any Agency, Loan Investor or Insurer and (D) the terms and
provisions of any mortgage or other collateral documents and other loan
documents with respect to each mortgage loan; and


                                  (ii)         No
Agency, Loan Investor or Insurer has (A) claimed in writing that the Company or
any of its Subsidiaries has violated or has not complied with the applicable
underwriting standards with respect to mortgage loans sold by the Company or
any of its Subsidiaries to a Loan Investor or Agency, or with respect to any
sale of mortgage servicing rights to a Loan Investor, (B) imposed in
writing restrictions on the activities (including commitment authority) of the
Company or any of its Subsidiaries or (C) indicated in writing to the Company
or any of its Subsidiaries that it has terminated or intends to terminate its
relationship with the Company or any of its Subsidiaries for poor performance,
poor loan quality or concern with respect to the Company’s or any of its Subsidiaries’
compliance with laws,


19





          For
purposes of this Section 3.1(qq): (A) “Agency” means the Federal Housing
Administration, the Federal Home Loan Mortgage Corporation, the Farmers Home
Administration (now known as Rural Housing and Community Development Services),
the Federal National Mortgage Association, the United States Department of
Veterans’ Affairs, the Rural Housing Service of the U.S. Department of
Agriculture or any other federal or state agency with authority to (i) determine
any investment, origination, lending or servicing requirements with regard to
mortgage loans originated, purchased or serviced by the Company or any of its
Subsidiaries or (ii) originate, purchase, or service mortgage loans, or
otherwise promote mortgage lending, including state and local housing finance
authorities; (B) “Loan Investor” means any person (including
an Agency) having a beneficial interest in any mortgage loan originated,
purchased or serviced by the Company or any of its Subsidiaries or a security
backed by or representing an interest in any such mortgage loan; and (C) “Insurer”
means a person who insures or guarantees for the benefit of the mortgagee all
or any portion of the risk of loss upon borrower default on any of the mortgage
loans originated, purchased or serviced by the Company or any of its
Subsidiaries, including the Federal Housing Administration, the United States
Department of Veterans’ Affairs, the Rural Housing Service of the U.S.
Department of Agriculture and any private mortgage insurer, and providers of
hazard, title or other insurance with respect to such mortgage loans or the
related collateral.


                    (rr)         Risk
Management Instruments. Except as has not had or would not reasonably be
expected to have a Material Adverse Effect, since January 1, 2012, all material
derivative instruments, including, swaps, caps, floors and option agreements,
whether entered into for the Company’s own account, or for the account of one
or more of the Company Subsidiaries, were entered into (1) only in the ordinary
course of business, (2) in accordance with prudent practices and in all
material respects with all applicable laws, rules, regulations and regulatory
policies and (3) with counterparties believed to be financially responsible at
the time; and each of them constitutes the valid and legally binding obligation
of the Company or one of the Company Subsidiaries, enforceable in accordance
with its terms. Neither the Company nor the Company Subsidiaries, nor, to the
Company’s Knowledge, any other party thereto, is in breach of any of its
material obligations under any such agreement or arrangement.


                    (ss)        ERISA.
The Company is in compliance in all material respects with all presently
applicable provisions of the Employee Retirement Income Security Act of 1974,
as amended, including the regulations and published interpretations thereunder
(herein called “ERISA”); no
“reportable event” (as defined in ERISA) has occurred with respect to any
“pension plan” (as defined in ERISA) for which the Company would have any
liability that would reasonably be expected to have a Material Adverse Effect;
the Company has not incurred and does not expect to incur liability under (i)
Title IV of ERISA with respect to termination of, or withdrawal from, any
“pension plan”; or (ii) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published interpretations
thereunder (the “Code”) that would
reasonably be expected to have a Material Adverse Effect; and each “Pension
Plan” for which the Company would have liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, to the Company’s Knowledge, whether by
action or by failure to act, which would cause the loss of such qualification.


20





                    (tt)         Shell
Company Status. The Company is not, and has never been, an issuer
identified in Rule 144(i)(1).


                    (uu)       Nonperforming
Assets. To the Company’s Knowledge, since the date of the latest audited
financial statements included within the SEC Reports, except as disclosed in
subsequent SEC Reports filed prior to the date hereof, the Company believes
that the Bank will be able to fully and timely collect substantially all
interest, principal or other payments when due under its loans, leases and
other assets that are not classified as nonperforming and such belief is
reasonable under all the facts and circumstances known to the Company and Bank,
and the Company believes that the amount of reserves and allowances for loan
and lease losses and other nonperforming assets established on the Company’s
and Bank’s financial statements is adequate and such belief is reasonable under
all the facts and circumstances known to the Company and Bank.


                    (vv)       Change
in Control. The issuance of the Shares to the Purchasers as contemplated by
this Agreement will not trigger any rights under any “change of control”
provision in any of the agreements to which the Company or any of its
Subsidiaries is a party, including any employment, “change in control,”
severance or other compensatory agreements and any benefit plan, which results
in payments to the counterparty or the acceleration of vesting of benefits.


                    (ww)     Common
Control. The Company is not and, after giving effect to the offering and
sale of the Shares, will not be under the control (as defined in the BHC Act
and the Federal Reserve’s Regulation Y (12 CFR Part 225) (“BHC Act Control”) of any company (as
defined in the BHC Act and the Federal Reserve’s Regulation Y). The Company is
not in BHC Act Control of any federally insured depository institution other
than the Bank. The Bank is not under the BHC Act Control of any company (as
defined in the BHC Act and the Federal Reserve’s Regulation Y) other than
Company. Neither the Company nor the Bank controls, in the aggregate, more than
five percent of the outstanding voting class, directly or indirectly, of any
federally insured depository institution, except, in the case of the Company,
the Bank. The Bank is not subject to the liability of any commonly controlled
depository institution pursuant to Section 5(e) of the Federal Deposit Insurance
Act (12 U.S.C. § 1815(e)).


                    (xx)       Registration
Eligibility. The Company is eligible to register the resale of the Shares
by the Purchasers using Form S-3 promulgated under the Securities Act.


                    (yy)       No
“Bad Actor” Disqualification. The Company has exercised reasonable care, in
accordance with Commission rules and guidance, and has conducted a factual
inquiry including the procurement of relevant questionnaires from each Covered
Person (as defined below) or other means, the nature and scope of which reflect
reasonable care under the relevant facts and circumstances, to determine
whether any Covered Person (as defined below) is subject to any of the “bad
actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under
the Securities Act (“Disqualification Events”).
To the Company’s knowledge, after conducting such sufficiently diligent factual
inquiries, no Covered Person is subject to a Disqualification Event, except for
a Disqualification Event covered by Rule 506(d)(2) or (d)(3) under the
Securities Act. The Company has complied, to the extent applicable, with any
disclosure 


21





obligations
under Rule 506(e) under the Securities Act. “Covered Persons” are those persons specified in
Rule 506(d)(1) under the Securities Act, including the Company; any
predecessor or affiliate of the Company; any director, executive officer, other
officer participating in the offering, general partner or managing member of
the Company; any beneficial owner of 20% or more of the Company’s outstanding
voting equity securities, calculated on the basis of voting power; any promoter
(as defined in Rule 405 under the Securities Act) connected with the
Company in any capacity at the time of the sale of the Securities; and any
person that has been or will be paid (directly or indirectly) remuneration for
solicitation of purchasers in connection with the sale of the Securities (a “Solicitor”), any general partner or
managing member of any Solicitor, and any director, executive officer or other
officer participating in the offering of any Solicitor or general partner or
managing member of any Solicitor.


          3.2     Representations
and Warranties of the Purchasers. Each Purchaser hereby, for itself and for
no other Purchaser, represents and warrants as of the date hereof and as of the
Closing Date to the Company as follows:


                    (a)          Organization;
Authority. If such Purchaser is an entity, it is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with the requisite corporate, partnership, limited liability
company or other power and authority to enter into and to consummate the
transactions contemplated by the applicable Transaction Documents and otherwise
to carry out its obligations hereunder and thereunder. If such Purchaser is an
entity, the execution and delivery of this Agreement and performance by such
Purchaser of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate or, if such Purchaser is not a
corporation, such partnership, limited liability company or other applicable
like action, on the part of such Purchaser. If such Purchaser is an entity,
each of this Agreement and the Registration Rights Agreement has been duly
executed by such Purchaser, and when delivered by such Purchaser in accordance
with the terms hereof, will constitute the valid and legally binding obligation
of such Purchaser, enforceable against it in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.


                    (b)          No
Conflicts. The execution, delivery and performance by such Purchaser of
this Agreement and the Registration Rights Agreement and the consummation by
such Purchaser of the transactions contemplated hereby and thereby will not
(i) result in a violation of the organizational documents of such
Purchaser (if such Purchaser is an entity), (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which such Purchaser is a party, or (iii) result in a
violation of any law, rule, regulation, order, judgment or decree (including
federal and state securities laws) applicable to such Purchaser, except in the
case of clauses (ii) and (iii) above, for such conflicts, defaults,
rights or violations which would not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the ability of such
Purchaser to perform its obligations hereunder.


22





                    (c)          Investment
Intent. Such Purchaser understands that the Shares are “restricted
securities” and have not been registered under the Securities Act or any
applicable state securities law and is acquiring the Shares as principal for
its own account and not with a view to, or for distributing or reselling such
Shares or any part thereof in violation of the Securities Act or any applicable
state securities laws, provided, however,
that by making the representations herein, such Purchaser does not agree to
hold any of the Shares for any minimum period of time and reserves the right at
all times to sell or otherwise dispose of all or any part of such Shares
pursuant to an effective registration statement under the Securities Act or
under an exemption from such registration and in compliance with applicable
federal and state securities laws. Such Purchaser is acquiring the Shares
hereunder in the ordinary course of its business. Such Purchaser does not
presently have any agreement, plan or understanding, directly or indirectly,
with any Person to distribute or effect any distribution of any of the Shares
to or through any Person.


                    (d)          Purchaser
Status. At the time such Purchaser was offered the Shares, it was, and at
the date hereof it is, an “accredited investor” as defined in Rule 501(a) under
the Securities Act.


                    (e)          General
Solicitation. Such Purchaser became aware of the offering of the Shares and
the Shares were offered to Purchaser solely by direct contact between Purchaser
and the Company or the Placement Agent, and not by any other means, and such
Purchaser is not purchasing the Shares as a result of any advertisement,
article, notice or other communication regarding the Shares published in any
newspaper, magazine or similar media or broadcast over television or radio or
presented at any seminar or any other general advertisement.


                    (f)          Experience
of Such Purchaser. Such Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Shares, and has so evaluated the merits and
risks of such investment. Such Purchaser is able to bear the economic risk of
an investment in the Shares and, at the present time, is able to afford a
complete loss of such investment.


                    (g)          Access to
Information. Such Purchaser is sufficiently aware of the Company’s business affairs
and financial condition to reach an informed and knowledgeable decision to
acquire the Shares. Such Purchaser acknowledges that it has been afforded
(i) the opportunity to ask such questions as it has deemed necessary of,
and to receive answers from, representatives of the Company concerning the
terms and conditions of the offering of the Shares and the merits and risks of
investing in the Shares; (ii) access to information about the Company and
the Subsidiaries and their respective financial condition, results of
operations, business, properties, management and prospects sufficient to enable
it to evaluate its investment; (iii) the opportunity to obtain such
additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment
decision with respect to the investment; and (iv) the opportunity to ask
questions of the Company’s management. Such Purchaser has received all
information it deems appropriate for assessing the risk of an investment in the
Shares. Neither such inquiries nor any other investigation conducted by or on
behalf of such Purchaser or its representatives or counsel shall 


23





modify,
amend or affect such Purchaser’s right to rely on the truth, accuracy and
completeness of the Disclosure Materials and the Company’s representations and
warranties contained in the Transaction Documents. Such Purchaser has sought
such accounting, legal and tax advice as it has considered necessary to make an
informed decision with respect to its acquisition of the Shares. Such Purchaser
acknowledges that neither the
Company nor the Placement Agent has made any representation, express or
implied, with respect to the accuracy, completeness or adequacy of any
available information except, with respect to the Company, as expressly set
forth in the SEC Reports or to the extent such information is covered by the
representations and warranties of the Company contained in Section 3.1.


                    (h)          Brokers
and Finders. Other than the Placement Agent with respect to the Company
(which fees are to be paid by the Company), no Person will have, as a result of
the transactions contemplated by this Agreement, any valid right, interest or
claim against or upon the Company or any Purchaser for any commission, fee or
other compensation pursuant to any agreement, arrangement or understanding
entered into by or on behalf of the Purchaser.


                    (i)          Independent
Investment Decision. Such Purchaser has independently evaluated the merits
of its decision to purchase Shares pursuant to the Transaction Documents, and
such Purchaser confirms that it has not relied on the advice of any other
Purchaser’s business and/or legal counsel in making such decision. Such
Purchaser understands that nothing in this Agreement or any other materials
presented by or on behalf of the Company to the Purchaser in connection with
the purchase of the Shares constitutes legal, tax or investment advice. Such
Purchaser has consulted such legal, tax and investment advisors as it, in its
sole discretion, has deemed necessary or appropriate in connection with its
purchase of the Shares. Such Purchaser understands that the Placement Agent has
acted solely as the agent of the Company in this placement of the Shares and
such Purchaser has not relied on the business or legal advice of the Placement
Agent or any of its agents, counsel or Affiliates in making its investment
decision hereunder, and confirms that none of such Persons has made any
representations or warranties to such Purchaser in connection with the
transactions contemplated by the Transaction Documents.


                    (j)          Reliance
on Exemptions. Such Purchaser understands that the Shares being offered and
sold to it in reliance on specific exemptions from the registration
requirements of U.S. federal and state securities laws and that the Company is
relying in part upon the truth and accuracy of, and such Purchaser’s compliance
with, the representations, warranties, agreements, acknowledgements and
understandings of such Purchaser set forth herein in order to determine the
availability of such exemptions and the eligibility of such Purchaser to
acquire the Shares.


                    (k)          No Governmental
Review. Such Purchaser understands that no U.S. federal or state agency or any
other government or governmental agency has passed on or made any
recommendation or endorsement of the Shares or the fairness or suitability of
the investment in the Shares nor have such authorities passed upon or endorsed
the merits of the offering of the Shares. Such Purchaser understands that the Shares are not savings accounts,
deposits or other obligations of any bank and are not insured by the FDIC,
including the FDIC’s Deposit Insurance Fund, or any other governmental agency.


24






                    (l)           Residency. Such Purchaser’s
residence (if an individual) or office in which its investment decision with
respect to the Shares was made (if an entity) are located at the address
immediately below such Purchaser’s name on its signature page hereto.


                   (m)          ERISA.


	
  

 	
  

 	
  

 
	
  

 	
                          (i)          If
 such Purchaser is, or is acting on behalf of, an ERISA Entity (as defined
 below), such Purchaser represents and warrants that on the date hereof;

 
	
  

 	
  

 
	
  

 	
  

 	
 (A)          The
 decision to invest assets of the ERISA Entity in the Shares was made by
 fiduciaries independent of the Company or its Affiliates, which fiduciaries
 are duly authorized to make such investment decisions and who have not relied
 on any advice or recommendations of the Company or its Affiliates;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (B)          Neither
 the Company nor any of its agents, representatives or Affiliates have
 exercised any discretionary authority or control with respect to the ERISA
 Entity’s investment in the Shares;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (C)          The
 purchase and holding of the Shares will not constitute a nonexempt prohibited
 transaction under ERISA or Section 4975 of the Code or a similar
 violation under any applicable similar laws; and

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (D)          The
 terms of the Transaction Documents comply with the instruments and applicable
 laws governing such ERISA Entity.

 
	
  

 	
  

 	
  

 
	
  

 	
                          (ii)          For
 the purpose of this paragraph, the term “ERISA Entity” will mean
 (A) an “employee benefit plan” within the meaning of Section 3(3)
 of ERISA subject to Title I of ERISA, (B) a “plan” within the meaning of
 Section 4975(e)(1) of the Code and (C) any person whose assets are
 deemed to be “plan assets” within the meaning of ERISA Section 3(42) and
 29 C.F.R. § 2510.3-101 or otherwise under ERISA.

 






                    (n)          Antitrust
and Other Consents, Filings, Etc. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
governmental entity or authority or any other person or entity in respect of
any law or regulation, including the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the rules and regulations thereunder, is necessary
or required, and no lapse of a waiting period under law applicable to such Purchaser
is necessary or required, in each case in connection with the execution,
delivery or performance by such Purchaser of this Agreement or the purchase of
the Shares contemplated hereby, other than passivity or anti-association
commitments that may be required by the Federal Reserve.


                    (o)          Regulatory
Matters. Such Purchaser understands and acknowledges that: (i) the
Company is a registered bank holding company under the BHC Act, and is subject
to regulation by the Federal Reserve; and (ii) acquisitions of interests
in bank holding companies 


25





are subject to
the BHC Act and the CIBC Act and may be reviewed by the Federal Reserve to
determine the circumstances under which such acquisitions of interests will
result in such Purchaser becoming subject to the BHC Act or subject to the
prior notice requirements of the CIBC Act. Assuming the accuracy of the
representations and warranties of the Company contained herein, such Purchaser
represents that neither it nor its Affiliates will, as a result of the
transactions contemplated herein, be deemed to (i) own or control 10% or
more of any class of voting securities of the Company or (ii) otherwise
control the Company for purposes of the BHC Act or CIBC Act. Such Purchaser is
not participating and has not participated with any other Purchaser in the
offering of the Shares in any joint activity or parallel action towards a
common goal between or among such Purchasers of acquiring control of the
Company.


                    (p)          OFAC
and Anti-Money Laundering. Such Purchaser understands, acknowledges,
represents and agrees that (i) to such Purchaser’s knowledge, such
Purchaser is not the target of any sanction, regulation, or law promulgated by
the OFAC, the Financial Crimes Enforcement Network or any other U.S.
governmental entity (“U.S.
Sanctions Laws”); (ii) to
such Purchaser’s knowledge, such Purchaser is not owned by, controlled by,
under common control with, or acting on behalf of any person that is the target
of U.S. Sanctions Laws; (iii) such Purchaser is not a “foreign shell bank”
and is not acting on behalf of a “foreign shell bank” under applicable
anti-money laundering laws and regulations; (iv) such Purchaser’s entry
into this Agreement or consummation of the transactions contemplated hereby
will not contravene U.S. Sanctions Laws or applicable anti-money laundering
laws or regulations; (v) such Purchaser will promptly provide to the
Company or any regulatory or law enforcement authority such information or documentation
as may be required to comply with U.S. Sanctions Laws or applicable anti-money
laundering laws or regulations; and (vi) the Company may provide to any
regulatory or law enforcement authority information or documentation regarding,
or provided by, such Purchaser for the purposes of complying with U.S.
Sanctions Laws or applicable anti-money laundering laws or regulations.


                    (q)          No
Outside Discussion of Offering. Such Purchaser has not discussed the
offering of the Shares with any other party or potential investors (other than
the Company, Placement Agent, any other Purchaser and such Purchaser’s
authorized representatives, counsel and advisors), except as expressly
permitted under the terms of this Agreement.


                    (r)          Placement
Fee. Such Purchaser acknowledges that the Company has agreed to pay the
Placement Agent a fee and certain expenses in respect of the sale of the Shares
to the Purchaser, as set forth on Schedule 3.1(w).


                    (s)          Restricted
Securities. Such Purchaser understands that the Shares are characterized as
“restricted securities” under the Securities Act inasmuch as they are being
acquired from the Company in a transaction not involving a public offering and
that under the Securities Act and the rules and regulations thereunder, such
securities may be resold without registration under the Securities Act only in
limited circumstances. Such Purchaser represents that it is familiar with Rule
144 promulgated under the Securities Act and understands the resale limitations
imposed thereby and by the Securities Act on the Shares.


26





          3.3          The
Company and each of the Purchasers acknowledge and agree that no party to this
Agreement has made or makes any representations or warranties with respect to
the transactions contemplated hereby other than those specifically set forth in
this Article III and the Transaction Documents.


ARTICLE IV

OTHER AGREEMENTS OF THE PARTIES


          4.1          Transfer
Restrictions.


                         (a)          Compliance
with Laws. Notwithstanding any
other provision of this Article IV, each Purchaser covenants that the Shares
may be disposed of only pursuant to an effective registration statement under,
and in compliance with the requirements of, the Securities Act, or pursuant to
an available exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act, and in compliance with any
applicable state, federal or foreign securities laws. In connection with any transfer of the Shares other than (i)
pursuant to an effective registration statement, (ii) to the Company or (iii)
pursuant to Rule 144 (provided that the transferor provides the Company with
reasonable assurances (in the form of a seller representation letter and, if
applicable, a broker representation letter) that such securities may be sold
pursuant to such rule), the Company may require the transferor thereof to
provide to the Company and the Transfer Agent, at the transferor’s expense, an
opinion of counsel selected by the transferor and reasonably acceptable to the
Company and the Transfer Agent, the form and substance of which opinion shall
be reasonably satisfactory to the Company and the Transfer Agent, to the effect
that such transfer does not require registration of such Shares under the
Securities Act. As a condition of
transfer (other than pursuant to clauses (i), (ii) or (iii) of the preceding
sentence), any such transferee shall agree in writing to be bound by the terms
of this Agreement and shall have the rights of a Purchaser under this Agreement
and the Registration Rights Agreement with respect to such transferred Shares.


                         (b)          Legends. Certificates evidencing the Shares shall
bear any legend as required by the “blue sky” laws of any state and a
restrictive legend in substantially the following form, until such time as they
are not required under Section 4.1(c) or applicable law:


	
  

 	
  

 	
  

 
	
  

 	
 THESE
 SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
 AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR
 SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
 STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) AN AVAILABLE
 EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
 REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
 SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF 

 	
  

 


27









	
  

 	
  

 	
  

 
	
  

 	
 COUNSEL
 REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS
 SOLD PURSUANT TO RULE 144 UNDER SAID ACT (PROVIDED THAT THE TRANSFEROR
 PROVIDES THE COMPANY WITH REASONABLE ASSURANCES (IN THE FORM OF A SELLER
 REPRESENTATION LETTER AND, IF APPLICABLE, A BROKER REPRESENTATION LETTER)
 THAT THE SECURITIES MAY BE SOLD PURSUANT TO SUCH RULE). NO REPRESENTATION IS MADE BY THE ISSUER AS
 TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE
 SECURITIES ACT FOR RESALES OF THESE SECURITIES.

 	
  

 



                         (c)          Removal
of Legends. The restrictive legend
set forth in Section 4.1(b) above shall be removed and the Company shall issue
a certificate without such restrictive legend or any other restrictive legend
to the holder of the applicable Shares upon which it is stamped or issue to
such holder by electronic delivery at the applicable balance account at DTC, if
(i) such Shares are registered for resale under the Securities Act, (ii) such
Shares are sold or transferred pursuant to Rule 144, or (iii) such Shares are
eligible for sale under Rule 144, without the requirement for the Company to be
in compliance with the current public information required under Rule 144(c)(1)
(or Rule 144(i)(2), if applicable) as to such securities and without volume or
manner-of-sale restrictions. Following
the earlier of (i) the Effective Date or (ii) Rule 144 becoming available for
the resale of Shares, without the requirement for the Company to be in
compliance with the current public information required under Rule 144(c)(1)
(or Rule 144(i)(2), if applicable) as to the Shares and without volume or
manner-of-sale restrictions, the Company shall instruct the Transfer Agent to
remove the legend from the Shares and shall cause its counsel to issue any
legend removal opinion required by the Transfer Agent. Any fees (with respect to the Transfer
Agent, Company counsel or otherwise) associated with the issuance of such
opinion or the removal of such legend shall be borne by the Company. If a legend is no longer required pursuant
to the foregoing, the Company will no later than three (3) Trading Days
following the delivery by a Purchaser to the Transfer Agent (with notice to the
Company) of a legended certificate or instrument representing such Shares
(endorsed or with stock powers attached, signatures guaranteed, and otherwise
in form necessary to affect the reissuance and/or transfer) and a
representation letter to the extent required by Section 4.1(a) (such third
Trading Day, the “Legend Removal Date”),
deliver or cause to be delivered to such Purchaser a certificate or instrument
(as the case may be) representing such Shares that is free from all restrictive
legends. The Company may not make any
notation on its records or give instructions to the Transfer Agent that enlarge
the restrictions on transfer set forth in this Section 4.1(c). Certificates for Shares free from all
restrictive legends may be transmitted by the Transfer Agent to the Purchasers
by crediting the account of the Purchaser’s prime broker with DTC as directed
by such Purchaser.


                         (d)          Acknowledgement. Each Purchaser hereunder acknowledges its
primary responsibilities under the Securities Act and accordingly will not sell
or otherwise transfer the Shares or any interest therein without complying with
the requirements of the Securities Act. Except as otherwise provided below,
while the Registration Statement remains effective, each 


28





Purchaser hereunder may sell
the Shares in accordance with the plan of distribution contained in the
registration statement and if it does so it will comply therewith and with the
related prospectus delivery requirements unless an exemption therefrom is
available or unless the Shares are sold pursuant to Rule 144. Each Purchaser, severally and not jointly
with the other Purchasers, agrees that if it is notified by the Company in
writing at any time that the registration statement registering the resale of
the Shares is not effective or that the prospectus included in such
registration statement no longer complies with the requirements of
Section 10 of the Securities Act, the Purchaser will refrain from selling
such Shares until such time as the Purchaser is notified by the Company that
such registration statement is effective or such prospectus is compliant with
Section 10 of the Exchange Act, unless such Purchaser is able to, and
does, sell such Shares pursuant to an available exemption from the registration
requirements of Section 5 of the Securities Act.


          4.2          Acknowledgment
of Dilution. The Company
acknowledges that the issuance of the Shares may result in dilution of the
outstanding shares of Common Stock.  The Company further acknowledges that
its obligations under the Transaction Documents, including without limitation
its obligation to issue the Shares pursuant to the Transaction Documents, are
unconditional and absolute and not subject to any right of set off,
counterclaim, delay or reduction, regardless of the effect of any such dilution
or any claim the Company may have against any Purchaser and regardless of the
dilutive effect that such issuance may have on the ownership of the other
shareholders of the Company.


          4.3          Furnishing
of Information. In order to enable
the Purchasers to sell the Shares under Rule 144 of the Securities Act, for a
period of one year from the Closing, the Company shall maintain the
registration of the Common Stock under Section 12(b) or 12(g) of the Exchange
Act and timely file (or obtain extensions in respect thereof and file within
the applicable grace period) all reports required to be filed by the Company
after the date hereof pursuant to the Exchange Act. During such one year period, if the Company is not required to
file reports pursuant to such laws, it will prepare and furnish to the
Purchasers and make publicly available the information described in Rule
144(c)(2), if the provision of such information will allow resales of the
Shares pursuant to Rule 144.


          4.4          Form
D and Blue Sky. The Company agrees
to timely file a Form D with respect to the Shares as required under
Regulation D. The Company, on or
before the Closing Date, shall take such action as the Company shall reasonably
determine is necessary in order to obtain an exemption for or to qualify the
Shares for sale to the Purchasers at the Closing pursuant to this Agreement
under applicable securities or “Blue Sky” laws of the states of the United
States (or to obtain an exemption from such qualification). The Company shall make all filings and
reports relating to the offer and sale of the Shares required under applicable
securities or “Blue Sky” laws of the states of the United States following the
Closing Date.


          4.5          No
Integration. The Company shall not,
and shall use its commercially reasonable efforts to ensure that no Affiliate
of the Company shall, sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in Section 2 of
the Securities Act) that will be integrated with the offer or sale of the
Shares in a manner that would require the registration under the Securities Act
of the sale of the Shares to the Purchasers, or that 


29





will
be integrated with the offer or sale of the Shares for purposes of the rules
and regulations of any Trading Market such that it would require stockholder
approval prior to the closing of such other transaction unless stockholder
approval is obtained before the closing of such subsequent transaction.


          4.6          Securities
Laws Disclosure; Publicity. The Company shall, by 9:00 a.m., New York City time, on the first (1st) Business Day
immediately following the date of this Agreement, issue one or more press releases (collectively, the “Press Release”)
reasonably acceptable to the Purchasers disclosing all material terms of the transactions contemplated hereby and any other material,
nonpublic information that the Company may have provided any Purchaser at any time prior to the filing of the Press Release. On
or before 9:00 a.m., New York City time, on the first (1st) Business Day immediately following the date of this Agreement,
the Company will file a Current Report on Form 8-K with the Commission describing the terms of the Transaction Documents (and
including as exhibits to such Current Report on Form 8-K the material Transaction Documents (including, without limitation, this
Agreement and the Registration Rights Agreement)). If, following public disclosure of the transactions contemplated hereby, this
Agreement terminates prior to Closing, the Company shall issue a press release disclosing such termination by 9:00 a.m., New York
City time, on the first Business Day following the date of such termination. Notwithstanding the foregoing, the Company shall
not publicly disclose the name of any Purchaser or any Affiliate or investment adviser of any Purchaser, or include the name of
any Purchaser or any Affiliate or investment adviser of any Purchaser in any press release or in any filing with the Commission
(other than a Registration Statement) or any regulatory agency or Trading Market, without the prior written consent of such Purchaser,
except (i) as required by the federal securities law in connection with (A) any registration statement contemplated
by the Registration Rights Agreement and (B) the filing of final Transaction Documents with the Commission and (ii) to
the extent such disclosure is required by law, at the request of the staff of the Commission or regulatory agency or under Trading
Market regulations, in which case the Company shall provide the Purchasers with prior written notice of such disclosure permitted
under this subclause (ii). From and after the issuance of the Press Release, no Purchaser shall be in possession of any material,
non-public information received from the Company, any Subsidiary or any of their respective officers, directors or employees or
the Placement Agent. Each Purchaser, severally and not jointly with other Purchasers, covenants that until such time as the transactions
contemplated by this Agreement are publicly disclosed by the Company as described in this Section 4.6, such Purchaser will
maintain the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms
of this transaction)).


          4.7          Non-Public
Information. Except with the
express written consent of such Purchaser and unless prior thereto such
Purchaser shall have executed a written agreement regarding the confidentiality
and use of such information, the Company shall not, and shall cause each
Subsidiary and each of their respective officers, directors, employees and
agents, not to, and each Purchaser shall not directly solicit the Company, any
of its Subsidiaries or any of their 




30





respective
officers, directors, employees or agents to provide any Purchaser with any
material, non-public information regarding the Company or any of its
Subsidiaries from and after the filing of the Press Release.


          4.8          Indemnification.


                         (a)          Indemnification of Purchasers. In
addition to the indemnity provided in the Registration Rights Agreement, the
Company will indemnify and hold each Purchaser and its directors, officers,
shareholders, members, partners, employees, agents and investment advisors (and
any other Persons with a functionally equivalent role of a Person holding such
titles notwithstanding a lack of such title or any other title), each Person
who controls such Purchaser (within the meaning of Section 15 of the Securities
Act and Section 20 of the Exchange Act), and the directors, officers,
shareholders, agents, members, partners, employees, agents or investment
advisors (and any other Persons with a functionally equivalent role of a Person
holding such titles notwithstanding a lack of such title or any other title) of
such controlling person (each, an “Indemnified Person”)
harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys’ fees and costs of
investigation that any such Indemnified
Person may suffer or incur as a result of (i) any breach of any of the
representations, warranties, covenants or agreements made by the Company in
this Agreement or in the other Transaction Documents or (ii) any action
instituted against an Indemnified
Person in any capacity, or any of them or their respective Affiliates,
by any shareholder of the Company or other third party who is not an Affiliate
of such Indemnified Person,
with respect to any of the transactions contemplated by this Agreement.   The Company will not be liable to any
Indemnified Person under this
Agreement to the extent, but only to the extent that a loss, claim, damage or
liability is directly attributable to any Indemnified Person’s breach of any of the representations,
warranties, covenants or agreements made by such Indemnified Person in this Agreement or in the other Transaction
Documents or attributable to the gross negligence or willful misconduct
on the part of such Indemnified Person. 


                         (b)          Conduct
of Indemnification Proceedings. Promptly after receipt by any Indemnified Person of notice of any
demand, claim or circumstances which would or might give rise to a claim or the
commencement of any Proceeding in respect of which indemnity may be sought
pursuant to Section 4.8(a), such Indemnified Person shall promptly notify
the Company in writing and the Company shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such Indemnified
Person, and shall assume the payment of all fees and expenses; provided, however, that the failure of any
Indemnified Person so to notify the Company shall not relieve the Company of
its obligations hereunder except to the extent that the Company is actually and
materially and adversely prejudiced by such failure to notify (as determined by
a court of competent jurisdiction, which determination is not subject to appeal
or further review). In any such Proceeding, any Indemnified Person shall have
the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Person unless: (i) the Company
and the Indemnified Person shall have mutually agreed to the retention of such
counsel; (ii) the Company shall have failed promptly to assume the defense of
such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Person in such Proceeding; or (iii) in the reasonable judgment
of counsel to such 


31





Indemnified Person,
representation of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them. The Company shall not
be liable for any settlement of any Proceeding effected without its written
consent, which consent shall not be unreasonably withheld, delayed or
conditioned. Without the prior written consent of the Indemnified Person, the
Company shall not effect any settlement of any pending or threatened Proceeding
in respect of which any Indemnified Person is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Person, unless
such settlement includes an unconditional release of such Indemnified Person
from all liability arising out of such Proceeding.


          4.9            Listing
of Common Stock. The Company will
use its reasonable best efforts to list the Shares for quotation on the NASDAQ
Global Market and maintain the listing of the Common Stock on the NASDAQ Global
Market. 


          4.10          Use
of Proceeds. The Company intends to
use the net proceeds from the sale of the Shares hereunder to redeem $12.5
million of shares of its senior non-cumulative, perpetual preferred stock,
Series B, held by Treasury and any remaining net proceeds for general corporate
purposes. 


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


          4.12          No
Change of Control. The Company
shall use reasonable best efforts to obtain all necessary irrevocable waivers,
adopt any required amendments and make all appropriate determinations so that
the issuance of the Shares to the Purchasers will not trigger a “change of
control” or other similar provision in any of the agreements to which the
Company or any of its Subsidiaries is a party, including without limitation any
employment, “change in control,” severance or other agreements and any benefit
plan, which results in payments to the counterparty or the acceleration of
vesting of benefits.


          4.13          No
Additional Issuances. Between the
date of this Agreement and the Closing Date, except for the issuance of shares
of Common Stock issuable as of the date hereof as set forth in Schedule 3.1(g)
and the Shares being issued pursuant to this Agreement, the Company shall not
issue or agree to issue any additional shares of Common Stock or other securities
which provide the holder thereof the right to convert such securities into, or
acquire, shares of Common Stock.


          4.14          Conduct
of Business. From the date hereof
until the earlier of the Closing Date or the termination of this Agreement in
accordance with its terms, except as contemplated by this Agreement, the
Company will, and will cause its Subsidiaries to, operate their business in the
ordinary course consistent with past practice, preserve intact the current
business organization of the Company, use commercially reasonable efforts to
retain the services of their employees, consultants and agents, preserve the
current relationships of the Company and its Subsidiaries 


32





with
material customers and other Persons with whom the Company and its Subsidiaries
have and intend to maintain significant relations, maintain all of its
operating assets in their current condition (normal wear and tear excepted) and
will not take or omit to take any action that would constitute a breach of
Section 3.1(k).


          4.15          Avoidance
of Control. Notwithstanding
anything to the contrary in this Agreement, neither the Company nor any
Subsidiary shall take any action (including, without limitation, any
redemption, repurchase, rescission or recapitalization of Common Stock, or
securities or rights, options or warrants to purchase Common Stock, or
securities of any type whatsoever that are, or may become, convertible into or
exchangeable into or exercisable for Common Stock in each case, where each Purchaser
is not given the right to participate in such redemption, repurchase,
rescission or recapitalization to the extent of such Purchaser’s pro rata
proportion), that would cause such Purchaser’s ownership of any class of voting
securities of the Company (together with the ownership by such Purchaser’s
Affiliates (as such term is used under the BHC Act) of voting securities of the
Company) to exceed 9.9%, in each case without the prior written consent of such
Purchaser, or to increase to an amount that would constitute “control” under
the BHC Act, the CIBC Act or any rules or regulations promulgated thereunder
(or any successor provisions) or otherwise cause such Purchaser to “control”
the Company under and for purposes of the BHC Act, the CIBC Act or any rules or
regulations promulgated thereunder (or any successor provisions). Notwithstanding anything to the contrary in
this Agreement, no Purchaser (together with its Affiliates (as such term is
used under the BHC Act)) shall have the ability to exercise any voting rights
of any class of securities in excess of 9.9% of the total outstanding voting
securities of the Company. In the event either the Company or a Purchaser
breaches its obligations under this Section 4.15 or believes that it is
reasonably likely to breach such an obligation, it shall promptly notify the
other parties hereto and shall cooperate in good faith with such parties to
modify ownership or make other arrangements or take any other action, in each
case, as is necessary to cure or avoid such breach.


          4.16          Most
Favored Nation. During the period
from the date of this Agreement through the Closing Date, neither the Company
nor its Subsidiaries shall enter into any additional, or modify any existing,
agreements with any existing or future investors in the Company or any of its
Subsidiaries that have the effect of establishing rights or otherwise
benefiting such investor in a manner more favorable in any material respect to
such investor than the rights and benefits established in favor of the
Purchasers by this Agreement, unless, in any such case, the Purchasers have
been provided with such rights and benefits.


          4.17          Limitation
on Beneficial Ownership. No Purchaser (and its Affiliates or any other
Persons with which it is acting in concert) will be entitled to purchase a
number of Shares pursuant to this Agreement that would result in such
Purchaser, together with its Affiliates (as such term is defined in the BHC
Act) becoming, directly or indirectly, the owner for purposes of the BHC Act
and CIBC Act of more than 9.9% of the number of shares of Common Stock issued
and outstanding.


33





ARTICLE V

CONDITIONS PRECEDENT TO CLOSING


          5.1          Conditions
Precedent to the Obligations of the Purchasers to Purchase Shares. The obligation of each Purchaser to acquire
Shares at the Closing is subject to the fulfillment to such Purchaser’s
satisfaction, on or prior to the Closing Date, of each of the following
conditions, any of which may be waived by such Purchaser (as to itself only):


                         (a)          Representations
and Warranties. The representations
and warranties of the Company contained herein shall be true and correct
as of the date when made and as
of the Closing Date, as though made on and as of such date, except for such
representations and warranties that speak as of a specific date. 


                         (b)          Performance. The Company shall have performed, satisfied
and complied in all material respects with all covenants, agreements and
conditions required by the Transaction Documents to be performed, satisfied or
complied with by it at or prior to the Closing.


                         (c)          No
Injunction. No statute, rule,
regulation, executive order, decree, ruling or injunction shall have been
enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction, nor shall there have been any regulatory
communication, that prohibits the consummation of any of the transactions
contemplated by the Transaction Documents.


                         (d)          Consents. The Company shall have obtained in a timely
fashion any and all consents, permits, approvals, registrations and waivers
necessary for consummation of the purchase and sale of the Shares, all of which
shall be and remain so long as necessary in full force and effect.


                         (e)          No
Suspensions of Trading in Common Stock; Listing. The Common Stock (i) shall be designated for listing and
quotation on the Principal Trading Market and (ii) shall not have been
suspended, as of the Closing Date, by the Commission or the Principal Trading
Market from trading on the Principal Trading Market nor shall suspension by the
Commission or the Principal Trading Market have been threatened, as of the
Closing Date, either (A) in writing by the Commission or the Principal
Trading Market or (B) by falling below the minimum listing maintenance
requirements of the Principal Trading Market.
The Company shall have obtained approval of the Principal Trading Market
to list the Shares.


                         (f)          Company
Deliverables. The Company shall
have delivered the Company Deliverables in accordance with Section 2.2(a).



                         (g)          Minimum
Gross Proceeds. The Company shall
receive at the Closing aggregate gross proceeds from the sale of Shares of at
least $13.0 million, at a price per share equal to the Purchase Price, and
shall simultaneously issue and deliver at the Closing to the Purchasers
hereunder an aggregate number of Shares equal to such gross proceeds divided by
the Purchase Price. 


34





                         (h)          Termination. This Agreement shall not have been
terminated as to such Purchaser in accordance with Section 6.16 herein.


                         (i)          Absence
of Bank Regulatory Issues. The
purchase of Shares by such Purchaser shall not (i) cause such Purchaser or any
of its affiliates to violate any banking regulation, (ii) require such
Purchaser or any of its affiliates to file a prior notice under the CIBC Act,
or otherwise seek prior approval of any banking regulator, (iii) require such
Purchaser or any of its affiliates to become a bank holding company or
otherwise serve as a source of strength for the Company or any Subsidiary or
(iv) cause such Purchaser, together with any other person whose Company
securities would be aggregated with such Purchaser’s Company securities for
purposes of any banking regulation or law, to collectively be deemed to own,
control or have the power to vote securities which (assuming, for this purpose
only, full conversion and/or exercise of such securities by the Purchaser and
such other Persons) would represent more than 9.9% of any class of voting
securities of the Company outstanding at such time.


                         (j)          No
Burdensome Condition. Since the
date hereof, there shall not be any action taken, or any law, rule or
regulation enacted, entered, enforced or deemed applicable to the Company or
its Subsidiaries, such Purchaser (or its Affiliates) or the transactions
contemplated by this Agreement, by any bank regulatory authority which imposes
any restriction or condition on the Company or its Subsidiaries or such
Purchaser or any of its Affiliates (other than such restrictions as are
described in any passivity or anti-association commitments, as may be amended
from time to time, entered into by such Purchaser) which such Purchaser
determines, in its reasonable good faith judgment, is materially and
unreasonably burdensome on the Company’s business following the Closing or on
such Purchaser (or any of its Affiliates) or would reduce the economic benefits
of the transactions contemplated by this Agreement to such Purchaser to such a
degree that such Purchaser would not have entered into this Agreement had such
condition or restriction been known to it on the date hereof (any such
condition or restriction, a “Burdensome
Condition”), and, for the avoidance of doubt, any requirements to
disclose the identities of limited partners, shareholders or non-managing
members of such Purchaser or its Affiliates or its investment advisers shall be
deemed a Burdensome Condition unless otherwise determined by such Purchaser in
its sole discretion.


                         (k)          Material
Adverse Effect. No Material Adverse
Effect shall have occurred since the date of this Agreement.


          5.2          Conditions
Precedent to the Obligations of the Company to sell Shares. The Company’s obligation to sell and issue
the Shares to each Purchaser at the Closing is subject to the fulfillment to
the satisfaction of the Company on or prior to the Closing Date of the
following conditions, any of which may be waived by the Company:


                         (a)          Representations
and Warranties. The representations
and warranties made by such Purchaser in Section 3.2 hereof shall be true
and correct as of the
date when made, and as of the Closing Date as though made on and as of such
date, except for representations and warranties that speak as of a specific
date.


35





                         (b)          Performance. Such Purchaser shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by the Transaction Documents to be performed, satisfied
or complied with by such Purchaser at or prior to the Closing Date.


                         (c)          No
Injunction. No statute, rule,
regulation, executive order, decree, ruling or injunction shall have been
enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction, nor shall there have been any regulatory
communication, that prohibits the consummation of any of the transactions contemplated
by the Transaction Documents.


                         (d)          Purchasers
Deliverables. Such Purchaser shall
have delivered its Purchaser Deliverables in accordance with
Section 2.2(b).


                         (e)          Termination. This Agreement shall not have been
terminated as to such Purchaser in accordance with Section 6.16 herein.


                         (f)          NASDAQ
LAS Confirmation. The Company shall have received confirmation from NASDAQ
OMX Listing Center that it has completed, without objection or notification of
deficiency, its review of the Company’s Notification of Listing of Additional
Shares covering the Shares.


ARTICLE VI

MISCELLANEOUS


          6.1          Fees
and Expenses. The Company shall pay
the reasonable legal fees and expenses of Greenberg Traurig, LLP, counsel to
certain Purchasers, incurred by such Purchasers in connection with the
transactions contemplated by the Transaction Documents, up to a maximum amount
of $25,000, which amount shall be paid directly by the Company to Greenberg
Traurig, LLP at the Closing or paid by the Company to Greenberg Traurig, LLP
upon termination of this Agreement so long as such termination did not occur as
a result of a material breach by such Purchasers of any of their obligations
hereunder (as the case may be). Except
as set forth above and elsewhere in the Transaction Documents, the parties
hereto shall be responsible for the payment of all expenses incurred by them in
connection with the preparation and negotiation of the Transaction Documents
and the consummation of the transactions contemplated hereby. The Company shall pay all amounts owed to
the Placement Agent relating to or arising out of the transactions contemplated
hereby. The Company shall pay all
Transfer Agent fees, stamp taxes and other taxes and duties levied in
connection with the sale and issuance of the Shares to the Purchasers.


          6.2          Entire
Agreement. The Transaction
Documents, together with the exhibits and schedules thereto, contain the entire
understanding of the parties with respect to the subject matter hereof and
supersede all prior agreements, understandings, discussions and
representations, oral or written, with respect to such matters, which the
parties acknowledge have been merged into such documents, exhibits and
schedules. At or after the Closing, and without further consideration, the
Company and the Purchasers will execute and deliver to the other such 


36





further
documents as may be reasonably requested in order to give practical effect to
the intention of the parties under the Transaction Documents.


          6.3          Notices. Any and all notices or other communications
or deliveries required or permitted to be provided hereunder shall be in
writing and shall be deemed given and effective on the earliest of (a) the
date of transmission, if such notice or communication is delivered via
facsimile or e-mail (provided the sender receives a machine-generated
confirmation of successful facsimile transmission or e-mail notification or
confirmation of receipt of an e-mail transmission) at the facsimile number or
e-mail address specified in this Section prior to 5:00 p.m., New York City
time, on a Trading Day, (b) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section on a day that is not a Trading Day
or later than 5:00 p.m., New York City time, on any Trading Day, (c) the
Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service with next day delivery specified, or
(d) upon actual receipt by the party to whom such notice is required to be
given. The address for such notices and communications shall be as follows:


	
  

 	
  

 	
  

 
	
  

 	
 If to the
 Company:

 	
 Codorus
 Valley Bancorp, Inc.

 
	
  

 	
  

 	
 105 Leader
 Heights Road

 
	
  

 	
  

 	
 P.O. Box
 2887

 
	
  

 	
  

 	
 York,
 Pennsylvania 17405-2887

 
	
  

 	
  

 	
 Attention: Larry J. Miller

 
	
  

 	
  

 	
 Telephone:
 717-747-1500

 
	
  

 	
  

 	
 Fax:
 717-747-0490

 
	
  

 	
  

 	
 E-Mail:
 LMILLER@peoplesbanknet.com

 
	
  

 	
  

 	
  

 
	
  

 	
 With a copy
 to:

 	
 Rhoads &
 Sinon LLP

 
	
  

 	
  

 	
 One South
 Market Square, 12th Floor

 
	
  

 	
  

 	
 P.O. Box
 1146

 
	
  

 	
  

 	
 Harrisburg,
 Pennsylvania 17108-1146

 
	
  

 	
  

 	
 Attention:
 Charles J. Ferry, Esquire

 
	
  

 	
  

 	
 Telephone:
 717-231-6631

 
	
  

 	
  

 	
 Fax: 717
 238-8623

 
	
  

 	
  

 	
 E-Mail:
 cferry@rhoads-sinon.com

 
	
  

 	
  

 	
  

 
	
  

 	
 If to a
 Purchaser:

 	
 To the
 address set forth under such Purchaser’s name on the signature page hereof;

 



or such other
address as may be designated in writing hereafter, in the same manner, by such
Person.


          6.4          Amendments;
Waivers; No Additional Consideration.
No amendment or waiver of any provision of this Agreement will be
effective with respect to any party unless made in writing and signed by a duly
authorized representative of such party.
No consideration shall be offered or paid to any Purchaser to amend or
consent to a waiver or modification of any 


37





provision
of any Transaction Document unless the same consideration is also offered to
all Purchasers who then hold Shares.


          6.5          Construction. The headings herein are for convenience
only, do not constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof.
The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party. This Agreement shall be
construed as if drafted jointly by the parties, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement or any of the Transaction Documents.


          6.6          Successors
and Assigns. The provisions of this
Agreement shall inure to the benefit of and be binding upon the parties and
their successors and permitted assigns. This Agreement, or any rights or
obligations hereunder, may not be assigned by the Company without the prior
written consent of the Purchasers. Any Purchaser may assign its rights
hereunder in whole or in part to any Person to whom such Purchaser assigns or
transfers any Shares in compliance with the Transaction Documents and
applicable law, provided such transferee shall agree in writing to be bound,
with respect to the transferred Shares, by the terms and conditions of this
Agreement that apply to the “Purchasers”.


          6.7          No
Third-Party Beneficiaries. This
Agreement is intended for the benefit of the parties hereto and their
respective successors and permitted assigns and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person, other than
Indemnified Persons.


          6.8          Governing
Law. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by and construed and enforced in accordance with the internal laws
of the State of New York, without regard to the principles of conflicts of law
thereof. Each party agrees that all Proceedings concerning the interpretation,
enforcement and defense of the transactions contemplated by this Agreement and
any other Transaction Documents (whether brought against a party hereto or its
respective Affiliates, employees or agents) may be commenced on a non-exclusive
basis in the New York Courts. Each party hereto hereby irrevocably submits to
the non-exclusive jurisdiction of the New York Courts for the adjudication of
any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the
enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any Proceeding, any claim that it is not
personally subject to the jurisdiction of any such New York Court, or that such
Proceeding has been commenced in an improper or inconvenient forum. Each party
hereto hereby irrevocably waives personal service of process and consents to
process being served in any such Proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by law. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL 


38





PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.


          6.9          Survival. Subject to applicable statute of
limitations, the representations, warranties, agreements and covenants
contained herein shall survive the Closing and the delivery of the Shares.


          6.10        Execution. This Agreement may be executed in two or
more counterparts, all of which when taken together shall be considered one and
the same agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party, it being understood that
the parties need not sign the same counterpart. 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.


          6.11        Severability. If any provision of this Agreement is held
to be invalid or unenforceable in any respect, the validity and enforceability
of the remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.


          6.12        Replacement
of Shares. If any certificate or
instrument evidencing any Shares is mutilated, lost, stolen or destroyed, the
Company shall issue or cause to be issued in exchange and substitution for and
upon cancellation thereof, or in lieu of and substitution therefor, a new
certificate or instrument, but only upon receipt of evidence reasonably satisfactory
to the Company and the Transfer Agent of such loss, theft or destruction and
the execution by the holder thereof of a customary lost certificate affidavit
of that fact and an agreement to indemnify and hold harmless the Company and
the Transfer Agent for any losses in connection therewith or, if required by
the Transfer Agent, a bond in such form and amount as is required by the
Transfer Agent. The applicants for a new certificate or instrument under such
circumstances shall also pay any reasonable third-party costs associated with
the issuance of such replacement Shares. If a replacement certificate or
instrument evidencing any Shares is requested due to a mutilation thereof, the
Company may require delivery of such mutilated certificate or instrument as a
condition precedent to any issuance of a replacement.


          6.13        Remedies. In addition to being entitled to exercise
all rights provided herein or granted by law, including recovery of damages,
each of the Purchasers and the Company may be entitled to specific performance
under the Transaction Documents. The parties agree that monetary damages may
not be adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agree to waive in
any action for specific performance of any such obligation (other than in
connection with any action for a temporary restraining order) the defense that
a remedy at law would be adequate.


          6.14        Payment
Set Aside. To the extent that the
Company makes a payment or payments to any Purchaser pursuant to any
Transaction Document or a Purchaser enforces or 


39







exercises its
rights thereunder, and such payment or payments or the proceeds of such
enforcement or exercise or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other Person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable
cause of action), then to the extent of any such restoration the obligation or
part thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.


          6.15     Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each
Purchaser under any Transaction Document are several and not joint with the
obligations of any other Purchaser, and no Purchaser shall be responsible in
any way for the performance of the obligations of any other Purchaser under any
Transaction Document. The decision of each Purchaser to purchase Shares
pursuant to the Transaction Documents has been made by such Purchaser
independently of any other Purchaser and independently of any information,
materials, statements or opinions as to the business, affairs, operations,
assets, properties, liabilities, results of operations, condition (financial or
otherwise) or prospects of the Company or any Subsidiary which may have been
made or given by any other Purchaser or by any agent or employee of any other
Purchaser, and no Purchaser and none of its agents or employees shall have any
liability to any other Purchaser (or any other Person) relating to or arising
from any such information, materials, statements or opinions. Nothing contained
herein or in any other Transaction Document, and no action taken by any
Purchaser pursuant hereto or thereto, shall be deemed to constitute the
Purchasers as a partnership, an association, a joint venture or any other kind
of entity, or create a presumption that the Purchasers are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated by the Transaction Documents. Each Purchaser acknowledges that no
other Purchaser has acted as agent for such Purchaser in connection with making
its investment hereunder and that no Purchaser will be acting as agent of such
Purchaser in connection with monitoring its investment in the Shares or
enforcing its rights under the Transaction Documents. Each Purchaser shall be
entitled to independently protect and enforce its rights, including without
limitation the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any Proceeding for such purpose. It is
expressly understood and agreed that each provision contained in this Agreement
is between the Company and a Purchaser, solely, and not between the Company and
the Purchasers collectively and not between and among the Purchasers.


          6.16     Termination.
This Agreement may be terminated and the sale and purchase of the Shares
abandoned at any time prior to the Closing by either the Company or any
Purchaser (with respect to itself only) upon written notice to the other, if
the Closing has not been consummated on or prior to 5:00 p.m., New York City
time, on the Outside Date; provided, however, that the right to
terminate this Agreement under this Section 6.16 shall not be available to any
Person whose failure to comply with its obligations under this Agreement has
been the cause of or resulted in the failure of the Closing to occur on or
before such time. Nothing in this Section 6.16 shall be deemed to release any
party from any liability for any breach by such party of the terms and
provisions of this Agreement or the other Transaction Documents or to impair
the right of any party to compel specific performance by any other party of its
obligations under 


40





this Agreement
or the other Transaction Documents. In the event of a termination pursuant to
this Section, the Company shall promptly notify all non-terminating Purchasers.
Upon a termination in accordance with this Section, the Company and the
terminating Purchaser(s) shall not have any further obligation or liability
(including arising from such termination) to the other, and no Purchaser will
have any liability to any other Purchaser under the Transaction Documents as a
result therefrom.


          6.17     Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in
(and without limiting any similar provisions of) the Transaction Documents,
whenever any Purchaser exercises a right, election, demand or option under a
Transaction Document and the Company does not timely perform its related
obligations within the periods therein provided, then such Purchaser may
rescind or withdraw, in its sole discretion from time to time upon written
notice to the Company, any relevant notice, demand or election in whole or in
part without prejudice to its future actions and rights.


          6.18     Adjustments
in Common Stock Numbers and Prices. In the event of any stock split,
subdivision, dividend or distribution payable in shares of Common Stock (or
other securities or rights convertible into, or entitling the holder thereof to
receive directly or indirectly shares of Common Stock), combination or other
similar recapitalization or event occurring after the date hereof and prior to
the Closing, each reference in any Transaction Document to a number of shares
or a price per share shall be deemed to be amended to appropriately account for
such event.


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

[SIGNATURE PAGE FOR COMPANY FOLLOWS]


41





          IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.


	
  

 	
  

 	
  

 
	
  

 	
 CODORUS
 VALLEY BANCORP, INC.

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Larry
 J. Miller

 
	
  

 	
 Name: Larry
 J. Miller

 
	
  

 	
 Title:
 President & Chief Executive Officer

 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

[SIGNATURE PAGES FOR PURCHASERS FOLLOW]


[SIGNATURE PAGE TO SECURITIES PURCHASE
AGREEMENT]









	
  

 	
  

 	
  

 
	
  

 	
 NAME OF
 PURCHASER:

 
	
  

 	
  

 
	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
 Name:

 
	
  

 	
 Title:

 
	
  

 	
  

 	
  

 
	
  

 	
 Aggregate
 Purchase Price (Subscription Amount): $__________

 
	
  

 	
  

 	
  

 
	
  

 	
 Number of
 Shares to be Acquired:

 
	
  

 	
  

 






	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Tax ID No.:

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Address for
 Notice:

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Telephone
 No.:

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Facsimile
 No.:

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 E-mail
 Address:

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Attention:

 	
  

 	
  

 






	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Delivery Instructions:

 	
  

 
	
 (if different than above)

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 c/o

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Street:

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 City/State/Zip:

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Attention: 

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Telephone No.:

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 


[SIGNATURE PAGE TO SECURITIES PURCHASE
AGREEMENT]





EXHIBITS


	
  

 	
  

 
	
 A:

 	
 Form of Registration
 Rights Agreement

 
	
  

 	
  

 
	
 B-1:

 	
 Accredited Investor
 Questionnaire

 
	
  

 	
  

 
	
 B-2:

 	
 Stock Certificate
 Questionnaire

 
	
  

 	
  

 
	
 C:

 	
 Form of Opinion of Company
 Counsel

 
	
  

 	
  

 
	
 D:

 	
 Form of Secretary’s
 Certificate

 
	
  

 	
  

 
	
 E:

 	
 Form of Officer’s
 Certificate

 









EXHIBIT A


Form of Registration Rights Agreement


Exhibit A| Page 1





EXHIBIT B-1


ACCREDITED
INVESTOR QUESTIONNAIRE


 (ALL
INFORMATION WILL BE TREATED CONFIDENTIALLY)


          To:     Codorus
Valley Bancorp, Inc.


          This
Investor Questionnaire (“Questionnaire”) must be completed by each
potential investor in connection with the offer and sale of shares of common
stock, $2.50 par value per share (the “Shares”), of Codorus Valley Bancorp, Inc.,
a Pennsylvania corporation (the “Company”). The Shares are being offered and
sold by the Company without registration under the Securities Act of 1933, as
amended (the “Act”), and the securities laws of certain states, in reliance
on the exemptions contained in Section 4(a)(2) of the Act and on Regulation D
promulgated thereunder and in reliance on similar exemptions under applicable
state laws. The Company must determine that a potential investor meets certain
suitability requirements before offering or selling Shares to such investor.
The purpose of this Questionnaire is to assure the Company that each investor
will meet the applicable suitability requirements. The information supplied by
you will be used in determining whether you meet such criteria, and reliance
upon the private offering exemptions from registration is based in part on the
information herein supplied.


          This
Questionnaire does not constitute an offer to sell or a solicitation of an
offer to buy any security. Your answers will be kept strictly confidential.
However, by signing this Questionnaire, you will be authorizing the Company to
provide a completed copy of this Questionnaire to such parties as the Company
deems appropriate in order to ensure that the offer and sale of the Shares will
not result in a violation of the Act or the securities laws of any state and
that you otherwise satisfy the suitability standards applicable to purchasers
of the Shares. All potential investors must answer all applicable questions and
complete, date and sign this Questionnaire. Please print or type your responses
and attach additional sheets of paper if necessary to complete your answers to
any item.


PART
A.          BACKGROUND
INFORMATION


	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Name of Beneficial Owner
 of the Shares: 

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Business Address:

 	
  

 
	
  

 	
  

 	
 (Number and Street)

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 
	
 (City)

 	
  

 	
 (State)

 	
  

 	
 (Zip Code)

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Telephone Number: (___)

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 If a corporation, partnership, limited liability company,
 trust or other entity:

 


Exhibit B-1| Page 1









	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Type of entity:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Were you formed for the
 purpose of investing in the securities being offered?

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Yes ____

 	
 No ____

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 If an individual:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Residence Address:

 	
  

 
	
  

 	
  

 	
  

 	
 (Number and Street)

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 
	
 (City)

 	
  

 	
  

 	
 (State)

 	
  

 	
 (Zip Code)

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Telephone Number: (___)

 	
  

 






	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Age:

 	
  

 	
  

 	
 Citizenship:

 	
  

 	
  

 	
 Where registered to vote:

 	
  

 



If an individual, set forth
in the space provided below the state in the United States in which you
maintain your residence:


If an entity, set forth in
the space provided below the state in the United States in which you made your
investment decision:


Are you a director or
executive officer of the Company?


	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Yes ____

 	
 No ____

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Social Security or
 Taxpayer Identification No.

 	
  

 



PART
B.          ACCREDITED
INVESTOR QUESTIONNAIRE


          In
order for the Company to offer and sell the Shares in conformance with state
and federal securities laws, the following information must be obtained
regarding your investor status. Please initial each category applicable
to you as a Purchaser of Shares.


	
  

 	
  

 	
  

 
	
  

 	
 __ (1)

 	
 A
 bank as defined in Section 3(a)(2) of the Securities Act, or any savings and
 loan association or other institution as defined in Section 3(a)(5)(A) of the
 Securities Act whether acting in its individual or fiduciary capacity;

 
	
  

 	
  

 	
  

 
	
  

 	
 __ (2)

 	
 A
 broker or dealer registered pursuant to Section 15 of the Securities Exchange
 Act of 1934;

 
	
  

 	
  

 	
  

 
	
  

 	
 __ (3)

 	
 An
 insurance company as defined in Section 2(13) of the Securities Act;

 


Exhibit B-1| Page 2









	
  

 	
  

 	
  

 
	
  

 	
 __ (4)

 	
 An
 investment company registered under the Investment Company Act of 1940 or a
 business development company as defined in Section 2(a)(48) of that Act;

 
	
  

 	
  

 	
  

 
	
  

 	
 __ (5)

 	
 A
 Small Business Investment Company licensed by the U.S. Small Business
 Administration under Section 301(c) or (d) of the Small Business Investment
 Act of 1958;

 
	
  

 	
  

 	
  

 
	
  

 	
 __ (6)

 	
 A
 plan established and maintained by a state, its political subdivisions, or
 any agency or instrumentality of a state or its political subdivisions, for
 the benefit of its employees, if such plan has total assets in excess of
 $5,000,000;

 
	
  

 	
  

 	
  

 
	
  

 	
 __ (7)

 	
 An
 employee benefit plan within the meaning of the Employee Retirement Income
 Security Act of 1974, if the investment decision is made by a plan fiduciary,
 as defined in Section 3(21) of such act, which is either a bank, savings and
 loan association, insurance company, or registered investment adviser, or if
 the employee benefit plan has total assets in excess of $5,000,000 or, if a
 self-directed plan, with investment decisions made solely by persons that are
 accredited investors;

 
	
  

 	
  

 	
  

 
	
  

 	
 __ (8)

 	
 A
 private business development company as defined in Section 202(a)(22) of the
 Investment Advisers Act of 1940;

 
	
  

 	
  

 	
  

 
	
  

 	
 __ (9)

 	
 An
 organization described in Section 501(c)(3) of the Internal Revenue Code, a
 corporation, Massachusetts or similar business trust, or partnership, not
 formed for the specific purpose of acquiring the Shares, with total assets in
 excess of $5,000,000;

 
	
  

 	
  

 	
  

 
	
  

 	
 __ (10)

 	
 A
 trust, with total assets in excess of $5,000,000, not formed for the specific
 purpose of acquiring the Shares, whose purchase is directed by a sophisticated
 person who has such knowledge and experience in financial and business
 matters that such person is capable of evaluating the merits and risks of
 investing in the Company;

 
	
  

 	
  

 	
  

 
	
  

 	
 ___ (11)

 	
 A
 natural person whose individual net worth, or joint net worth with that
 person’s spouse, at the time of his or her purchase exceeds $1,000,000
 (excluding in such calculation the value of your primary residence and the
 related amount of indebtedness secured by your primary residence up to its
 fair market value and including in such calculation, if applicable, the
 related amount of indebtedness secured by your primary residence that exceeds
 its fair market value and the amount of any increase on the related
 indebtedness secured by your primary residence incurred within 60 days prior
 to your purchase of the Company’s securities);

 
	
  

 	
  

 	
  

 
	
  

 	
 ___ (12)

 	
 A
 natural person who had an individual income in excess of $200,000 in each of
 the two most recent years, or joint income with that person’s spouse in 

 


Exhibit B-1| Page 3









	
  

 	
  

 	
  

 
	
  

 	
  

 	
 excess
 of $300,000, in each of those years, and has a reasonable expectation of
 reaching the same income level in the current year;

 
	
  

 	
  

 	
  

 
	
  

 	
 ___ (13)

 	
 An
 executive officer or director of the Company;

 
	
  

 	
  

 	
  

 
	
  

 	
 ___ (14)

 	
 An
 entity in which all of the equity owners qualify under any of the above
 subparagraphs. If the undersigned belongs to this investor category only,
 list the equity owners of the undersigned, and the investor category which
 each such equity owner satisfies.

 


Exhibit B-1| Page 4









	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 A.

 	
 FOR EXECUTION BY AN INDIVIDUAL:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 By

 	
  

 
	
  

 	
 Date

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Print Name:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 B.

 	
 FOR EXECUTION BY AN ENTITY:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Entity Name:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 By

 	
  

 
	
  

 	
 Date

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Print Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 C.

 	
 ADDITIONAL
 SIGNATURES (if required by partnership, corporation or trust document):

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Entity Name:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 By

 	
  

 
	
  

 	
 Date

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Print Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Entity Name:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 By

 	
  

 
	
  

 	
 Date

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Print Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 


Exhibit B-1| Page 5





EXHIBIT B-2


Stock Certificate Questionnaire


Pursuant to
Section 2.2(b) of the Agreement, please provide us with the following
information:


	
  

 	
  

 	
  

 	
  

 
	
 1.

 	
 The exact
 name that the Shares are to be registered in (this is the name that will
 appear on the stock certificate(s)). You may use a nominee name if appropriate:

 	
  

 	
  

 
	
 2.

 	
 The
 relationship between the Purchaser of the Shares and the Registered Holder
 listed in response to Item 1 above:

 	
  

 	
  

 
	
 3.

 	
 The mailing
 address, telephone and telecopy number of the Registered Holder listed in
 response to Item 1 above:

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 4.

 	
 The Tax
 Identification Number (or, if an individual, the Social Security Number) of
 the Registered Holder listed in response to Item 1 above:

 	
  

 	
  

 


Exhibit B-2| Page 1





EXHIBIT C


Form of Opinion of Company Counsel*


	
  

 	
  

 
	
 1.

 	
 The Company
 is validly existing as a corporation in good standing under the laws of the
 Commonwealth of Pennsylvania.

 
	
  

 	
  

 
	
 2.

 	
 The Company
 has the corporate power and authority to execute and deliver and to perform
 its obligations under the Transaction Documents, including, without
 limitation, to issue the Shares under the Purchase Agreement.

 
	
  

 	
  

 
	
 3.

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

 
	
  

 	
  

 
	
 4.

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

 
	
  

 	
  

 
	
 5.

 	
 Each of the
 Transaction Documents has been duly authorized, executed and delivered by the
 Company and, assuming due authorization, execution and delivery by the
 Purchasers (to the extent they are a party), each of the Transaction
 Documents constitutes a valid and binding agreement of the Company,
 enforceable against the Company in accordance with its terms. 

 
	
  

 	
  

 
	
 6.

 	
 The
 execution and delivery by the Company of each of the Transaction Documents
 and the performance by the Company of its obligations under such agreements,
 including its issuance and sale of the Shares, do not and will not: (a)
 require any consent, approval, license or exemption by, order or
 authorization of, or filing, recording or registration by the Company with
 any federal or state governmental authority, except (1) as may be required by
 federal securities laws with respect to the Company’s obligations under the
 Registration Rights Agreement, (2) the filing of Form D pursuant to
 Securities and Exchange Commission Regulation D and (3) the filings required
 in accordance with Section 4.6 of the Purchase Agreement, (b) violate any
 federal or state statute, rule or regulation, or any rule or regulation of
 the NASDAQ Global Market, or any court order, judgment or decree, if any,
 listed in Exhibit A hereto, which Exhibit lists all court orders,
 judgments and decrees that the Company has certified to us are applicable to
 it, (c) result in any violation of the Articles of Incorporation, as amended,
 or Bylaws, as amended, of the Company or (c) result in a breach of, or
 constitute a default under, any Material Contract.

 
	
  

 	
  

 
	
 7.

 	
 Assuming the
 accuracy of the representations, warranties and compliance with the covenants
 and agreements of the Purchasers and the Company contained in the Purchase
 Agreement, it is not necessary, in connection with the offer, sale and
 delivery of the Shares to the Purchasers to register the Shares under the
 Securities Act.

 
	
  

 	
  

 
	
 8.

 	
 The Shares
 being delivered to the Purchasers pursuant to the Purchase Agreement have
 been duly and validly authorized and, when issued, delivered and paid for as
 contemplated in the Purchase Agreement, will be duly and validly issued,
 fully paid and non-assessable, and free of any preemptive right or similar
 rights contained in the Company’s Articles of Incorporation, as amended, or
 By-laws, as amended.

 



* The opinion letter of Company
Counsel will be subject to customary limitations and carveouts. 


Exhibit C| Page 1





EXHIBIT D


Form of Secretary’s Certificate


          The
undersigned hereby certifies that he is the duly elected, qualified and acting
Secretary of Codorus Valley Bancorp, Inc., a Pennsylvania corporation (the “Company”),
and that as such he is authorized to execute and deliver this certificate in
the name and on behalf of the Company and in connection with the Securities
Purchase Agreement, dated as of March [__], 2014, by and among the Company and
the investors party thereto (the “Purchase Agreement”), and
further certifies in his official capacity, in the name and on behalf of the
Company, the items set forth below. Capitalized terms used but not otherwise
defined herein shall have the meaning set forth in the Purchase Agreement. 


	
  

 	
  

 
	
 1.

 	
 Attached
 hereto as Exhibit A is a true, correct and complete copy of the
 resolutions duly adopted by the Board of Directors of the Company at a
 meeting held on _____, 2014, which represent all of the resolutions approving
 the transactions contemplated by the Purchase Agreement and the issuance of
 the Shares. Such resolutions have not in any way been amended, modified,
 revoked or rescinded, have been in full force and effect since their adoption
 to and including the date hereof and are now in full force and effect. 

 
	
  

 	
  

 
	
 2.

 	
 Attached
 hereto as Exhibit B is a true, correct and complete copy of the
 Articles of Incorporation of the Company, together with any and all
 amendments thereto currently in effect, and no action has been taken to
 further amend, modify or repeal such Certificate of Incorporation, the same
 being in full force and effect in the attached form as of the date hereof. 

 
	
  

 	
  

 
	
 3.

 	
 Attached
 hereto as Exhibit C is a true, correct and complete copy of the Bylaws
 of the Company and any and all amendments thereto currently in effect, and no
 action has been taken to further amend, modify or repeal such Bylaws, the
 same being in full force and effect in the attached form as of the date
 hereof.

 
	
  

 	
  

 
	
 4.

 	
 Each
 person listed below has been duly elected or appointed to the position(s)
 indicated opposite his name and is duly authorized to sign the Purchase
 Agreement on behalf of the Company, and the signature appearing opposite such
 person’s name below is such person’s genuine signature.

 






	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Name

 	
  

 	
 Position

 	
  

 	
 Signature

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 


Exhibit D| Page 2









	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 



          IN
WITNESS WHEREOF, the undersigned has hereunto set his hand as of this ___ day
of __________, 2014.


	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 [_____________]

 	
  

 
	
  

 	
 Secretary

 	
  

 



          I,
[_____________], Chief [______] Officer of the Company, hereby certify that
[_____________] is the duly elected, qualified and acting Secretary of the
Company and that the signature set forth above is his true signature.


	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 [_____________]

 	
  

 
	
  

 	
 Chief [______] Officer

 	
  

 


Exhibit D| Page 3





EXHIBIT E


Form of Officer’s Certificate


          The
undersigned, the [_______________] of Codorus Valley Bancorp, Inc., a
Pennsylvania corporation (the “Company”), pursuant to Section 2.2(a)(vi)
of the Securities Purchase Agreement, dated as of March [ _], 2014, by and
among the Company and the investors signatory thereto (the “Securities
Purchase Agreement”), hereby represent, warrant and certify as
follows (capitalized terms used but not otherwise defined herein shall have the
meaning set forth in the Securities Purchase Agreement):


          1.          The
representations and warranties of the Company contained in the Securities
Purchase Agreement are true and correct as of the date when made and as of the
Closing Date, as though made on and as of such date, except for such representations
and warranties that speak as of a specific date.


          2.          The
Company has performed, satisfied and complied in all material respects with all
covenants, agreements and conditions required by the Transaction Documents to
be performed, satisfied or complied with by it at or prior to the Closing.


          IN
WITNESS WHEREOF, the undersigned have executed this
certificate this ___ day of _______________, 2014.


	
  

 	
  

 
	
  

 	
  

 
	
  

 	
 [___________]

 
	
  

 	
 [___________]

 
	
  

 	
  

 
	
  

 	
  

 
	
  

 	
  

 
	
  

 	
 [___________]

 
	
  

 	
 [___________]

 


Exhibit E| Page 1