Document:

SECURITIES
PURCHASE AGREEMENT

 

This Securities Purchase
Agreement (this “Agreement”) is dated as of June ____, 2012, between Novelos Therapeutics, Inc., a Delaware
corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and collectively the “Purchasers”).

 

WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant to an effective registration statement under the Securities Act
of 1933, as amended (the “Securities Act”), the Company desires to issue and sell to each Purchaser, and each
Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described in
this Agreement.

 

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 each Purchaser 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 have the meanings set forth in this Section 1.1:

 

“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.5.

 

“Action”
shall have the meaning ascribed to such term in Section 3.1(j).

 

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

 

“Board
of Directors” means the board of directors of the Company.

 

“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to
close.

 

“Class
A Warrants” means, collectively, the Class A Common Stock purchase warrants delivered to the Purchasers at the Closing
in accordance with Section 2.2(a) hereof, which Warrants shall be exercisable immediately and have a term of exercise equal to
______, in the form of Exhibit A-1 attached hereto.

 

“Class
B Warrants” means, collectively, the Class B Common Stock purchase warrants delivered to the Purchasers at the Closing
in accordance with Section 2.2(a) hereof, which Warrants shall be exercisable immediately and have a term of exercise equal to
_______, in the form of Exhibit A-2 attached hereto.

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“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1.

 

“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii)
the Company’s obligations to deliver the Securities, in each case, have been satisfied or waived, but in no event later than
the third Trading Day following the date hereof.

 

“Commission”
means the United States Securities and Exchange Commission.

 

“Common
Stock” means the common stock of the Company, par value $0.00001 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.

 

“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to
acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument
that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.

 

“Company
Counsel” means Foley Hoag LLP, with offices located at 155 Seaport Boulevard, Suite 1600, Boston, MA 02210-2600.

 

“EGS”
means Ellenoff Grossman & Schole LLP, with offices located at 150 East 42nd Street, New York, New York 10017.

 

“Escrow
Agent” means Signature Bank, a New York State chartered bank, with offices at 261 Madison Avenue, New York, New York
10016.

 

“Escrow
Agreement” means the escrow agreement entered into prior to the date hereof, by and among the Company, the Escrow Agent
and Rodman & Renshaw, LLC pursuant to which the Purchasers shall deposit Subscription Amounts with the Escrow Agent to be applied
to the transactions contemplated hereunder.

 

“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(r).

 

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

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“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company
pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors
or a majority of the members of a committee of non-employee directors established for such purpose, (b) securities upon the exercise
or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible
into shares of Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not been amended
since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or
conversion price of such securities, and (c) securities issued pursuant to acquisitions or strategic transactions approved by a
majority of the disinterested directors of the Company, provided that any such issuance shall only be to a Person (or to the equityholders
of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic
with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but
shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an
entity whose primary business is investing in securities.

 

“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.

 

“FDA”
shall have the meaning ascribed to such term in Section 3.1(gg).

 

“FDCA”
shall have the meaning ascribed to such term in Section 3.1(gg).

 

“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).

 

“Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(z).

 

“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(o).

 

“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).

 

“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(m).

 

“Per
Share Purchase Price” equals $_______, subject to adjustment for reverse and forward stock splits, stock dividends, stock
combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.

 

“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Pharmaceutical
Product” shall have the meaning ascribed to such term in Section 3.1(gg).

 

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

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“Prospectus”
means the final prospectus filed for the Registration Statement.

 

“Prospectus
Supplement” means any supplement to the Prospectus complying with Rules 424(b) and 430A of the Securities Act that is
filed with the Commission and delivered by the Company to each Purchaser at the Closing.

 

“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.8.

 

“Registration
Statement” means the effective registration statement with Commission file No. 333-180631 which registers the sale of
the Shares, the Warrants and the Warrant Shares to the Purchasers.

 

“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).

 

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

 

“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.

 

“Rule
430A” means Rule 430A promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.

 

“SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(h).

 

“Securities”
means the Shares, the Warrants and the Warrant Shares.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Shares”
means the shares of Common Stock issued or issuable to each Purchaser pursuant to this Agreement.

 

“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but
shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock). 

 

“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for Shares and Warrants purchased hereunder as specified
below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,”
in United States dollars and in immediately available funds.

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“Subsidiary”
means any subsidiary of the Company as set forth on Schedule 3.1(a), and shall, where applicable, also include any direct
or indirect subsidiary of the Company formed or acquired after the date hereof.

 

“Trading
Day” means a day on which the principal Trading Market is open for trading.

 

“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE AMEX, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the
New York Stock Exchange or the OTC Bulletin Board (or any successors to any of the foregoing).

 

“Transaction
Documents” means this Agreement, the Warrants and any other documents or agreements executed in connection with the transactions
contemplated hereunder.

 

“Transfer
Agent” means American Stock Transfer & Trust Company, the current transfer agent of the Company, with a mailing address
of 59 Maiden Lane, New York, NY 10038 and a facsimile number of 718-765-8718, and any successor transfer agent of the Company.

 

“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.12(b).

 

“Warrants”
means, collectively, the Class A Warrants and the Class B Warrants.

 

“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants.

 

ARTICLE II.

PURCHASE AND SALE

 

2.1Closing.
On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution
and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly,
agree to purchase, up to an aggregate of $_______ of Shares and Warrants. Each Purchaser shall deliver to the Escrow Agent, via
wire transfer or a certified check, immediately available funds equal to such Purchaser’s Subscription Amount as set forth
on the signature page hereto executed by such Purchaser and the Company shall deliver to each Purchaser its respective Shares and
a Warrant as determined pursuant to Section 2.2(a), and the Company and each Purchaser shall deliver the other items set forth
in Section 2.2 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3,
the Closing shall occur at the offices of EGS or such other location as the parties shall mutually agree. 

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2.2Deliveries.

 

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

 

(i)this
Agreement duly executed by the Company;

 

(ii)a
legal opinion of Company Counsel, substantially in the form of Exhibit B attached hereto;

 

(iii)a
copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver on an expedited basis via
The Depository Trust Company Deposit or Withdrawal at Custodian system (“DWAC”) Shares equal to such Purchaser’s
Subscription Amount divided by the Per Share Purchase Price, registered in the name of such Purchaser;

 

(iv)a
Class A Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to 50% of such
Purchaser’s Shares, with an exercise price equal to $_____, subject to adjustment therein (such Class A Warrant certificate
may be delivered within three Trading Days of the Closing Date);

 

(v)a
Class B Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to 100% of
such Purchaser’s Shares, with an exercise price equal to $_____, subject to adjustment therein (such Class B Warrant certificate
may be delivered within three Trading Days of the Closing Date); and

 

(vi)the
Prospectus and Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities Act).

 

(b)On
or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company or the Escrow Agent, as applicable,
the following:

 

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

 

(ii)to
Escrow Agent, such Purchaser’s Subscription Amount by wire transfer to the account specified in the Escrow Agreement.

 

2.3Closing
Conditions. 

 

(a)The
obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:

 

(i)the
accuracy in all material respects on the Closing Date of the representations and warranties of the Purchasers contained herein
(unless as of a specific date therein in which case they shall be accurate as of such date);

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(ii)all
obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been
performed in all material respects; and

 

(iii)the
delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.

 

(b)The
respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being
met:

 

(i)the
accuracy in all material respects when made and on the Closing Date of the representations and warranties of the Company contained
herein (unless as of a specific date therein);

 

(ii)all
obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed
in all material respects;

 

(iii)the
delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;

 

(iv)there
shall have been no Material Adverse Effect with respect to the Company since the date hereof; and

 

(v)from
the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s
principal Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg
L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are
reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States
or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national
or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in
each case, in the reasonable judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Securities at the
Closing.

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

 

3.1Representations
and Warranties of the Company. Except as set forth in the Prospectus, as supplemented
by the Prospectus Supplements, which Prospectus (as so supplemented) shall be deemed a part hereof and shall qualify any representation
or otherwise made herein to the extent of the disclosure contained in the Prospectus (as so supplemented), the Company hereby makes
the following representations and warranties to each Purchaser:

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(a)Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set forth in the Prospectus. The Company owns, directly or indirectly,
all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding
shares of capital stock 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. If the Company has no subsidiaries, all other references to the Subsidiaries or
any of them in the Transaction Documents shall be disregarded.

 

(b)Organization
and Qualification. The Company and each of the 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, with the requisite power
and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company
nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation,
bylaws or other organizational or charter documents. Each of the Company and the 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, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity
or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects
or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect
on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document
(any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

 

(c)Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by
it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company
and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith
or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which
it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the
terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance
with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification
and contribution provisions may be limited by applicable law.

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(d)No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to
which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby
and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate
or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default
(or an event that with notice or lapse of time or both would become 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 agreement, credit facility, debt or other instrument (evidencing
a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which
any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to 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 or a Subsidiary is subject (including federal and state securities laws and regulations),
or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii)
and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

 

(e)Filings,
Consents and Approvals. The Company is not 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 or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i)
the filings required pursuant to Section 4.4 of this Agreement, (ii) the filing with the Commission of the Prospectus Supplement,
(iii) application(s) to each applicable Trading Market for the listing of the Shares and Warrant Shares for trading thereon in
the time and manner required thereby and (iv) such filings as are required to be made under applicable state securities laws (collectively,
the “Required Approvals”).

 

(f)Issuance
of the Securities; Registration. The Securities are duly authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the
Company. The Warrant Shares, when issued in accordance with the terms of the Warrants, will be validly issued, fully paid and nonassessable,
free and clear of all Liens imposed by the Company. The Company has reserved from its duly authorized capital stock the maximum
number of shares of Common Stock issuable pursuant to this Agreement and the Warrants. The Company has prepared and filed the Registration
Statement in conformity with the requirements of the Securities Act, which became effective on _____________ (the “Effective
Date”), including the Prospectus, and such amendments and supplements thereto as may have been required to the date of
this Agreement. The Registration Statement is effective under the Securities Act and no stop order preventing or suspending the
effectiveness of the Registration Statement or suspending or preventing the use of the Prospectus has been issued by the Commission
and no proceedings for that purpose have been instituted or, to the knowledge of the Company, are threatened by the Commission.
The Company, if required by the rules and regulations of the Commission, proposes to file the Prospectus Supplement(s), with the
Commission pursuant to Rules 424(b) and 430A. At the time the Registration Statement and any amendments thereto became effective,
at the date of this Agreement and at the Closing Date, the Registration Statement and any amendments thereto conformed and will
conform in all material respects to the requirements of the Securities Act and the Prospectus contained therein, and any amendments
or supplements thereto, at time the Prospectus or any amendment or supplement thereto was issued and at the Closing Date, conformed
and will conform in all material respects to the requirements of the Securities Act and did not and will not contain an untrue
statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.

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(g)Capitalization.
The capitalization of the Company is as set forth in the Prospectus. The Company has not issued any capital stock since its most
recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under
the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee
stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the
most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as a result
of the purchase and sale of the Securities, there are no outstanding options, warrants, scrip rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable
for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings
or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common
Stock Equivalents. The issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other
securities to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities to adjust
the exercise, conversion, exchange or reset price under any of such securities except as disclosed in the Prospectus Supplement.
All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable,
have been issued in compliance with all 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 securities. No further approval or authorization of any
stockholder, the Board of Directors or others is required for the issuance and sale of the Securities. There are no stockholders
agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company
is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.

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(h)SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such
material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with
the Prospectus and the Prospectus Supplement, being collectively referred to herein as the “SEC Reports”) 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 dates, the SEC Reports complied in all material respects with the requirements of
the Securities Act and the Exchange Act, as applicable, 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 the light of the circumstances under which they were made, not misleading. The financial statements of the Company
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 United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”),
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 financial position of the Company
and its consolidated Subsidiaries 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, immaterial, year-end audit adjustments.

 

(i)Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included
within the Prospectus, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof or in the Prospectus
(or any Prospectus Supplement), (i) there has been no event, occurrence or development that has had or that could reasonably be
expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other
than (A) trade payables and accrued expenses 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 disclosed in filings made
with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase
or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or
Affiliate, except pursuant to existing Company stock option plans. The Company does not have pending before the Commission any
request for confidential treatment of information. Except for the issuance of the Securities contemplated by this Agreement, no
event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist
with respect to the Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or financial
condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation
is made or deemed made that has not been publicly disclosed at least 1 Trading Day prior to the date that this representation is
made.

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(j)Litigation.
There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”)
which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities
or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. 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 knowledge of the Company, 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 Subsidiary under the Exchange Act or the Securities
Act.

 

(k)Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of
the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’
employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither
the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe
that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or
any Subsidiary, 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 any third party, and the continued employment of each such executive officer does not subject the Company or any of
its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are 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 could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

(l)Compliance.
Neither the Company nor any Subsidiary: (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 Subsidiary under), nor has the
Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any
court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation
of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as
could not have or reasonably be expected to result in a Material Adverse Effect.

    	12

    	 

    
 

(m)Regulatory
Permits. The Company and the 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 described in the SEC Reports,
except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation
or modification of any Material Permit.

 

(n)Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them
and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries,
in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens
for the payment of federal, state or other taxes, for which appropriate reserves have been made therefore in accordance with GAAP
and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by
the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the
Subsidiaries are in compliance.

 

(o)Intellectual
Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights
and similar rights necessary or required for use in connection with their respective businesses as described in the Prospectus
or the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual
Property Rights”). None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that
any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be
abandoned, within two (2) years from the date of this Agreement. Neither the Company nor any Subsidiary has received, since the
date of the latest audited financial statements included within the Prospectus, a written notice of a claim or otherwise has any
knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have or
reasonably be expected to not have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights
are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company
and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their
intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect.

    	13

    	 

    
 

(p)Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including,
but not limited to, directors and officers insurance coverage. Neither the Company nor any Subsidiary has any reason to believe
that it will not be able to renew its 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 without a significant increase in cost.

 

(q)Transactions
With Affiliates and Employees. Except as set forth in the Prospectus, none of the officers or directors of the Company or any
Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to
any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal
property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from
any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess
of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred
on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan of the
Company.

 

(r)Sarbanes-Oxley;
Internal Accounting Controls. The Company and the Subsidiaries is in compliance with any and all requirements of the Sarbanes-Oxley
Act of 2002 that are applicable to the Company and effective as of the date hereof, and any and all rules and regulations promulgated
by the Commission thereunder that are applicable to the Company and effective as of the date hereof and as of the Closing Date.
The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide
reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization,
and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. The Company and the Subsidiaries have established disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls
and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the
Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules
and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of
the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange
Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under
the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over
financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected,
or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.

    	14

    	 

    
 

(s)Certain
Fees. Except as set forth in the Prospectus and Prospectus Supplements, no brokerage or finder’s fees or commissions
are or will be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers
shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees
of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.

 

(t)Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will
not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as
amended. The Company shall conduct its business in a manner so that it will not become an “investment company” subject
to registration under the Investment Company Act of 1940, as amended.

 

(u)Registration
Rights. No Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act
of any securities of the Company or any Subsidiary.

 

(v)Listing
and Maintenance Requirements. The Company has not, in the 12 months preceding the date hereof, received notice from any Trading
Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing
or maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable
future continue to be, in compliance with all such listing and maintenance requirements.

 

(w)Application
of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order 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 certificate of incorporation (or similar charter documents)
or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and
the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation
as a result of the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities.

    	15

    	 

    
 

(x)Disclosure.
The Company confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents
or counsel with any information that it believes constitutes or might constitute material, non-public information which is not
otherwise disclosed in the Prospectus or the Prospectus Supplements. The Company understands and confirms that the Purchasers will
rely on the foregoing representation in effecting transactions in securities of the Company. All of the disclosure furnished by
or on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their respective businesses and the transactions
contemplated hereby, is true and correct in all material respects and does not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under
which they were made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made any representations
or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.

 

(y)Solvency.
Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the
Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds
the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including
known contingent liabilities) as they mature and (ii) the Company’s assets do not constitute unreasonably small capital to
carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular
capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability
thereof. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the
timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances
which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any
jurisdiction within one year from the Closing Date (it being understood that the Company may require additional capital to continue
its operations during such period). The Prospectus sets forth as of the date hereof all outstanding secured and unsecured Indebtedness
of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement,
“Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than
trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations
in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance
sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions
in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under leases required
to be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

 

(z)Tax
Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local
income and all foreign income and franchise 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 and (iii) has set aside on its books provision reasonably adequate for the payment of
all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid
taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or
of any Subsidiary know of no basis for any such claim.

    	16

    	 

    
 

(aa)Foreign
Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent
or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any
unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns
from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person
acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any
provision of FCPA.

 

(bb)Acknowledgment
Regarding Purchasers’ Purchase of Securities. 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
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 Securities. The Company further represents to
each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based
solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

 

(cc)Acknowledgement
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except
for Sections 3.2(e) and 4.14 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been
asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities
of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for
any specified term; (ii) past or future open market or other transactions by any Purchaser, specifically including, without limitation,
Short Sales or “derivative” transactions, before or after the closing of this or future private placement transactions,
may negatively impact the market price of the Company’s publicly-traded securities; (iii) any Purchaser, and counter-parties
in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, presently may have a “short”
position in the Common Stock, and (iv) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s
length counter-party in any “derivative” transaction. The Company further understands and acknowledges that
(y) one or more Purchasers may engage in hedging activities at various times during the period that the Securities are outstanding,
including, without limitation, during the periods that the value of the Warrant Shares deliverable with respect to Securities are
being determined, and (z) such hedging activities (if any) could reduce the value of the existing stockholders' equity interests
in the Company at and after the time that the hedging activities are being conducted.  The Company acknowledges that such
aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.

    	17

    	 

    
 

(dd)Regulation
M Compliance.  The Company has not, and to its knowledge no one acting on its behalf has, (i) 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 Securities, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases
of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any
other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s placement
agent in connection with the placement of the Securities.

 

(ee)FDA.
As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the Federal
Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged,
labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each such product, a “Pharmaceutical
Product”), such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed
by the Company in compliance with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration,
investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices,
good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the
failure to be in compliance would not have a Material Adverse Effect. There is no pending, completed or, to the Company's knowledge,
threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint,
or investigation) against the Company or any of its Subsidiaries, and none of the Company or any of its Subsidiaries has received
any notice, warning letter or other communication from the FDA or any other governmental entity, which (i) contests the premarket
clearance, licensure, registration, or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing
of, the sale of, or the labeling and promotion of any Pharmaceutical Product, (ii) withdraws its approval of, requests the recall,
suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials relating to, any
Pharmaceutical Product, (iii) imposes a clinical hold on any clinical investigation by the Company or any of its Subsidiaries,
(iv) enjoins production at any facility of the Company or any of its Subsidiaries, (v) enters or proposes to enter into a consent
decree of permanent injunction with the Company or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws,
rules or regulations by the Company or any of its Subsidiaries, and which, either individually or in the aggregate, would have
a Material Adverse Effect. The properties, business and operations of the Company have been and are being conducted in all material
respects in accordance with all applicable laws, rules and regulations of the FDA.  The Company has not been informed by the
FDA that the FDA will prohibit the marketing, sale, license or use in the United States of any product proposed to be developed,
produced or marketed by the Company nor has the FDA expressed any concern as to approving or clearing for marketing any product
being developed or proposed to be developed by the Company. 

    	18

    	 

    

 

(ff)Office
of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company's knowledge, any director, officer, agent,
employee or affiliate 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”).

 

(gg)U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the
meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s
request.

 

(hh)Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act
of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the
“Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly
or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or
more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither
the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank
or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

 

(ii)Money
Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with
applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money
Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body
or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge
of the Company or any Subsidiary, threatened.

 

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

 

(a)Organization;
Authority. Such Purchaser is either an individual or an entity duly incorporated or
formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right,
corporate, partnership, limited liability company or similar power and authority to enter into and to consummate the transactions
contemplated by this Agreement and otherwise to carry out its obligations hereunder and thereunder. 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, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser.
Each Transaction Document to which it is a party 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: (i) as limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii)
insofar as indemnification and contribution provisions may be limited by applicable law.

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(b)Understandings
or Arrangements. Such Purchaser is acquiring the Securities as principal for its own
account and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution
of such Securities (this representation and warranty not limiting such Purchaser’s right to sell the Securities pursuant
to the Registration Statement or otherwise in compliance with applicable federal and state securities laws). Such Purchaser is
acquiring the Securities hereunder in the ordinary course of its business.

 

(c)Purchaser
Status. At the time such Purchaser was offered the Securities, it was, and as of the
date hereof it is, and on each date on which it exercises any Warrants, it will be either: (a) a resident of the state of Wisconsin
and either (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities
Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act or (b) an
“institutional investor” as defined within the meaning of the Blue Sky law of its principal place of business.
Such Purchaser is not required to be registered as a broker-dealer under Section 15 of the Exchange Act. 

 

(d)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 Securities, 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 Securities and, at the present time, is able to afford a complete loss
of such investment.

 

(e)Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated
hereunder, such Purchaser has not, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser,
directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the
period commencing as of the time that such Purchaser first received a term sheet (written or oral) from the Company or any other
Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately
prior to the execution hereof. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle
whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no
direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets,
the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that
made the investment decision to purchase the Securities covered by this Agreement. Other than to other Persons party to this Agreement,
such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including
the existence and terms of this transaction). Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein shall
constitute a representation or warranty, or preclude any actions, with respect to the identification of the availability of, or
securing of, available shares to borrow in order to effect Short Sales or similar transactions in the future.

    	20

    	 

    
 

The Company acknowledges
and agrees that the representations contained in Section 3.2 shall not modify, amend or affect such Purchaser’s right to
rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties contained
in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement
or the consummation of the transaction contemplated hereby.

 

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

 

4.1Warrant
Shares. If all or any portion of a Warrant is exercised at a time when there is an
effective registration statement to cover the issuance of the Warrant Shares or if the Warrant is exercised via cashless exercise,
the Warrant Shares issued pursuant to any such exercise shall be issued free of all legends. If at any time following the date
hereof the Registration Statement (or any subsequent registration statement registering the sale of the Warrant Shares) is not
effective or is not otherwise available for the sale of the Warrant Shares, the Company shall promptly notify the holders of the
Warrants in writing that such registration statement is not then effective and thereafter shall promptly notify such holders when
(if) the registration statement is effective again and available for the sale of the Warrant Shares (it being understood and agreed
that the foregoing shall not limit the ability of the Company to issue, or any Purchaser to sell, any of the Warrant Shares in
compliance with applicable federal and state securities laws). 

 

4.2Furnishing
of Information. Until the earliest of the time that (i) no Purchaser owns Securities
or (ii) the Warrants have expired, the Company covenants to 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
even if the Company is not then subject to the reporting requirements of the Exchange Act. 

 

4.3[Reserved].

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4.4Securities
Laws Disclosure; Publicity. The Company shall (a) by 9:00 a.m. (New York City time)
on the Trading Day immediately following the date hereof, issue a press release disclosing the material terms of the transactions
contemplated hereby, and (b) file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the
Commission within the time required by the Exchange Act. From and after the issuance of such press release, the Company represents
to the Purchasers that it shall have publicly disclosed all material, non-public information delivered to any of the Purchasers
by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with
the transactions contemplated by the Transaction Documents. The Company and each Purchaser shall consult with each other in issuing
any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall
issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect
to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the
Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case
the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding
the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing
with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (a)
as required by federal securities law in connection with the filing of final Transaction Documents with the Commission and (b)
to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers
with prior notice of such disclosure permitted under this clause (b).

 

4.5Shareholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent
of the Company, any other Person, that any Purchaser is an “Acquiring Person” under any control share acquisition,
business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement
in effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan
or arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between the Company
and the Purchasers.

 

4.6Non-Public
Information. Except with respect to the material terms and conditions of the transactions
contemplated by the Transaction Documents, the Company covenants and agrees that neither it, nor any other Person acting on its
behalf will provide any Purchaser or its agents or counsel with any information that the Company believes constitutes material
non-public information, unless prior thereto such Purchaser shall have entered into a written agreement with the Company regarding
the confidentiality and use of such information. The Company understands and confirms that each Purchaser shall be relying on the
foregoing covenant in effecting transactions in securities of the Company.

 

4.7Use
of Proceeds. The Company shall use the net proceeds from the sale of the Securities
hereunder as set forth under “Use of Proceeds” in the Prospectus Supplement.

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4.8Indemnification
of Purchasers. Subject to the provisions of this Section 4.8, the Company will indemnify
and hold each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (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 or employees (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 persons (each,
a “Purchaser Party”) 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 Purchaser Party may suffer or incur as a result of
or relating to (a) 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 (b) any action instituted against the Purchaser Parties in any capacity, or any of them
or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser Party, with respect
to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a breach of such Purchaser
Party’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings such
Purchaser Party may have with any such stockholder or any violations by such Purchaser Party of state or federal securities laws
or any conduct by such Purchaser Party which constitutes fraud, gross negligence, willful misconduct or malfeasance). If any action
shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser
Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel
of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel
in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of
such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing,
(ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action
there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and
the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no
more than one such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement (y) for any settlement
by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed;
or (z) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s
breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in
the other Transaction Documents. The indemnification required by this Section 4.8 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements
contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others
and any liabilities the Company may be subject to pursuant to law.

 

4.9Reservation
of Common Stock. As of the date hereof, the Company has reserved and the Company shall
continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for
the purpose of enabling the Company to issue Shares pursuant to this Agreement and Warrant Shares pursuant to any exercise of the
Warrants. 

 

4.10Quotation
of Common Stock. The Company hereby agrees to use best efforts to maintain the quotation
of the Common Stock on the Trading Market on which it is currently quoted, and concurrently with the Closing, the Company shall
promptly secure the quotation of all of the Shares and Warrant Shares on such Trading Market. The Company further agrees, if the
Company applies to have the Common Stock traded on any other Trading Market, it will then include in such application all of the
Shares and Warrant Shares, and will take such other action as is necessary to cause all of the Shares and Warrant Shares to be
listed or quoted on such other Trading Market as promptly as possible. The Company will then take all action reasonably necessary
to continue the listing and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s
reporting, filing and other obligations under the bylaws or rules of the Trading Market. 

    	23

    	 

    
 

4.11[Reserved].

 

4.12Subsequent
Equity Sales. 

 

(a)From
the date hereof until 30 days after the Closing Date, neither the Company nor any Subsidiary shall issue, enter into any agreement
to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents.

 

(b)From
the date hereof until the second anniversary of the closing, the Company shall be prohibited from effecting or entering into an
agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents (or a combination
of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction” means a transaction in
which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for,
or include the right to receive additional shares of Common Stock either (A) at a conversion price, exercise price or exchange
rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares of Common Stock at
any time after the initial issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange price that
is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence
of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock
or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company may issue securities
at a future determined price. Any Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any such
issuance, which remedy shall be in addition to any right to collect damages.

 

(c)Notwithstanding
the foregoing, this Section 4.12 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall
be an Exempt Issuance.

 

4.13Equal
Treatment of Purchasers. No consideration (including any modification of any Transaction
Document) shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of the
Transaction Documents unless the same consideration is also offered to all of the parties to the Transaction Documents. For clarification
purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each
Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers
acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.

    	24

    	 

    
 

4.14Certain
Transactions and Confidentiality. Each Purchaser, severally and not jointly with the
other Purchasers, covenants that neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will
execute any purchases or sales, including Short Sales of any of the Company’s securities during the period commencing with
the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly
announced pursuant to the initial press release as described in Section 4.4.  Each
Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated
by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section 4.4, such
Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included in the
this Agreement and otherwise provided to the Purchasers in connection with this transaction.  Notwithstanding
the foregoing and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and
agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions
in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced
pursuant to the initial press release as described in Section 4.4, (ii) no Purchaser shall be restricted or prohibited from effecting
any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the
transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in
Section 4.4 and (iii) no Purchaser shall have any duty of confidentiality to the Company or its Subsidiaries after the issuance
of the initial press release as described in Section 4.4.  Notwithstanding the foregoing, in the case of a Purchaser
that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s
assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing
other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of assets
managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement.

 

ARTICLE V.

MISCELLANEOUS

 

5.1Termination. 
This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect
whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing
has not been consummated on or before _________ ___, 2012; provided, however,
that no such termination will affect the right of any party to sue for any breach by any other party (or parties).

 

5.2Fees
and Expenses. Except as expressly set forth in the Transaction Documents to the contrary,
each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company
shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction
letter delivered by the Company and any exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied
in connection with the delivery of any Securities to the Purchasers.

 

5.3Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto,
the Prospectus and the Prospectus Supplement, contain the entire understanding of the parties with respect to the subject matter
hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which
the parties acknowledge have been merged into such documents, exhibits and schedules.

    	25

    	 

    
 

5.4Notices.
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 at the facsimile number set forth on the signature pages attached hereto at or prior to 5:30 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 set forth on the signature pages attached hereto on a day that is not a Trading Day or later
than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing,
if sent by U.S. nationally recognized overnight courier service 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 set forth on the signature pages attached hereto.

 

5.5Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended
except in a written instrument signed, by the Company and the Purchasers holding at least majority in interest of the Shares based
on the initial Subscription Amounts hereunder, with any such waiver, modification, supplement or amendment to be binding on all
parties hereto. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed
to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise
of any such right.

 

5.6Headings.
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.

 

5.7Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the
parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of each Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under
this Agreement to any Person to whom such Purchaser assigns or transfers any Securities, provided that such transferee agrees in
writing to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the
“Purchasers.”

 

5.8No
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, except as otherwise set forth in Section 4.8.

    	26

    	 

    
 

5.9Governing
Law. All questions concerning the construction, validity, enforcement and interpretation
of the Transaction Documents 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 legal proceedings concerning
the interpretations, 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, directors, officers, shareholders, partners, members, employees
or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan 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 suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court,
that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably
waives personal service of process and consents to process being served in any such suit, action or 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 other manner permitted
by law. If either party shall commence an action, suit or proceeding to enforce any provisions of the Transaction Documents, then,
in addition to the obligations of the Company under Section 4.8, the prevailing party in such action, suit or proceeding shall
be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding.

 

5.10Survival.
The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.

 

5.11Execution.
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 each 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 or “.pdf”
signature page were an original thereof.

 

5.12Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

    	27

    	 

    
 

5.13Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without
limiting any similar provisions of) any of the other 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; provided,
however, that in the case of a rescission of an exercise of a Warrant, the
applicable Purchaser shall be required to return any shares of Common Stock subject to any such rescinded exercise notice concurrently
with the return to such Purchaser of the aggregate exercise price paid to the Company for such shares and the restoration of such
Purchaser’s right to acquire such shares pursuant to such Purchaser’s Warrant (including, issuance of a replacement
warrant certificate evidencing such restored right).

 

5.14Replacement
of Securities. If any certificate or instrument evidencing any Securities is mutilated,
lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation
thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt
of evidence reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance
of such replacement Securities.

 

5.15Remedies.
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 will 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 contained in the
Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any such obligation
the defense that a remedy at law would be adequate.

 

5.16Payment
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 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.

    	28

    	 

    
 

5.17Independent
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 or non-performance of the obligations of any other Purchaser under any Transaction Document.
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 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. Each Purchaser
has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents. For reasons
of administrative convenience only, each Purchaser and its respective counsel have chosen to communicate with the Company through
EGS. EGS does not represent any of the Purchasers and only represents Rodman & Renshaw, LLC, the placement agent for the offering.
The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company
and not because it was required or requested to do so by any of the Purchasers. It is expressly understood and agreed that each
provision contained in this Agreement and in each other Transaction Document is between the Company and a Purchaser, solely, and
not between the Company and the Purchasers collectively and not between and among the Purchasers.

 

5.18Saturdays,
Sundays, Holidays, etc.If the last or appointed day for the taking of any action
or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right
may be exercised on the next succeeding Business Day.

 

5.19Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and
every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after
the date of this Agreement.

 

5.20WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT
BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE
LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY. 

 

 

 

(Signature Pages Follow)

    	29

    	 

    
 

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.

 

 

	
        novelos therapeutics,
        inc.

         

         
	Address for Notice:
	
        By:__________________________________________

             Name:

             Title:

        With a copy to (which shall not constitute notice):
	Fax:
	
         

         

         

         
	 

 

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

    	30

    	 

    
 

[PURCHASER SIGNATURE PAGES TO nvlt
SECURITIES PURCHASE AGREEMENT]

 

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

 

 

Name of Purchaser: ________________________________________________________

 

Signature of Authorized Signatory of
Purchaser: _________________________________

 

Name of Authorized Signatory: _______________________________________________

 

Title of Authorized Signatory: ________________________________________________

 

Email Address of Authorized Signatory:_________________________________________

 

Facsimile Number of Authorized Signatory: __________________________________________

 

Address for Notice to Purchaser:

 

 

 

Address for Delivery of Securities to Purchaser (if not same
as address for notice):

 

 

 

Subscription Amount: $_________________

 

Shares: _________________

 

Class A Warrant Shares: __________________

 

Class B Warrant Shares: __________________

 

EIN Number: _______________________

 

o
Notwithstanding anything contained in this Agreement to the contrary, by checking this box (i) the obligations of the above-signed
to purchase the securities set forth in this Agreement to be purchased from the Company by the above-signed, and the obligations
of the Company to sell such securities to the above-signed, shall be unconditional and all conditions to Closing shall be disregarded,
(ii) the Closing shall occur on the third (3rd) Trading Day following the date of this Agreement and (iii) any condition
to Closing contemplated by this Agreement (but prior to being disregarded by clause (i) above) that required delivery by the Company
or the above-signed of any agreement, instrument, certificate or the like or purchase price (as applicable) shall no longer be
a condition and shall instead be an unconditional obligation of the Company or the above-signed (as applicable) to deliver such
agreement, instrument, certificate or the like or purchase price (as applicable) to such other party on the Closing Date.

 

[SIGNATURE PAGES CONTINUE]

    	31Execution Copy

 

SECURITIES PURCHASE AGREEMENT 

 

This Securities Purchase
Agreement (this “Agreement”) is dated as of May 31, 2012, by and among BNC Bancorp., a corporation organized
under the laws of North Carolina (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 is executing and delivering this Agreement in reliance upon the exemption from securities registration
afforded by Section 4(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, (i) that aggregate number of shares of the Company’s mandatorily convertible cumulative non-voting perpetual
preferred stock, Series C, $1,000.00 liquidation preference per share (the “Series C Preferred Stock”) and (ii)
that aggregate number of shares of the Company’s mandatorily convertible cumulative non-voting perpetual preferred stock,
Series B-1, $1,000.00 liquidation preference per share (the “Series B-1 Preferred Stock”, and together with
the Series C Preferred Stock, the “Preferred Stock”), set forth below such Purchaser’s name on the signature
page of this Agreement (which aggregate amount for all Purchasers together shall be 38,885 shares of Series C Preferred Stock and
8,200 shares of Series B-1 Preferred Stock, and such shares of Series C Preferred Stock and Series B-1 Preferred Stock shall be
collectively referred to herein as the “Preferred Shares”). When purchased, the Preferred Stock will have the
terms set forth in (i) the articles of amendment for the Series C Preferred Stock to be issued to the Purchasers in the form attached
as Exhibit A-1 hereto (the “Series C Preferred Stock Articles of Amendment”) and, (ii) the articles of
amendment for the Series B-1 Preferred Stock to the Purchasers in the form attached hereto as Exhibit A-2 (the “Series
B-1 Preferred Stock Articles of Amendment”, and together with the Series C Preferred Stock Articles of Amendment, the
“Articles of Amendment”) each made a part of the Company’s Articles of Incorporation, as amended
(the “Articles of Incorporation”), by the filing of the Articles of Amendment with the North Carolina Department
of the Secretary of the State (the “Secretary of State”). The Series C Preferred Stock will be convertible into
shares of voting common stock, no par value (the “Voting Common Stock”), of the Company, and the Series B-1
Preferred Stock will be convertible into shares of non-voting common stock, no par value (the “Non-Voting Common Stock”
and together with the Voting Common Stock, the “Common Stock”) of the Company, in each case, subject to and
in accordance with the terms and conditions of the Articles of Amendment. The Non-Voting Common Stock will be convertible into
Voting Common Stock in accordance with the terms of the Articles of Incorporation. The Shares of Common Stock into which the Preferred
Stock is convertible and the shares of Voting Common Stock into which the Non-Voting Common Stock is convertible are referred to
herein as the “Underlying Shares” and the Underlying Shares and the Preferred Shares are referred to herein,
collectively, as the “Securities”.

 

C.           The
Company has engaged Keefe, Bruyette & Woods, Inc. as its lead placement agent (the “Lead Placement Agent”)
and Sandler O’Neill & Partners, L.P. as a co-placement agent (the “Co-Placement Agent”, and together
with the Lead Placement Agent, the “Placement Agents”) for the offering of the Securities.

 

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 B (the “Registration Rights Agreement”), pursuant to which, among
other things, the Company will agree to provide certain registration rights with respect to the Securities under the Securities
Act and the rules and regulations promulgated thereunder and applicable state securities laws.

 

    	 

    	 

    

 

NOW, THEREFORE, IN
CONSIDERATION of the mutual covenants 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
1:

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 action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition) or
investigation 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.

 

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

 

“Articles
of Amendment” has the meaning set forth in the Recitals.

 

“Articles
of Incorporation” has the meaning set forth in the Recitals.

 

“Aquiline”
means Aquiline BNC Holdings LLC and its Affiliates.

 

“Bank”
has the meaning set forth in Section 3.1(a).

 

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

 

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

 

“Closing”
has the meaning set forth in Section 2.1(b)

 

“Closing Date”
means June 8, 2012, or such other date as the parties may agree.

 

“Code”
means the Internal Revenue Code of 1986, as amended, including the regulations and published interpretations thereunder.

 

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

 

    	2

    	 

    

 

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

 

“Company Counsel”
means Womble Carlyle Sandridge & Rice, LLP.

 

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

 

“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.

 

“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.

 

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

 

“DTC”
means The Depository Trust Company.

 

“Effectiveness
Date” has the meaning set forth in Section 6.16. “Environmental Laws” has the meaning set forth in
Section 3.1(1).

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations
thereunder.

 

“ERISA Affiliate”,
as applied to the Company, means any Person under common control with the Company, who together with the Company, is treated
as a single employer within the meaning of Section 414(b), (c), (m) or (0) of the Code.

 

“Escrow Agent”
has the meaning set forth in Section 2.1(b).

 

“Escrow Agreement”
has the meaning set forth in Section 2.1(b).

 

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

 

“FDIC”
means the Federal Deposit Insurance Corporation.

 

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

 

“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).

 

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

 

“Investment
Agreement” has the meaning set forth in Section 3.1(g).

 

    	3

    	 

    

 

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

 

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

 

“Management
Rights Letter” means that certain management rights letter, dated as of even date herewith, by and between the Company
and Patriot.

 

“Material
Adverse Effect” means any of (i) a material and adverse effect on the legality, validity or enforceability of this Agreement,
the Registration Rights Agreement, the Articles of Amendment, or the Escrow Agreement (ii) a material and adverse effect on the
results of operations, assets, properties, business, condition (financial or otherwise) of the Company and the Subsidiaries, taken
as a whole, or (iii) any adverse impairment to the Company’s ability to perform in any material respect on a timely basis
its obligations under this Agreement, the Registration Rights Agreement, the Articles of Amendment or the Escrow Agreement; provided,
that in determining whether a Material Adverse Effect has occurred, there shall be excluded any effect to the extent resulting
from the following: (A) changes, after the date hereof, in U.S. GAAP or regulatory accounting principles generally applicable to
banks, savings associations or their holding companies, (B) changes, after the date hereof, in applicable laws, rules and regulations
or interpretations thereof by any court, administrative agency or other governmental authority, whether federal, state, local or
foreign, or any applicable industry self-regulatory organization, (C) actions or omissions of the Company expressly required by
the terms of this Agreement or taken with the prior written consent of an affected Purchaser, (D) changes, after the date hereof,
in general economic, monetary or financial conditions, (E) changes in the market price or trading volumes of the Common Stock (but
not the underlying causes of such changes), (F) changes in global or national political conditions, including the outbreak or escalation
of war or acts of terrorism and (G) the public disclosure of this Agreement or the transactions contemplated hereby; except, with
respect to clauses (A), (B), (D) and (F), to the extent that the effects of such changes have a disproportionate effect on the
Company and the Subsidiaries, taken as a whole, relative to other similarly situated banks, savings associations or their holding
companies generally.

 

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

 

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

 

“Multiemployer
Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which the Company or any
ERISA Affiliate is making, or is accruing an obligation to make, contributions or has made, or been obligated to make, contributions
within the preceding six (6) years.

 

“NASDAQ”
means the NASDAQ Capital Market.

 

“NCCOB”
North Carolina Commissioner of Banks.

 

“New
York Court” ” has the meaning set forth in Section 6.8. 

  

“NYSE”
means the New York Stock Exchange.

 

“Outside Date”
means Friday, June 29, 2012.

 

    	4

    	 

    

 

“Patriot”
means, collectively, Patriot Financial Partners, L.P. and Patriot Financial Partners Parallel, L.P.

 

“Pension Plan”
means any employee pension benefit plan within the meaning of Section 3(2) of ERISA, other than a Multiemployer Plan, which is
subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA and which (i) is maintained for
employees of the Company or any of its ERISA Affiliates or (ii) has at any time during the last six (6) years been maintained for
the employees of the Company or any current or former ERISA Affiliate.

 

“Person”
means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company,
joint venture, sole proprietorship, unincorporated organization or governmental authority.

 

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

 

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

 

“Preferred
Stock” 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 NASDAQ.

 

“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 $1,000.00 per Preferred 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(mm).

 

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

 

“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
of State” has the meaning set forth in the Recitals.

 

    	5

    	 

    

 

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

 

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

 

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

 

“Series B-1
Preferred Stock Articles of Amendment” has the meaning set forth in the Recitals.

 

“Series C
Preferred Stock Articles of Amendment” has the meaning set forth in the Recitals.

 

“Series B-1
Preferred Stock” has the meaning set forth in the Recitals.

 

“Series C
Preferred Stock” has the meaning set forth in the Recitals.

 

“Shareholder
Approvals” has the meaning set forth in Section 4.11.

 

“Shareholder
Proposals” has the meaning set forth in Section 4.11.

 

“Subscription
Amount” means with respect to each Purchaser, the aggregate amount to be paid for the Preferred 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 any 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 (other than the OTC Bulletin
Board), or (ii) if the Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common
Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is not 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), (ii) and (iii) hereof, then Trading
Day shall mean a Business Day.

 

“Trading Market”
means whichever of the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market, the NYSE, the NYSE MKT,
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, the Articles
of Amendment, the Escrow Agreement and any other documents or agreements executed in connection with the transactions contemplated
hereunder. With respect to Patriot only, “Transaction Documents” shall also include the Management Rights Letter.

 

“Transfer
Agent” means Registrar and Transfer Company, or any successor transfer agent for the Company.

 

“Treasury
Warrant” has the meaning set forth in Section 3.1(g).

 

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

 

    	6

    	 

    

 

Article
2:

 

PURCHASE AND SALE 

 

2.1         Closing.

 

(a)          Purchase
of Preferred 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 Preferred Shares set forth below such Purchaser’s name on the signature page of this Agreement at a per Preferred
Share price equal to the Purchase Price. Notwithstanding the above, no Purchasers shall be obligated to purchase any Preferred
Shares to the extent such purchase would result such Purchaser’s aggregate ownership of equity for purposes of the BHCA and
the Change in Bank Control Act exceeding (i) 9.9% of the number of shares of Voting Common Stock issued and outstanding or
(ii) 24.9% of the total shareholders’ equity of the Company.

 

(b)          Escrow.
On or prior to 10:00 a.m. New York City time on the Closing Date, (i) each Purchaser has (A) deposited the Subscription Amount
with SunTrust Bank as Escrow Agent (the “Escrow Agent”), pursuant to that certain Escrow Agreement (in
the form attached hereto as Exhibit H) between the Company and Escrow Agent (as it may be amended or otherwise modified
from time to time, the “Escrow Agreement”), and (ii) the Company has issued instructions to the Transfer Agent
authorizing the issuance in certificated form of the number of Preferred Shares specified on such Purchaser’s signature page
hereto (the “Stock Certificates”), or as otherwise set forth on the Stock Certificate Questionnaire included
as Exhibit C-2 hereto concurrent with the Escrow Agent’s release of the Subscription Amount to the Company pursuant to the
Escrow Agreement.

 

(c)          Closing
Date.

 

(i)          The
Closing of the purchase and sale of the Preferred Shares shall take place at 10:00 a.m., New York City time, at the offices of
Company Counsel, on the Closing Date or remotely by facsimile transmission or other electronic means or at such other time or location
as the parties may mutually agree, but not later than the Outside Date. The “Closing” means the release of funds and
issuance by the Company of Preferred Shares as contemplated hereby, all of which shall be deemed to have happened concurrently.

 

(ii)         Pursuant
to the terms of the Escrow Agreement, on the Closing Date, the Escrow Agent shall release the Subscription Amount to the Company
and the Transfer Agent shall issue the Preferred Shares to each Purchaser as provided in the instructions referred to in paragraph (b)
above.

 

2.2         Closing
Deliveries.

 

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

 

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

 

    	7

    	 

    

 

(ii)         the
Company shall cause the Transfer Agent to issue, in book-entry form
the number of Preferred Shares specified on such Purchaser’s signature page hereto (or, if the Company and such Purchaser
shall have agreed, as indicated on such Purchaser’s signature pages hereto, that such Purchaser will receive Stock Certificates
for their Preferred Shares, then the Company shall instead instruct the Transfer Agent to issue such specified Stock Certificates
registered in the name of such Purchaser or as otherwise set forth on the Stock Certificate Questionnaire); 

 

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

 

(iv)        the
Registration Rights Agreement, duly executed by the Company (which shall be delivered on the date hereof);

 

(v)         the
Escrow Agreement duly executed by the Company and the Escrow Agent (which shall be delivered on the date hereof);

 

(vi)        a
certificate of the Secretary of the Company, in the form attached hereto as Exhibit E (the “Secretary’s Certificate”),
dated as of the Closing Date, (a) certifying the resolutions adopted by the Board of Directors of the Company or a duly authorized
committee thereof approving the transactions contemplated by this Agreement and the other Transaction
Documents and the issuance of the Securities, (b) certifying the current version of the Articles of Incorporation, as amended,
and by-laws, 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; 

 

(vii)       the
Compliance Certificate referred to in Section 5.l(f); and.

 

(viii)      with
respect to Patriot only, the Management Rights Letter duly executed by the Company (which shall be delivered on the date hereof).

 

(b)          Each
Purchaser shall deliver or cause to be delivered to the Company or the Escrow Agent, as applicable, on or prior to the Closing
Date, the following (the “Purchaser Deliverables”): 

 

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

 

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

 

(iii)        a
fully completed and duly executed Accredited Investor Questionnaire, reasonably satisfactory to the
Company, and the Stock Certificate Questionnaire in the forms attached hereto as Exhibits C-1 and C-2 , respectively;

 

(iv)        its
Subscription Amount, in United States dollars and in immediately available funds, in the amount indicated below such Purchaser’s
name on the applicable signature page hereto under the heading “Aggregate Purchase Price (Subscription Amount)” by
wire transfer to the Escrow Account in accordance with the Escrow Agent’s written instructions; and

 

(v)         the
Management Rights Letter, duly executed by Patriot.

 

    	8

    	 

    

 

Article
3:

 

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 as set forth in Exhibit G. 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. No equity security of any Subsidiary
is or may be required to be issued by reason of any option, warrant, scrip, preemptive right, right to subscribe to, gross-up right,
call or commitment of any character whatsoever relating to, or security or right convertible into, shares of any capital stock
of such Subsidiary, and there are no contracts, commitments, understandings or arrangements by which any Subsidiary is bound to
issue additional shares of its capital stock, or any option, warrant or right to purchase or acquire any additional shares of its
capital stock. Except in respect of the Subsidiaries, the Company does not beneficially own, directly or indirectly, more than
5% of any class of equity securities or similar interests of any corporation, bank, business trust, association or similar organization,
and is not, directly or indirectly, a partner in any partnership or party to any joint venture. The Company beneficially owns all
of the outstanding capital securities and has sole Control of the Bank of North Carolina (the “Bank”).

 

(b)          Organization
and Qualification. The Company and each of its “Significant Subsidiaries” (as defined
in Rule 1-02 of Regulation S-X) (“Significant 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 Significant Subsidiary is in violation of any of the provisions of its respective articles
or certificate 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 in the reasonable judgment of the Company be expected to
have a Material Adverse Effect. The Company is duly registered as a bank holding company under the Bank Holding Company Act of
1956, as amended (the “BHCA”). The Bank’s deposit accounts 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 (after giving effect
to any applicable extensions). The Company and each of its Significant Subsidiaries have conducted their respective businesses
in compliance with all applicable federal, state and foreign laws, orders, judgments, decrees, rules, regulations and applicable
stock exchange requirements, including all laws and regulations restricting activities of bank holding companies and banking organizations,
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. 

 

    	9

    	 

    

 

(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 Preferred Shares in accordance with the terms hereof and, subject to the
Shareholder Approvals, to issue the Underlying Shares in accordance with the Articles of Amendment. The Company’s execution
and delivery of each of the Transaction Documents to which it is a party and the consummation by it of the transactions contemplated
hereby and thereby (including, but not limited to, the sale and delivery of the Preferred Shares and the Underlying 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 of Directors or its shareholders in connection therewith other than in connection with the Required Approvals.
Each of the Transaction Documents to which it is a party has been (or upon delivery will have been) duly executed by the Company
and is, or when delivered in accordance with the terms hereof, 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 indemnification and contribution provisions
may be limited by applicable law. Except for Material Contracts, there are no shareholder agreements, voting agreements, or other
similar arrangements 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 to
which it is a party and the consummation by the Company of the transactions contemplated hereby or thereby (including, without
limitation, the issuance of the Preferred Shares and the Underlying Shares) do not and will not (i) conflict with or violate any
provisions of the Company’s or any Subsidiary’s articles or certificate 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 Significant 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 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 regulations and the rules and regulations, 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 all applicable
Trading Markets), 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. Neither
the investment by Purchasers in the Preferred Shares nor the issuance of Voting Common Stock upon the conversion of the Series
C Preferred Stock and the Non-Voting Common Stock, or the issuance of the Non-Voting Common Stock triggers any change of control
provisions of any Material Contract.

 

    	10

    	 

    

 

(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 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 Preferred Shares and the Underlying Shares), other than (i) obtaining the Shareholder
Approvals to issue the Underlying Shares in accordance with the terms of the applicable Articles of Amendment, (ii) the filing
of each of the Articles of Amendment with the Secretary of State, (iii) the filing with the Commission of one or more Registration
Statements in accordance with the requirements of the Registration Rights Agreement, (iv) filings required by applicable state
securities laws, (v) the filing of a Notice of Exempt Offering of Securities on Form D with the Commission under Regulation D of
the Securities Act, (vi) the filing of any requisite notices and/or application(s) to the Principal Trading Market for the issuance
and sale of the Underlying Shares and the listing of the Underlying Shares for trading or quotation, as the case may be, thereon
in the time and manner required thereby, (vii) the filings required in accordance with Section 4.6 of this Agreement and (viii)
those that have been made or obtained prior to the date of this Agreement (collectively, the “Required Approvals”).

 

(f)          Issuance
of the Preferred Shares. The issuance of the Preferred Shares has been duly authorized
and the Preferred 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 provided for
in the Transaction Documents or imposed by applicable securities laws, shall not subject the holders thereof to personal liability
and shall not be subject to preemptive or similar rights. The issuance of the Underlying Shares has been duly authorized and the
Underlying Shares, when issued in accordance with the terms of the applicable Articles of Amendment, will be duly and validly issued,
fully paid and non-assessable and free and clear of all Liens, other than restrictions on transfer provided for in the Transaction
Documents or imposed by applicable securities laws, 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 Securities will be issued in compliance with all
applicable federal and state securities laws. 

 

(g)          Capitalization.
The authorized capital stock of the Company consists of (i) 80,000,000 shares of common stock and (ii) 20,000,000 shares of preferred
stock of which 31,260 shares were designated as Series A Preferred Stock and 1,804,566 shares were designated as Series B Preferred
Stock. 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) has
been set forth in the SEC Reports and has changed since the date of such SEC Reports only due to stock grants or other equity awards
or stock option and warrant exercises that do not, individually or in the aggregate, have a material effect on the issued and outstanding
capital stock, options and other securities. 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 outstanding warrant issued to the United
States Department of the Treasury to purchase 543,337 shares of common stock (the “Treasury Warrant”), the Investment
Agreement dated as of June 14, 2010 between the Company and Aquiline BNC Holdings (the “Investment Agreement”),
and the SEC Reports: (i) no shares of the Company’s outstanding capital stock are subject to preemptive rights or any other
similar rights; (ii) 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 a Significant Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or a
Significant Subsidiary is or may become bound to issue additional shares of capital stock of the Company or a Significant Subsidiary
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 or a Significant Subsidiary,
other than those issued or granted pursuant to Material Contracts or equity or incentive plans or arrangements described in the
SEC Reports; (iii) there are no material outstanding debt securities, notes, credit agreements, credit facilities or other agreements,
documents or instruments evidencing indebtedness of the Company or a Significant Subsidiary or by which the Company or a Significant
Subsidiary is bound; (iv) except for the Registration Rights Agreement and the agreements set forth on Exhibit I hereto,
there are no agreements or arrangements under which the Company or a Significant Subsidiary is obligated to register the sale of
any of its securities under the Securities Act; (v) 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
or a Significant Subsidiary is or may become bound to redeem a security of the Company or a Significant Subsidiary; (vi) neither
the Company nor any Significant Subsidiary has any stock appreciation rights or “phantom stock” plans or agreements
or any similar plan or agreement; and (vii) neither the Company nor any Significant Subsidiary has 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 of the Company containing
anti-dilution or similar provisions that will be triggered by the issuance of the Securities. On or about the date of this Agreement,
the Company is executing a separate securities purchase agreement with Aquiline for the issue and sale, in the aggregate of 21,115
shares of Series B-1 Preferred Stock and 4,300 shares of Series C Preferred Stock.

 

    	11

    	 

    

 

(h)          SEC
Reports. 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 l3(a) or 15(d) thereof, since January 1, 2010 (the foregoing materials, including
the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”),
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 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. On April 26, 2012, the Company filed an S-4 Registration Statement in connection with the proposed merger of KeySource
Financial Inc. with and into the Company according to the terms of an Agreement and Plan of Merger dated December 21, 2011; such
registration statement contains important information about the Company’s Common Stock and certain other material information
about the Company. The Company advises any Purchaser to read such registration statement, in particular the sections entitled “Risk
Factors,” “Description of BNC Capital Stock” and “Information about BNC.” On April 16, 2012,
the Company filed a Definitive Proxy Statement in connection with the proposed (i) amendment to the Company’s Articles of
Incorporation to create a class of non-voting common stock; (ii) amendment to the Company’s Articles of Incorporation to
amend the terms of the Company’s Mandatorily Convertible Non-voting Preferred Stock, Series B, and (iii) issuance of non-voting
common stock to Aquiline; such Proxy Statement contains important information about the Company. The SEC Reports, including the
documents incorporated by reference in each of them, each contained substantially all of the information required to be included
in it. No executive officer of the Company has failed in any respect to make the certifications required of him or her under Section
302 or 906 of the Sarbanes-Oxley Act of 2002.

 

(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 consolidated 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. 

 

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

 

(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, and (vi) there has not been any material change
or amendment to, or any waiver of any material right by the Company under, any Material Contract under which the Company or any
of its Subsidiaries is bound or subject. Except for the transactions contemplated by this Agreement, 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) is liable for any off-site disposal or contamination pursuant to
any Environmental Laws, or (iii) 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 there is no pending or , to the Company’s Knowledge, 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 Preferred Shares or (ii) 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 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.

 

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(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 Significant Subsidiary which would have or reasonably be expected to have a Material
Adverse Effect. 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 and each of its Significant Subsidiaries are 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 which the Company has been made aware in writing of any court, arbitrator or governmental
body having jurisdiction over the Company or its properties or assets, or (iii) is in violation of, or in receipt of written notice
that it is in violation of, any statute, rule or regulation of any governmental authority applicable to the Company, or which would
have the effect of revoking or limiting FDIC deposit insurance, except in each case 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 or have applied for all certificates,
authorizations, consents 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 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. 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 buildings by the Company and its
Subsidiaries.

 

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(r)          Patents
and Trademarks. The Company and its Subsidiaries own, possess, license, or can acquire on
reasonable terms, 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 now conducted, 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, (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, to the Company’s Knowledge, threatened action, suit, proceeding
or claim by others challenging the Company’s and its Subsidiaries’ rights in or to any such Intellectual Property;
(d) there is no pending or, to the Company’s Knowledge, threatened action, suit, proceeding or claim by others challenging
the validity or scope of any such Intellectual Property; and (e) there is no Proceeding by others that the Company and/or any Subsidiary
infringes or otherwise violates any patent, trademark, copyright, trade secret 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. 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 not have a Material Adverse Effect. 

 

(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. 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. 

 

(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 are
effective. 

 

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(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 Agents with
respect to the offer and sale of the Preferred Shares (which Placement Agents’ fees are being paid by the Company). 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 Securities by the Company to the Purchasers
under the Transaction Documents. The issuance and sale of the Preferred Shares hereunder does not contravene the rules and regulations
of the Principal Trading Market and, upon the receipt of the Shareholder Approvals, the issuance of the Underlying Shares in accordance
with the applicable Articles of Amendment will not contravene the rules and regulations of the Principal Trading Market. 

 

(y)          Registration
Rights. Other than each of the Purchasers and as set forth on Exhibit I, no Person has any right to cause the Company
to effect the registration under the Securities Act of any securities of the Company other than those securities which are currently
registered on an effective registration statement on file with the Commission.

 

(z)           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 written notice from any Trading Market on which the Common
Stock is listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such
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. 

 

(aa)         Investment
Company. Neither the Company nor any of its Subsidiaries is required to be registered as,
and immediately following the Closing will not be required to register as, an “investment company” within the meaning
of the Investment Company Act of 1940, as amended, and neither the Company nor any Subsidiary sponsors any person that is such
an investment company. 

 

(bb)        Unlawful
Payments. Neither the Company nor any of its Subsidiaries, nor to the Company’s Knowledge,
any directors, officers, 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 Significant 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. 

 

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(cc)        Application
of Takeover Protections: Rights Agreements. The Company has not adopted any shareholder 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 of Directors have taken all necessary action, if any, in order to render inapplicable Article 9 and Article
9A of the North Carolina Business Corporation Act or any other 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,
including Article VII thereof, or other organizational documents or the laws of North Carolina or otherwise which is or could become
applicable to any Purchaser solely as a result of the transactions contemplated by this Agreement, including, without limitation,
the Company’s issuance of the Securities and any Purchaser’s ownership of the Securities. 

 

(dd)       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, including the Placement Agents, any Purchaser or
its respective agents or counsel (other than Aquiline and Patriot) 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 and insofar as the existence of ongoing negotiations
regarding a potential acquisition by the Company 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 (other
than Aquiline and Patriot) will rely on the representations in this Section 3.1(dd) 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 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 and/or as may otherwise be disclosed on the Form 8-K filed pursuant to Section 4.6.

 

(ee)        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. 

 

(ff)         Acknowledgment
Regarding Purchasers’ Purchase of Preferred 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 of the Purchasers 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 Preferred Shares. 

 

(gg)       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 Securities. 

 

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(hh)        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 use the proceeds of the sale of the Preferred Shares, towards any sales or operations in Cuba, Iran, Syria,
Sudan, Myanmar or any other 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. 

 

(ii)          Money
Laundering Laws. The operations of each of the Company and any Subsidiary are in compliance in all material respects 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.

 

(jj)          Reports,
Registrations and Statements. Since December 31, 2009, 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 FRB, the NCCOB and the FDIC and any other applicable federal or state securities or banking authorities, except where
the failure to file any such report, registration or statement would not have or reasonably be expected to have a Material Adverse
Effect. All such reports and statements filed with any such regulatory body or authority are collectively referred to herein as
the “Company Reports.” As of their respective dates, the Company Reports complied in all material respects with
all the rules and regulations promulgated by the FRB, the NCCOB and the FDIC and any other applicable foreign, federal or state
securities or banking authorities, as the case may be. 

 

(kk)        Adequate
Capitalization. As of March 31, 2012, the Bank meets or exceeds the standards necessary to be considered “well capitalized”
under the FDIC’s regulatory framework for prompt corrective action.

 

(ll)          Agreements
with Regulatory Agencies: Compliance with Certain Banking Regulations. 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, 2008, 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 Subsidiary been advised since December 31, 2010 by any governmental entity that it intends to issue,
initiate, order, or request any such Regulatory Agreement.

 

The Company has
no knowledge of any facts and circumstances, and has no knowledge of any facts or circumstances exist, that would cause its Subsidiary
banking institutions: (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 operating in violation, in any material respect, of the Bank Secrecy Act, the Patriot Act, any order issued with respect
to anti-money laundering by OFAC, or any other anti-money laundering statute, rule or regulation; or (iii) not to be in satisfactory
compliance, in any material respect, with all applicable privacy of customer information requirements contained in any applicable
federal and state privacy laws and regulations as well as the provisions of all information security programs adopted by the Subsidiary.

 

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(mm)      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 under the Securities Act) in connection with any offer or sale of the Preferred Shares.

 

(nn)       Risk
Management Instruments. Except as has not had or would not reasonably be expected to have a Material Adverse Effect, since
January 1, 2011, 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 Subsidiaries, enforceable in accordance
with its terms. Neither the Company nor the 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.

 

(oo)        ERISA.
The Company and each ERISA Affiliate is in compliance in all material respects with all presently applicable provisions of ERISA;
no “reportable event” described in Section 4043 of ERISA (other than an event for which the 30-day notice requirement
has been waived by applicable regulation) has occurred with respect to any Pension Plan 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 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.

 

(pp)       Reservation
of Underlying Shares. The Company will reserve, free of any preemptive or similar rights of shareholders of the Company, a
number of unissued shares of Common Stock (voting and non-voting), sufficient to issue and deliver the Underlying Shares into which
the Preferred Shares are convertible upon the Shareholder Approvals.

 

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

 

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

 

(ss)        No
Additional Agreements. The Company has no other agreements or understandings (including, without limitation, side letters)
with any Purchaser to purchase Preferred Shares on terms that are different from those set forth herein, except for a side letter
with Patriot regarding the method of funding of the Subscription Amount.

 

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(tt)        
Receipt of FDIC Consent. The Company has received consent from the FDIC as required by Section 6.2 of the Shared Loss Agreement
entered into between the Bank of North Carolina and the FDIC, as receiver for Beach First National Bank, for the private placement
of up to $72.5 million in new capital. A copy of this consent has been provided to the Placement Agents and their legal advisors.

 

3.2         Representations
and Warranties of the Purchasers. Each Purchaser hereby, for itself and for no other Purchaser,
represents and warrants 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 or partnership 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, delivery 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, the Registration Rights Agreement and the Escrow 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, the Registration Rights Agreement and
the Escrow 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.

 

(c)          Investment
Intent. Such Purchaser understands that the Preferred Shares are “restricted securities” and have not been registered
under the Securities Act or any applicable state securities law and is acquiring the Preferred Shares as principal for its own
account and not with a view to, or for distributing or reselling such Preferred Shares or any part thereof in violation of the
Securities Act or any applicable state securities laws, provided, that by making the representations herein, other than as set
forth herein, such Purchaser does not agree to hold any of the Preferred 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 Preferred 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 Preferred 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 Securities (or any securities which are derivatives thereof) to or through any Person or entity.

 

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(d)          Purchaser
Status. At the time such Purchaser was offered the Preferred Shares, it was, and at the date hereof it is, an “accredited
investor” as defined in Rule 501(a) under the Securities Act. Such Purchaser has provided the information in the Accredited
Investor Questionnaire attached hereto as Exhibit C-1.

 

(e)          Reliance.
The Company and the Placement Agents (on behalf of its client) will be entitled to rely upon this Agreement and are irrevocably
authorized to produce this Agreement or a copy hereof to (A) any regulatory authority having jurisdiction over the Company and
its affiliates and (B) any interested party in any administrative or legal proceeding or official inquiry with respect to the matters
covered hereby, in each case, to the extent required by any court or governmental authority to which the Company is subject, provided
that the Company provides the Purchaser with prior written notice of such disclosure.

 

(f)          General
Solicitation. Purchaser: (i) became aware of the offering of the Preferred Shares, and the Preferred Shares were offered to
Purchaser, solely by direct contact between Purchaser and the Company or either of the Placement Agents, and not by any other means,
including any form of “general solicitation” or “general advertising” (as such terms are used in Regulation
D promulgated under the Securities Act and interpreted by the Commission); (ii) reached its decision to invest in the Company independently
from any other Purchaser; (iii) has entered into no agreements with shareholders of the Company or other subscribers for the purpose
of controlling the Company or any of its subsidiaries; and (iv) has entered into no agreements with shareholders of the Company
or other subscribers regarding voting or transferring Purchaser’s interest in the Company.

 

(g)          Direct
Purchase. Purchaser is purchasing Preferred Shares directly from the Company and not from the Placement Agents. Neither of
the Placement Agents made any representations, declarations or warranties to Purchaser, express or implied, regarding the Preferred
Shares, the Company or the Company’s offering of the Preferred Shares, and neither of the Placement Agents offered to sell,
or solicited an offer to buy, any of the Preferred Shares that Purchaser proposes to acquire from the Company hereunder.

 

(h)          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 Preferred 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 Preferred Shares and, at the present time, is able to afford a complete loss of such investment.

 

(i)          Access
to Information. 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 Preferred Shares and the merits and risks of investing in the Preferred 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 management. Neither such inquiries nor any other investigation
conducted by or on behalf of such Purchaser or its representatives or counsel shall modify, amend or affect such Purchaser’s
right to rely on the truth, accuracy and completeness of 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 Preferred Shares. Purchaser acknowledges that none of the Company nor either of the Placement
Agents 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.

 

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(j)          Brokers
and Finders. Other than the Placement Agents with respect to the Company (which fees are to be paid by the Company), to its
knowledge, no Person will have, as a result of the transactions contemplated by the Transaction Documents, 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.

 

(k)          Independent
Investment Decision. Such Purchaser has independently evaluated the merits of its decision to purchase Preferred 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 Preferred Shares constitutes legal,
regulatory, 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 Preferred Shares. Such Purchaser understands that the
Placement Agents have acted solely as the agent of the Company in this placement of the Securities and such Purchaser has not relied
on any statement, representation or warranty including any business or legal advice of the Placement Agents or any of either of
its agents, counselor 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.

 

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

 

(A)         The
decision to invest assets of the ERISA Entity in the Preferred 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 Preferred Shares;

 

(C)         The
purchase and holding of the Preferred 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 (except
with respect to Patriot, which shall not provide any representation or warranty with respect to this subsection (D)).

 

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(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.

 

(m)         Reliance
on Exemptions. Such Purchaser understands that the Securities 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 Preferred Shares.

 

(n)          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 Securities or the fairness or suitability of the investment
in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities. Purchaser understands
that the Securities 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.

 

(o)          Antitrust.
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 Preferred Shares contemplated hereby.

 

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

 

(q)          Regulatory
Matters. Purchaser understands and acknowledges that: (i) the Company is a registered bank holding company under the BHCA,
and is subject to regulation by the FRB; (ii) acquisitions of interests in bank holding companies are subject to the BHCA and the
Change in Bank Control Act (the “CIBCA”) and may be reviewed by the FRB to determine the circumstances under which
such acquisitions of interests will result in Purchaser becoming subject to the BHCA or subject to the prior notice requirements
of the CIBCA. Assuming the accuracy of the representations and warranties of the Company contained herein, 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 BHCA or CIBCA.
Purchaser is not participating and has not participated with any other investor in the offering of the Preferred Shares in any
joint activity or parallel action towards a common goal between or among such investors of acquiring control of the Company.

 

(r)          Trading.
Purchaser acknowledges that there is no trading market for the Preferred Stock, and no such market is expected to develop.

 

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(s)          OFAC
and Anti-Money Laundering. The Purchaser understands, acknowledges, represents and agrees that (i) the Purchaser is not the
target of any sanction, regulation, or law promulgated by the Office of Foreign Assets Control, the Financial Crimes Enforcement
Network or any other U.S. governmental entity (“U.S. Sanctions Laws”); (ii) the 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) the 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) the 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) the 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, the Purchaser
for the purposes of complying with U.S. Sanctions Laws or applicable anti-money laundering laws or regulations. 

 

(t)           No
Outside Discussion of Offering. Purchaser has not discussed the Offering with any other party or potential investors (other
than the Company, Placement Agents, any other Purchaser and Purchaser’s authorized representatives), except as expressly
permitted under the terms of this Agreement.

 

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 3 and the Transaction Documents.

 

Article
4:

 

OTHER AGREEMENTS OF THE PARTIES

 

4.1         Transfer
Restrictions.

 

(a)          Compliance
with Laws. Notwithstanding any other provision of this Article 4, each Purchaser covenants that
the Securities 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 Securities 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 transferred Securities under the Securities Act. Notwithstanding the foregoing, the Company hereby
consents to and agrees to register on the books of the Company and with its Transfer Agent, without any such legal opinion, except
to the extent that the Transfer Agent requests such legal opinion, any transfer of the Securities by any Purchaser to an Affiliate
of such Purchaser, provided that the transferee certifies to the Company that it is an “accredited investor” as defined
in Rule 501(a) under the Securities Act, and provided that such Affiliate does not request any removal of any existing legends
on any certificate evidencing the Securities. 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 Securities. 

 

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(b)          Legends.
Certificates evidencing the Securities shall bear any legend as required by the “blue sky” laws of any state and a
restrictive legend in substantially the following form (and, with respect to Securities held in book-entry form, the Transfer Agent
will record such a legend on the share register), 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 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 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.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
AGRRANGEMENT SECURIED BY THE SECURITIES IF THE PLEDGEE AGREES IN WRITING TO BE BOUND BY THE TRANSFER RESTRICTIONS TO WHICH THE
PLEDGOR IS SUBJECT.

 

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(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 Securities upon which it is stamped
or issue to such holder by electronic delivery at the applicable balance account at DTC, if (i) such Securities are sold or transferred
pursuant to (A) Rule 144 (if the transferor is not an Affiliate of the Company) or (B) pursuant to an effective registration statement
filed under the Securities Act, or (ii) such Securities 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 (as defined
in the Registration Rights Agreement) or (ii) Rule 144 becoming available for the resale of Securities, without the requirement
for the Company to be in compliance with the current public information required under 144(c)(1) (or Rule 144(i)(2), if applicable)
as to the Securities and without volume or manner-of-sale restrictions, the Company shall instruct the Transfer Agent to remove
the legend from the Securities 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 Company or the Transfer Agent (with notice
to the Company) of a legended certificate or instrument representing such Securities (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 Securities 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 Securities 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 Securities or any interest therein without complying with the requirements of the Securities Act and the rules and
regulations promulgated thereunder. Except as otherwise provided below, while the above-referenced registration statement remains
effective, each Purchaser hereunder may sell the Securities 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 Securities 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 Securities 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, such Purchaser will refrain from selling such Securities until such
time as such 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 Securities 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 Securities 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 Securities 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 Securities under Rule 144 of the Securities Act,
until the date that the Purchaser may sell all of its Securities without restriction or limitation under Rule 144 (including without
limitation the requirement to be in compliance with Rule 144(c)(1)), but not for a period exceeding 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 to
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 Securities pursuant to Rule 144.

 

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4.4         Form
D and Blue Sky. The Company agrees to timely file a Form D with respect to the Preferred 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 Preferred 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 Preferred 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 Securities in a manner that would require the registration
under the Securities Act of the sale of the Securities to the Purchasers.

 

4.6         Securities
Laws Disclosure: Publicity. On or before the third (3rd) Trading Day immediately following the date of this Agreement, the
Company shall issue one or more press releases (collectively, the “Press Release”) reasonably acceptable to
the Purchasers disclosing among other things (i) the material terms of the transactions
contemplated hereby, including, without limitation, the issuance of the Preferred Shares, and (ii) if an agreement has been finalized,
the existence of a definitive agreement regarding a potential acquisition by the Company. On
or before 5:30 p.m., New York City time, on the fourth Trading Day 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 Press Release, the material Transaction Documents (including, without limitation, this Agreement,
the Registration Rights Agreement and the Articles of Amendment), the use of proceeds and the execution of a securities purchase
agreement from certain other investors and such other disclosures and filings as may be required by the federal securities laws.
On or before 5:30 p.m., New York City time, on the fourth Trading Day immediately following the Closing Date, the Company will
file a Current Report on Form 8-K with the Commission disclosing the funding and closing of the offering and, to the extent necessary,
updating the previously filed Current Report on Form 8-K (and to the extent not previously filed, including as exhibits to such
Current Report on Form 8-K the material Transaction Documents (including, without limitation, this Agreement, the Registration
Rights Agreement and the Articles of Amendment) and such other disclosures and filings as may be required by the federal securities
laws. To the extent that the potential transactions contemplated hereby are publicly disclosed prior to Closing and this Agreement
terminates prior to Closing, the Company shall publicly disclose, on or before 9:00 a.m., New York City time, on the Trading Day
immediately following such termination, the termination of the transactions contemplated hereby. Notwithstanding the foregoing
and except with respect to Aquiline, 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 filing with the Commission (other than the Registration Statement) or Trading
Market, without the prior written consent of such Purchaser, except (i) as required by 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, (ii) to the extent such disclosure is required by law, at the request of the Staff of the Commission or 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 (other than Patriot and Aquiline) 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, that is not disclosed in the Press Release. 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)).

 

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4.7         Non-Public
Information. Other than with respect to Patriot, 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 (other than Patriot) shall not directly solicit the Company, any of its Subsidiaries or any of their respective
officers, directors, employees or agents to provide any Purchaser (other than Patriot) 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 and agents (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 or employees (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 a Indemnified Person in any capacity, or any of them or their respective affiliates, by any
shareholder of the Company 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 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.

 

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(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 action, proceeding or investigation 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, 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. 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 Indemnified Person, representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them; provided, that the Indemnifying Party shall
not be liable for the fees and expenses of more than one separate firm of attorneys at any time for all Indemnified Parties. The
Company shall not be liable for any settlement of any proceeding affected without its written consent, which consent shall not
be unreasonably withheld, delayed or conditioned. Without the prior written consent of the Indemnified Person, which consent shall
not be unreasonably withheld, delayed or conditioned, 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 Party, 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 Underlying Shares for quotation on the NASDAQ
Capital Market and maintain the listing of the Common Stock on the NASDAQ.

 

4.10       Use
of Proceeds. The Company intends to use the net proceeds from the sale of the Preferred Shares hereunder for general corporate
purposes, including the contribution of at least $50 million of the net proceeds to its Subsidiary, Bank of North Carolina.

 

4.11       Shareholders’
Meeting. The Company shall call a special meeting of its shareholders, to be held as promptly as practicable following the
Closing, but in no event later than 75 days after the Closing, to vote on proposals (the “Shareholder Proposals”)
to (i) approve the issuance of the Underlying Shares upon conversion of the Preferred Shares into Common Stock (voting and
non-voting) for purposes of NASDAQ Listing Rule 5635, and (ii) if necessary, amend the Articles of Incorporation to increase the
number of authorized shares of Common Stock to at least such number as shall be sufficient to permit the full conversion of the
Preferred Shares (such approval of the Shareholder Proposals, “Shareholder Approvals”). The Board of Directors
of the Company shall recommend to the Company’s shareholders that such shareholders vote in favor of the Shareholder Proposals.
In connection with such meeting, the Company shall promptly prepare and file (but in no event more than 15 Business Days after
the Closing Date) with the Commission a preliminary proxy statement, shall use its reasonable best efforts to respond to any comments
of the Commission or its staff and to cause a definitive proxy statement related to such shareholders’ meeting to be mailed
to the Company’s shareholders not more than 10 Business Days after clearance thereof by the Commission, and shall use its
reasonable best efforts to solicit proxies for such Shareholder Approvals. If at any time prior to such shareholders’ meeting
there shall occur any event that is required to be set forth in an amendment or supplement to the proxy statement, the Company
shall as promptly as practicable prepare and mail to its shareholders such an amendment or supplement. In the event that Shareholder
Approvals are not obtained at such special shareholders’ meeting, the Company shall include a proposal to approve (and the
Board of Directors shall recommend approval of) such proposal at a meeting of its shareholders to be held no less than once in
each subsequent six-month period beginning on the date of such special shareholders’ meeting until such approval is obtained.

 

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4.12       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 Preferred Shares that would result in such Purchaser becoming, directly or indirectly, the beneficial
owner (as determined under Rule 13d-3 under the Exchange Act) of more than (i) 9.9% of the number of shares of Voting Common Stock
issued and outstanding or (ii) 24.9% of the total equity of the Company.

 

4.13       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 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).

 

4.14       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 (a) such Purchaser’s or any other Person’s equity of the Company (together with equity owned by such Purchaser’s
or other Person’s Affiliates (as such term is used under the BHCA)) to exceed 33.3% of the Company’s total equity (provided
that there is no ownership or control in excess of 9.9% of any class of voting securities of the Company by such Purchaser or any
other Person, together with their respective Affiliates, as applicable) or (b) such Purchaser’s or any other Person’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 BHCA) of voting securities of the Company) to exceed 9.9%, or to increase to an amount that would constitute
“control” under the BHCA, the CIBCA 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 BHCA, the CIBCA or any rules
or regulations promulgated thereunder (or any successor provisions), in each case without the prior written consent of such Purchaser
or such Person; provided however that the Company shall not be deemed to be in breach of this Section to the extent that it is
taking actions authorized under other Sections of this Agreement. Notwithstanding anything to the contrary in this Agreement, no
Purchaser (together with its Affiliates (as such term is used under the BHCA)) shall have the ability to purchase more than 33.3%
of the Company’s total equity or 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 4.14
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.

 

4.15       Most
Favored Nation. Except as disclosed or set forth herein, 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, other than Aquiline and Patriot, 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.

 

    	30

    	 

    

 

Article
5:

 

CONDITIONS PRECEDENT TO CLOSING

 

5.1         Conditions
Precedent to the Obligations of the Purchasers to Purchase Preferred Shares. The obligation of each Purchaser to acquire Preferred
Shares at the Closing is subject to the fulfillment, 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 in all material
respects (except for those representations and warranties that are qualified by materiality, which shall be true and correct in
all respects) as of the date hereof 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 that prohibits
the consummation of any of the transactions contemplated by the Transaction Documents. 

 

(d)          Consents.
Other than the Required Approvals contemplated in Section 3.1 (e)(i), (iii), (v) and (vi) above, 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 Preferred Shares, all of which shall be and remain so long as necessary in full force and effect.

 

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

 

(f)           Compliance
Certificate. The Company shall have delivered to each Purchaser a certificate, dated as of the Closing Date and signed by its
Chief Executive Officer or its Chief Financial Officer, certifying to the fulfillment of the conditions specified in Sections 5.1
(a) and (b) in the form attached hereto as Exhibit F.

 

(g)          Articles
of Amendment. The Company shall have filed the Series C Preferred Stock Articles of Amendment and the Series B-1 Preferred
Stock Articles of Amendment with the Secretary of State.

 

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

 

(i)           Minimum
Investment Amounts.  The Company shall have received aggregate gross proceeds from the sale
of the Preferred Shares to (i) Purchasers hereunder and (ii) Aquiline of not less than $60 million on or prior to the Closing Date.

 

    	31

    	 

    

 

(j)           Ownership
Limitations. The sale of the Preferred Shares pursuant to this Agreement will not cause any Purchaser to directly or indirectly
(assuming conversion of the Preferred Shares) become the beneficial owner (as determined under Rule 13d-3 under the Exchange
Act) of more than (i) 9.9% of the number of shares of voting Common Stock issued and outstanding or (ii) 33.3% of the
total equity of the Company.

 

(k)
        NASDAQ Approval. NASDAQ has reviewed the transactions contemplated hereby, including but not limited to the terms of
the Preferred Shares set forth in the Articles of Amendment; NASDAQ has completed its review and has raised no objections; and
NASDAQ has raised no objections to the listing of the Common Stock issuable upon conversion of (i) the Series C Preferred Stock
and (ii) non-voting Common Stock underlying the Series B-1 Preferred Stock.

 

5.2         Conditions
Precedent to the Obligations of the Company to sell Preferred Shares. The Company’s obligation
to sell and issue the Preferred Shares at the Closing is subject to the fulfillment, 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 each Purchaser in Section 3.2 hereof shall be true and correct in
all material respects (except for those representations and warranties that are qualified by materiality, which shall be true and
correct in all respects) as of the date hereof 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.

 

(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 that prohibits the consummation of any of the transactions
contemplated by the Transaction Documents.

 

(d)          Consents.
Other than the Required Approvals contemplated in Section 3.1 (e)(i), (iii), (v) and (vi) above, 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 Preferred Shares, all of which shall be and remain so long as necessary in full force and effect.

 

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

 

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

 

(g)
       NASDAQ Approval. NASDAQ has reviewed the transactions contemplated hereby, including but not limited to the terms of
the Preferred Shares set forth in the Articles of Amendment; NASDAQ has completed its review and has raised no objections; and
NASDAQ has raised no objections to the listing of the Common Stock issuable upon conversion of the Series C Preferred Stock and
non-voting Common Stock underlying the Series B-1 Preferred Stock.

 

    	32

    	 

    

 

Article
6:

 

MISCELLANEOUS

 

6.1         Fees
and Expenses. 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 Agents 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
Securities to the Purchasers. Notwithstanding the forgoing, the Company shall reimburse each of Patriot and Wellington Management
Company, LLP up to $25,000, respectively, for all reasonable and documented expenses incurred by them in connection with the preparation
and negotiation of the Transaction Documents, related due diligence, and the consummation of the transactions contemplated hereby.

 

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 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
confirmation of receipt of an e-mail transmission) at the facsimile number 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:	BNC
Bancorp

1226
Eastchester Drive

High Point, NC 27265

Attention: W. Swope Montgomery, Jr., President and Chief Executive Officer

Fax: (336) 889-8996

E-Mail:
smontgomer@bankofnc.com

  

    	33

    	 

    

 

		With a copy to:	Womble
Carlyle Sandridge & Rice, LLP

271 17th
Street, N.W.

Suite 2400

Atlanta, Georgia 30363

Attention: Steven S. Dunlevie

Fax: (404) 870-4828 

E-Mail:
Sdunlevie@wcsr.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 an officer or 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 provision of any Transaction Document
unless the same consideration is also offered to all Purchasers who then hold Preferred 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 Securities in compliance with the Transaction Documents and applicable law, provided such transferee
shall agree in writing to be bound, with respect to the transferred Securities, 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,
solely with respect to the provisions of Section 4.8, the Indemnified Persons.

 

    	34

    	 

    

 

6.8           Governing
Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to contracts
made and to be performed entirely within such State. Each party agrees that all Proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other Transaction Documents, or any other matter related
thereto (whether brought against a party hereto or its respective Affiliates, employees or agents) whether in tort or contract
or at law or in equity, shall be commenced and maintained exclusively in the United States District Court for the Southern District
of New York or the Supreme Court of the State of New York for the County of New York (the (“New York Courts”) Each
party hereto hereby irrevocably submits to the exclusive jurisdiction of such 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 Courts, 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 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 Preferred Shares; provided, that the representations and warranties of the Company
and each Purchaser shall survive the Closing and the delivery of Preferred Shares for a period of one year.

 

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 bye-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 Preferred Shares. If any certificate or instrument evidencing any Preferred 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 Preferred Shares. If a replacement certificate or instrument evidencing any Preferred 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.

 

    	35

    	 

    

 

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 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 Preferred
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 any 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,
statement or opinions. Nothing contained herein or in any Transaction Document, and no action taken by any Purchaser pursuant 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 Securities 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.

 

    	36

    	 

    
  

6.16         Termination,
Rescission.

 

(a)        
This Agreement may be terminated and the sale and purchase of the Preferred 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. In the event that any
Purchaser terminates this Agreement with respect to itself, the Company shall give prompt notice of the termination to each other
Purchaser, and, as necessary, work in good faith to restructure the transaction to allow each Purchaser that does not exercise
a termination right to purchase the full number of Securities set forth below such Purchaser’s name on the signature page
of this Agreement while remaining in compliance with Section 4.12. 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 this Agreement or
the other Transaction Documents. In the event of a termination pursuant to this Section 6.16, the Company shall promptly notify
all non-terminating Purchasers. Upon a termination in accordance with this Section 6.16, 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.

 

(b)
       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.

 

(c)        
Promptly following the termination of this Agreement pursuant to this Section 6.16, the Company shall provide written notice
to the Escrow Agent notifying the Escrow Agent that this Agreement has been terminated. Pursuant to the terms of the Escrow Agreement,
the Escrow Agent shall (A) distribute to each Purchaser such Purchaser’s Subscription Amount and (B) advise the Transfer
Agent that the share issuance instructions with respect to such Purchaser shall be null and void.

 

    	37

    	 

    

 

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.

 

	 	BNC Bancorp
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

[REMAINDER OF PAGE INTENTIONALLY
LEFT BLANK]

[SIGNATURE PAGES FOR PURCHASERS FOLLOW] 

 

    	38

    	 

    

 

	 	PURCHASER:	 
	 	 
	 	By:	 
	 	Name:	 
	 	 
	 	Title:
	 	 
	 	Aggregate Purchase Price (Subscription Amount): $
	 	 
	 	Number of Preferred Shares to be Acquired:
	 	 
	 	Shares of Series C Preferred Stock to be Acquired:
	 	 
	 	Shares of Series B-1 Preferred Stock  to be Acquired:
	 	 
	 	Tax ID No.:
	 	 
	 	Address for Notice:
	 	 
	 	 
	 	 
	 	Telephone No.:
	 	Facsimile No.:
	 	E-mail Address:
	 	Attention:
	 	 
	 	Wire instructions for return of escrowed funds:
	 	 
	 	 
	 	 
	 	 	 	 

Delivery Instructions: (if different than above)

	c/o	 	 
	Street:	 	 
	City/State/Zip:	 	 
	Attention:	 	 
	Telephone No.:	 	 

 

[Signature Page to Securities Purchase Agreement]

 

    	39

    	 

    

  

EXHIBITS 

 

		A-1:	Form of Series C Preferred Stock Articles of Amendment

		A-2:	Form of Series B-1 Preferred Stock Articles of Amendment

		B:	Form of Registration Rights Agreement

		C-1:	Accredited Investor Questionnaire

		C-2:	Stock Certificate Questionnaire

		D:	Form of Opinion of Company’s Counsel

		E:	Form of Secretary’s Certificate

		F:	Form of Officer’s Certificate

		G:	Subsidiaries of the Company

		H:	Form of Escrow Agreement

		I:	List of Agreements Re: Registration Rights

 

    	40

    	 

    

 

EXHIBIT A-1

 

Form of Series C Preferred Stock Articles
of Amendment

 

    	41

    	 

    

 

EXHIBIT A-2

 

Form of Series B-1 Preferred Stock Articles
of Amendment

 

    	42

    	 

    

 

EXHIBIT B

 

Form of Registration Rights Agreement

 

    	43

    	 

    

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration
Rights Agreement (this "Agreement") is made and entered into as of May 31, 2012, by and among BNC Bancorp., a
corporation organized under the laws of North Carolina (the "Company"), and the several purchasers signatory hereto
(each a "Purchaser" and collectively, the "Purchasers"). 

 

This Agreement is made pursuant
to the Securities Purchase Agreement, dated as of the date hereof between the Company and each Purchaser (the "Purchase
Agreement"). 

 

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 each of the Purchasers agree as follows:

 

1.            Definitions.
Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given
such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:

 

"Advice" shall
have the meaning set forth in Section 6(d).

 

"Affiliate"
means, with respect to any person, any other person which directly or indirectly controls, is controlled by, or is under common
control with, such person.

 

"Agreement" shall
have the meaning set forth in the Preamble.

 

"Allowable Grace Period"
shall have the meaning set forth in Section 2(e).

 

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

 

"Closing" has
the meaning set forth in the Purchase Agreement.

 

"Closing Date"
has the meaning set forth in the Purchase Agreement.

 

"Commission" means
the Securities and Exchange Commission.

 

"Common
Stock" means the common stock of the Company, no par value, and any securities into which such shares of common stock
may hereinafter be reclassified.

 

"Company" shall
have the meaning set forth in the Preamble.

 

"Effective
Date" means the date that the Registration Statement filed pursuant to Section 2(a) is first declared effective by the
Commission.

 

"Effectiveness
Deadline" means, with respect to the Initial Registration Statement or the New Registration Statement, the earlier of
(i) the 120th calendar day following the Closing Date (or the 155th calendar day following the Closing Date in the event that such
registration statement is subject to review by the Commission) and (ii) the 5th Trading Day after the date the Company
is notified (orally or in writing, whichever is earlier) by the Commission that such Registration Statement will not be "reviewed"
or will not be subject to further review; provided, that if the Effectiveness Deadline falls on a Saturday, Sunday or other
day that the Commission is closed for business, the Effectiveness Deadline shall be extended to the next Business Day on which
the Commission is open for business.

 

"Effectiveness Period"
shall have the meaning set forth in Section 2(b).

 

    	44

    	 

    

 

"Event" shall
have the meaning set forth in Section 2(c).

 

"Event Date"
shall have the meaning set forth in Section 2(c). 

 

"Exchange
Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

"Filing
Deadline" means, with respect to the Initial Registration Statement required to be filed pursuant to Section 2(a), the
60th calendar day following the Closing Date, provided, that if the Filing Deadline falls on a Saturday, Sunday or other
day that the Commission is closed for business, the Filing Deadline shall be extended to the next business day on which the Commission
is open for business.

 

"Grace Period"
shall have the meaning set forth in Section 2(e).

 

"Holder"
or "Holders" means the holder or holders, as the case may be, from time to time of Registrable Securities.

 

"Indemnified Party"
shall have the meaning set forth in Section 5(c).

 

"Indemnifying Party"
shall have the meaning set forth in Section 5(c).

 

"Initial
Registration Statement" means the initial Registration Statement filed pursuant to Section 2(a) of this Agreement.

 

"Liquidated Damages"
shall have the meaning set forth in Section 2(c).

 

"Losses" shall
have the meaning set forth in Section 5(a).

 

"New Registration Statement"
shall have the meaning set forth in Section 2(a).

 

"Person"
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

"Principal
Market" means the Trading Market on which the Common Stock is primarily listed on and quoted for trading, which, as of
the Closing Date, shall be the NASDAQ Capital 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.

 

"Prospectus"
means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated
under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of
any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference
in such Prospectus.

 

"Purchase Agreement"
shall have the meaning set forth in the Recitals.

 

"Purchaser"
or "Purchasers" shall have the meaning set forth in the Preamble.

 

    	45

    	 

    

 

"Registrable
Securities" means all of the Preferred Shares and the Underlying Shares and any securities issued or issuable upon any
stock split, dividend or other distribution, recapitalization or similar event with respect to the Preferred Shares and the Underlying
Shares, provided, that the Holder has timely completed and delivered to the Company a Selling Shareholder Questionnaire;
and provided, further, that Preferred Shares or Underlying Shares shall cease to be Registrable Securities upon the earliest
to occur of the following: (A) a sale pursuant to a Registration Statement or Rule 144 under the Securities Act (in which case,
only such security sold shall cease to be a Registrable Security); (B) becoming eligible for sale without the requirement for the
Company to be in compliance with the current public information required under Rule l44(c)(l) (or Rule l44(i)(2), if applicable)
and without volume or manner of sale restrictions by Holders who are not Affiliates of the Company; (C) if such Preferred Shares
or Underlying Shares have ceased to be outstanding; or (D) if such Preferred Shares or Underlying Shares have been sold in a private
transaction in which the Holder's rights under this Agreement have not been assigned to the transferee.

 

"Registration
Statements" means any one or more registration statements of the Company filed under the Securities Act that covers the
resale of any of the Registrable Securities pursuant to the provisions of this Agreement (including without limitation the Initial
Registration Statement, the New Registration Statement and any Remainder Registration Statements), amendments and supplements to
such Registration Statements, including post-effective amendments, all exhibits and all material incorporated by reference or deemed
to be incorporated by reference in such Registration Statements.

 

"Remainder Registration
Statement" shall have the meaning set forth in Section 2(a).

 

"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.

 

"Rule 415"
means Rule 415 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.

 

"Rule 424"
means Rule 424 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
Guidance" means (i) any publicly-available written or oral guidance, comments, requirements or requests of the Commission
staff and (ii) the Securities Act.

 

"Securities
Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

"Selling
Shareholder Questionnaire" means a questionnaire in the form attached as Annex B hereto, or such other form of
questionnaire as may reasonably be adopted by the Company from time to time.

 

"Trading
Day" means (i) a day on which the Common Stock is listed or quoted and traded on its Principal Market (other than the
OTC Bulletin Board), or (ii) if the Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day on
which the Common Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common
Stock is not 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), (ii) and (iii) 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 OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date in question.

 

    	46

    	 

    

 

2.          Registration. 

 

(a)         On or prior
to the Filing Deadline, the Company shall prepare and file with the Commission a Registration Statement covering the resale of
all of the Registrable Securities not already covered by an existing and effective Registration Statement for an offering to be
made on a continuous basis pursuant to Rule 415 or, if Rule 415 is not available for offers and sales of the Registrable Securities,
by such other means of distribution of Registrable Securities as the Company may reasonably determine (the "Initial Registration
Statement"). The Initial Registration Statement shall be on Form S-3 (except if the Company is then ineligible to register
for resale of the Registrable Securities on Form S-3, in which case such registration shall be on such other form available to
the Company to register for resale of the Registrable Securities as a secondary offering) subject to the provisions of Section
2(f) and shall contain (except if otherwise required pursuant to (i) written comments received from the Commission upon a review
of such Registration Statement or (ii) a change in SEC Guidance) the "Plan of Distribution" section substantially in
the form attached hereto as Annex A. Notwithstanding the registration obligations set forth in this Section 2, in the event
the Commission informs the Company that all of the Registrable Securities cannot, as a result of the application of Rule 415, be
registered for resale as a secondary offering on a single registration statement, the Company agrees to promptly (i) inform each
of the Holders thereof and use its commercially reasonable efforts to file amendments to the Initial Registration Statement as
required by the Commission and/or (ii) withdraw the Initial Registration Statement and file a new registration statement (a "New
Registration Statement"), in either case covering the maximum number of Registrable Securities permitted to be registered
by the Commission, on Form S-3 or such other form available to the Company to register for resale the Registrable Securities as
a secondary offering; provided, that prior to filing such amendment or New Registration Statement, the Company shall be
obligated to use its commercially reasonable efforts to advocate with the Commission for the registration of all of the Registrable
Securities in accordance with the SEC Guidance, including without limitation, Securities Act Rules Compliance and Disclosure Interpretation
612.09. Notwithstanding any other provision of this Agreement and subject to the payment of Liquidated Damages in Section
2(c), if any SEC Guidance sets forth a limitation of the number of Registrable Securities or other shares of Common Stock permitted
to be registered on a particular Registration Statement as a secondary offering (and notwithstanding that the Company used commercial
reasonable efforts to advocate with the Commission for the registration of all or a greater number of Registrable Securities),
the number of Registrable Securities or other shares of Common Stock to be registered on such Registration Statement will be reduced
on a pro rata basis. In the event the Company amends the Initial Registration Statement or files a New Registration Statement,
as the case may be, under clauses (i) or (ii) above, the Company will use its commercially reasonable efforts to file with the
Commission, as promptly as allowed by Commission or SEC Guidance provided to the Company or to registrants of securities in general,
one or more registration statements on Form S-3 or such other form available to the Company to register for resale those Registrable
Securities that were not registered for resale on the Initial Registration Statement, as amended, or the New Registration Statement
(the "Remainder Registration Statements"). No Holder shall be named as an "underwriter" in any Registration
Statement without such Holder's prior written consent.

 

(b)         The Company
shall use its commercially reasonable efforts to cause each Registration Statement to be declared effective by the Commission as
soon as practicable and, with respect to the Initial Registration Statement or the New Registration Statement, as applicable, no
later than the Effectiveness Deadline, and shall use its commercially reasonable efforts to keep each Registration Statement continuously
effective under the Securities Act until the earlier of (i) such time as all of the Registrable Securities covered by such Registration
Statement have been publicly sold by the Holders or (ii) the date that all Registrable Securities covered by such Registration
Statement may be sold by non-affiliates of the Company without volume or manner of sale restrictions under Rule 144, and without
the requirement for the Company to be in compliance with the current public information requirements under Rule 144(c)(1) (or Rule
144(i)(2), if applicable), as determined by counsel to the Company pursuant to a written opinion letter to such effect, addressed
and reasonably acceptable to the Company's transfer agent and the affected Holders (the "Effectiveness Period"). The
Company shall request effectiveness of a Registration Statement as of 5:00 p.m. New York City time on a Trading Day. The Company
shall promptly notify the Holders via facsimile or electronic mail of a “.pdf” format data file of the effectiveness
of a Registration Statement within one (1) Business Day of the Effective Date. The Company shall, by 9:30 a.m. New York City time
on the first Trading Day after the Effective Date, file a final Prospectus with the Commission, as required by Rule 424(b).

 

    	47

    	 

    

 

(c)          If:
(i) the Initial Registration Statement is not filed with the Commission on or prior to the Filing Deadline, (ii) the Initial Registration
Statement or the New Registration Statement, as applicable, is not declared effective by the Commission (or otherwise does not
become effective) for any reason on or prior to the Effectiveness Deadline, other than as a result of any open issues arising out
of any routine Commission review of Exchange Act filings in effect as of the date hereof, or (iii) after its Effective Date, (A)
such Registration Statement ceases for any reason (including without limitation by reason of a stop order, or the Company's failure
to update the Registration Statement), to remain continuously effective as to all Registrable Securities for which it is required
to be effective or (B) the Holders are not permitted to utilize the Prospectus therein to resell such Registrable Securities, in
the case of (A) and (B) (other than during an Allowable Grace Period (as defined in Section 2(e) of this Agreement)), (iv) a Grace
Period (as defined in Section 2(e) of this Agreement) exceeds the length of an Allowable Grace Period, or (v) after the date six
months following the Closing Date, and only in the event a Registration Statement is not effective or available to sell all Registrable
Securities, the Company fails to file with the SEC any required reports under Section 13 or 15(d) of the Exchange Act such that
it is not in compliance with Rule 144(c)(1) (or Rule 144(i)(2), if applicable), as a result of which the Holders who are not affiliates
are unable to sell Registrable Securities without restriction under Rule 144 (or any successor thereto) (any such failure or breach
in clauses (i) through (v) above being referred to as an "Event," and, for purposes of clauses (i), (ii), (iii) or (v),
the date on which such Event occurs, or for purposes of clause (iv) the date on which such Allowable Grace Period is exceeded,
being referred to as an "Event Date"), then in addition to any other rights the Holders may have hereunder or under applicable
law, on each such Event Date and on each monthly anniversary of each such Event Date (if the applicable Event shall not have been
cured by such date) until the applicable Event is cured, the Company shall pay to each Holder an amount in cash, as liquidated
damages and not as a penalty ("Liquidated Damages"), equal to 0.50% of the aggregate purchase price paid by such Holder
pursuant to the Purchase Agreement for any Registrable Securities held by such Holder on the Event Date. The parties agree that
notwithstanding anything to the contrary herein or in the Purchase Agreement, no Liquidated Damages shall be payable (i) if as
of the relevant Event Date, the Registrable Securities may be sold by non-affiliates without volume or manner of sale restrictions
under Rule 144 and the Company is in compliance with the current public information requirements under Rule 144(c)(1) (or Rule
144(i)(2), if applicable), as determined by counsel to the Company pursuant to a written opinion letter to such effect, addressed
and reasonably acceptable to the Company's transfer agent (ii) to a Holder causing an Event that relates to or is caused by any
action or inaction taken by such Holder and (iii) with respect to any period after the expiration of the Effectiveness Period (it
being understood that this sentence shall not relieve the Company of any Liquidated Damages accruing prior to the Effectiveness
Period). If the Company fails to pay any Liquidated Damages pursuant to this Section 2(c) in full within ten (10) Business Days
after the date payable, the Company will pay interest thereon at a rate of 1.0% per month (or such lesser maximum amount that is
permitted to be paid by applicable law) to the Holder, accruing daily from the date such Liquidated Damages are due until such
amounts, plus all such interest thereon, are paid in full. The Liquidated Damages pursuant to the terms hereof shall apply on a
daily pro-rata basis for any portion of a month prior to the cure of an Event, except in the case of the first Event Date. The
Effectiveness Deadline for a Registration Statement shall be extended without default or Liquidated Damages hereunder in the event
that the Company's failure to obtain the effectiveness of the Registration Statement on a timely basis results from the failure
of a Purchaser to timely provide the Company with information requested by the Company and necessary to complete the Registration
Statement in accordance with the requirements of the Securities Act (in which case the Effectiveness Deadline would be extended
with respect to Registrable Securities held by such Purchaser).

 

    	48

    	 

    

 

(d)        Each Holder
agrees to furnish to the Company a completed Selling Shareholder Questionnaire not more than ten (10) Trading Days following the
date of this Agreement. At least five (5) Trading Days prior to the first anticipated filing date of a Registration Statement for
any registration under this Agreement, the Company will notify each Holder of the information the Company requires from that Holder
other than the information contained in the Selling Shareholder Questionnaire, if any, which shall be completed and delivered to
the Company promptly upon request and, in any event, within two (2) Trading Days prior to the applicable anticipated filing date.
Each Holder further agrees that it shall not be entitled to be named as a selling security holder in the Registration Statement
or use the Prospectus for offers and resales of Registrable Securities at any time, unless such Holder has returned to the Company
a completed and signed Selling Shareholder Questionnaire and a response to any requests for further information as described in
the previous sentence. If a Holder of Registrable Securities returns a Selling Shareholder Questionnaire or a request for further
information, in either case, after its respective deadline, the Company shall use its commercially reasonable efforts at the expense
of the Holder who failed to return the Selling Shareholder Questionnaire or to respond for further information to take such actions
as are required to name such Holder as a selling security holder in the Registration Statement or any pre-effective or post-effective
amendment thereto and to include (to the extent not theretofore included) in the Registration Statement the Registrable Securities
identified in such late Selling Shareholder Questionnaire or request for further information. Each Holder acknowledges and agrees
that the information in the Selling Shareholder Questionnaire or request for further information as described in this Section 2(d)
will be used by the Company in the preparation of the Registration Statement and hereby consents to the inclusion of such information
in the Registration Statement.

 

(e)         Notwithstanding
anything to the contrary herein, at any time after the Registration Statement has been declared effective by the Commission, the
Company may delay the disclosure of material non-public information concerning the Company if the disclosure of such information
at the time is not, in the good faith judgment of the Company, in the best interests of the Company (such delay, a "Grace
Period"); provided, the Company shall promptly (i) notify the Holders in writing of the existence of material non-public
information giving rise to a Grace Period (provided that the Company shall not disclose the content of such material non-public
information to the Holders) or the need to file a post-effective amendment, as applicable, and the date on which such Grace Period
will begin, (ii) use commercially reasonable best efforts to terminate a Grace Period as promptly as practicable and (iii) notify
the Holders in writing of the date on which the Grace Period ends; provided, further, that no single Grace Period shall
exceed forty-five (45) consecutive days, and during any three hundred sixty-five (365) day period, the aggregate of all Grace Periods
shall not exceed an aggregate of ninety (90) days (each Grace Period complying with this provision being an "Allowable
Grace Period"). For purposes of determining the length of a Grace Period, the Grace Period shall be deemed to begin on
and include the date the Holders receive the notice referred to in clause (i) above and shall end on and include the later of the
date the Holders receive the notice referred to in clause (iii) above and the date referred to in such notice; provided, that
no Grace Period shall be longer than an Allowable Grace Period. Notwithstanding anything to the contrary, the Company shall cause
the Transfer Agent to deliver unlegended Common Stock to a transferee of a Holder in accordance with the terms of the Purchase
Agreement in connection with any sale of Registrable Securities with respect to which a Holder has entered into an irrevocable
contract for sale prior to the Holder's receipt of the notice of a Grace Period and for which the Holder has not yet settled.

 

(f)          In
the event that Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company
shall (i) use commercially reasonable efforts to register the resale of the Registrable Securities on another appropriate form
and (ii) undertake to use commercially reasonable efforts to register the Registrable Securities on Form S-3 promptly after such
form is available, provided that the Company shall use commercially reasonable efforts to maintain the effectiveness of
the Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities
has been declared effective by the Commission.

 

    	49

    	 

    
  

3.             Registration
Procedures 

 

In connection with the Company's registration obligations
hereunder:

 

(a)          the
Company shall not less than three (3) Trading Days prior to the filing of a Registration Statement and not less than one (1) Trading
Day prior to the filing of any related Prospectus or any amendment or supplement thereto (except for Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and any similar or successor reports), the Company shall, furnish
to the Holder copies of such Registration Statement, Prospectus or amendment or supplement thereto, as proposed to be filed, which
documents will be subject to the reasonable review of such Holder (it being acknowledged and agreed that if a Holder does not object
to or comment on the aforementioned documents within such three (3) Trading Day or one (1) Trading Day period, as the case may
be, then the Holder shall be deemed to have consented to and approved the use of such documents). The Company shall not file any
Registration Statement or amendment or supplement thereto in a form to which a Holder reasonably objects in good faith, provided
that, the Company is notified of such objection in writing within the three (3) Trading Day or one (1) Trading Day period described
above, as applicable.

 

(b)          (i)
the Company shall prepare and file with the Commission such amendments including post-effective amendments) and supplements, to
each Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement
continuously effective as to the applicable Registrable Securities for its Effectiveness Period (except during an Allowable Grace
Period); (ii) the Company shall cause the related Prospectus to be amended or supplemented by any required Prospectus supplement
(subject to the terms of this Agreement), and, as so supplemented or amended, to be filed pursuant to Rule 424 (except during an
Allowable Grace Period); (iii) the Company shall respond as promptly as reasonably practicable to any comments received from the
Commission with respect to each Registration Statement or any amendment thereto and, as promptly as reasonably possible, provide
the Holders true and complete copies of all correspondence from and to the Commission relating to such Registration Statement that
pertains to the Holders as "Selling Shareholders" but not any comments that would result in the disclosure to the Holders
of material and non-public information concerning the Company; and (iv) the Company shall comply with the provisions of the Securities
Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement until
such time as all of such Registrable Securities shall have been disposed of (subject to the terms of this Agreement) in accordance
with the intended methods of disposition by the Holders thereof as set forth in such Registration Statement as so amended or in
such Prospectus as so supplemented; provided, that each Purchaser shall be responsible for the delivery of the Prospectus
to the Persons to whom such Purchaser sells any of the Registrable Securities (including in accordance with Rule 172 under the
Securities Act), and each Purchaser agrees to dispose of Registrable Securities in compliance with the plan of distribution described
in the Registration Statement and otherwise in compliance with applicable federal and state securities laws. In the case
of amendments and supplements to a Registration Statement which are required to be filed pursuant to this Agreement (including
pursuant to this Section 3(b)) by reason of the Company filing a report on Form 10-K, Form 10-Q or Form 8-K or any analogous report
under the Exchange Act, the Company shall have incorporated such report by reference into such Registration Statement, if applicable,
or shall file such amendments or supplements with the Commission on the same day on which the Exchange Act report which created
the requirement for the Company to amend or supplement such Registration Statement was filed.

 

(c)          the
Company shall notify the Holders (which notice shall, pursuant to clauses (iii) through (v) hereof, be accompanied by an instruction
to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably practicable (and, in
the case of (i) (A) below, not less than two (2) Trading Days prior to such filing, in the case of (iii) and (iv) below, not more
than one (1) Trading Day after such issuance or receipt, and in the case of (v) below, not more than one (1) Trading Day after
the occurrence or existence of such development) and (if requested by any such Person) confirm such notice in writing no later
than one (1) Trading Day following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to
a Registration Statement is proposed to be filed; (B) when the Commission notifies the Company whether there will be a "review"
of such Registration Statement and whenever the Commission comments in writing on any Registration Statement (in which case the
Company shall provide to each of the Holders true and complete copies of all comments that pertain to the Holders as a "Selling
Shareholder" or to the "Plan of Distribution" and all written responses thereto, but not information that the Company
believes would constitute material and non-public information); and (C) with respect to each Registration Statement or any post-effective
amendment, when the same has become effective; (ii) of any request by the Commission or any other Federal or state governmental
authority for amendments or supplements to a Registration Statement or Prospectus or for additional information that pertains to
the Holders as "Selling Shareholders" or the "Plan of Distribution"; (iii) of the issuance by the Commission
or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement
covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt by
the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose;
and (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration
Statement ineligible for inclusion therein or any statement made in such Registration Statement or Prospectus or any document incorporated
or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to such Registration
Statement, Prospectus or other documents so that, in the case of such Registration Statement or the Prospectus, as the case may
be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein (in the case of any Prospectus, form of prospectus or supplement thereto, in light
of the circumstances under which they were made), not misleading.

 

    	50

    	 

    

 

(d)        the Company
shall use commercially reasonable efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order suspending
the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of
any of the Registrable Securities for sale in any jurisdiction, as soon as practicable.

 

(e)        the Company
shall, if requested by a Holder, furnish to such Holder, without charge, at least one conformed copy of each Registration Statement
and each amendment thereto and all exhibits to the extent requested by such Person (including those previously furnished or incorporated
by reference) promptly after the filing of such documents with the Commission; provided, that the Company shall have no
obligation to provide any document pursuant to this clause that is available on the Commission's EDGAR or successor system.

 

(f)          the
Company shall, prior to any resale of Registrable Securities by a Holder, use its commercially reasonable efforts to register or
qualify or cooperate with the selling Holders in connection with the registration or qualification (or exemption from the registration
or qualification) of such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions
within the United States as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption
therefrom) effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable
the disposition in such jurisdictions of the Registrable Securities covered by each Registration Statement; provided, that
the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject
the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service of
process in any such jurisdiction.

 

(g)          the
Company shall, reasonably cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be delivered to a transferee pursuant to the Registration Statement, which certificates shall be free,
to the extent permitted by the Purchase Agreement and under law, of all restrictive legends, and to enable such Registrable Securities
to be in such denominations and registered in such names as any such Holders may reasonably request. Certificates for Registrable
Securities free from all restrictive legends may be transmitted by the transfer agent to a Holder by crediting the account of such
Holder's prime broker with DTC as directed by such Holder.

 

(h)         the
Company shall following the occurrence of any event contemplated by Section 3(c)(iii)-(v), as promptly as reasonably practicable
(taking into account the Company's good faith assessment of any adverse consequences to the Company and its shareholders of the
premature disclosure of such event), prepare and file a supplement or amendment, including a post-effective amendment, to the affected
Registration Statements or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein
by reference, and file any other required document so that, as thereafter delivered, no Registration Statement nor any Prospectus
will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein (in the case of any Prospectus, form of prospectus or supplement thereto, in light of the circumstances
under which they were made), not misleading.

 

    	51

    	 

    

 

(i)          the
Company may require each selling Holder to furnish to the Company a certified statement as to (i) the number of shares of Common
Stock beneficially owned by such Holder and any Affiliate thereof, (ii) any Financial Industry Regulatory Authority ("FINRA")
affiliations, (iii) any natural persons who have the power to vote or dispose of the Common Stock and (iv) any other information
as may be requested by the Commission, FINRA, any state securities commission or any other government or regulatory body with jurisdiction
over the Company or its activities. During any periods that the Company is unable to meet its obligations hereunder with respect
to the registration of Registrable Securities because any Holder fails to furnish such information within three (3) Trading Days
of the Company's request, any Liquidated Damages that are accruing at such time as to such Holder only shall be tolled and any
Event that may otherwise occur solely because of such delay shall be suspended as to such Holder only, until such information is
delivered to the Company.

 

(j)          the
Company shall cooperate with any registered broker through which a Holder proposes to resell its Registrable Securities in effecting
a filing with FINRA pursuant to FINRA Rule 5110 as requested by any such Holder and the Company shall pay the filing fee required
for the first such filing (but not additional filings) within two (2) Business Days of the request therefore. 

 

(k)          the
Company shall use its commercially reasonable efforts to maintain eligibility for use of Form S-3 (or any successor form thereto)
for the registration of the resale of Registrable Securities.

 

(l)          if
requested by a Holder, the Company shall (i) promptly incorporate in a Prospectus supplement or post-effective amendment to the
Registration Statement such information as the Company reasonably agrees (upon advice of counsel) should be included therein and
(ii) make all required filings of such Prospectus supplement or such post-effective amendment as soon as reasonably practicable
after the Company has received notification of the matters to be incorporated in such Prospectus supplement or post-effective amendment.

 

(m)         the
Company shall otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission
under the Securities Act and the Exchange Act, including Rule 172, notify the Holders promptly if the Company no longer satisfies
the conditions of Rule 172 and take such other actions as may be reasonably necessary to facilitate the registration of the Registrable
Securities hereunder; and make available to its security holders, as soon as reasonably practicable, but not later than the Availability
Date (as defined below), an earnings statement covering a period of at least twelve (12) months, beginning after the effective
date of each Registration Statement, which earning statement shall satisfy the provisions of Section l1(a) of the Securities Act,
including Rule 158 promulgated thereunder (for the purpose of this Section 3, "Availability Date" means the 45th day
following the end of the fourth fiscal quarter that includes the effective date of such Registration Statement, except that, if
such fourth fiscal quarter is the last quarter of the Company's fiscal year, "Availability Date" means the 90th day after
the end of such fourth fiscal quarter), in each case subject to extensions permissible under applicable law.

 

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4.           Registration
Expenses. All fees and expenses incident to the Company's performance of or compliance with its obligations under this Agreement
(excluding any underwriting discounts and selling commissions and all legal fees and expenses of legal counsel for any Holder)
shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (A) with respect to filings required to be made with any Trading Market on which the Common
Stock is then listed for trading, (B) with respect to compliance with applicable state securities or Blue Sky laws (including,
without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions
of the Registrable Securities and determination of the eligibility of the Registrable Securities for investment under the laws
of such jurisdictions as requested by the Holders) and (C) if not previously paid by the Company in connection with an Issuer Filing,
with respect to any filing that may be required to be made by any broker through which a Holder intends to make sales of Registrable
Securities with FINRA pursuant to FINRA Rule 5110, so long as the broker is receiving no more than a customary brokerage commission
in connection with such sale, (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable
Securities and of printing prospectuses if the printing of prospectuses is reasonably requested by the Holders of a majority of
the Registrable Securities included in the Registration Statement), (iii) messenger, telephone and delivery expenses of the Company,
(iv) fees and disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such
insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible for all of its internal expenses incurred
in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees
and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder.
In no event shall the Company be responsible for any underwriting, broker or similar fees or commissions of any Holder or,
except to the extent provided for in the Transaction Documents, any legal fees or other costs of the Holders.

 

5.          Indemnification.

 

(a)          Indemnification
by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify, defend and hold harmless each
Holder, the officers, directors, agents, general partners, managing members, managers, Affiliates and employees of each of them,
each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) and the officers, directors, general partners, managing members, managers, agents and employees of each such controlling Person,
to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including,
without limitation, reasonable costs of preparation and investigation and reasonable and documented attorneys' fees) and expenses
(collectively, "Losses"), as incurred, that arise out of or are based upon any untrue or alleged untrue statement
of a material fact contained in any Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement
thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission to state a material
fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus
or supplement thereto, in light of the circumstances under which they were made) not misleading, except to the extent, but only
to the extent, that (A) such untrue statements, alleged untrue statements, omissions or alleged omissions are based solely upon
information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein (including information
provided by any Holder in Annex B, Selling Shareholder Notice and Questionnaire), or to the extent that such information
relates to such Holder or such Holder's proposed method of distribution of Registrable Securities and was reviewed and approved
by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment
or supplement thereto (it being understood that each Holder has approved Annex A hereto for this purpose), or (B) in the
case of an occurrence of an event of the type specified in Section 3(c)(iii)-(v), related to the use by a Holder of an outdated
or defective Prospectus after the Company has notified such Holder in writing or electronic mail that the Prospectus is outdated
or defective and prior to the receipt by such Holder of the Advice contemplated and defined in Section 6(d) below, but only if
and to the extent that following the receipt of the Advice the misstatement or omission giving rise to such Loss would have been
corrected. The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding arising from
or in connection with the transactions contemplated by this Agreement of which the Company is aware. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of an Indemnified Party (as defined in Section 5(c))
and shall survive the transfer of the Registrable Securities by the Holders.

 

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(b)          Indemnification
by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted
by applicable law, from and against all Losses, as incurred, arising out of or are based upon any untrue or alleged untrue statement
of a material fact contained in any Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement
thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein (in the case of any Prospectus, or any form of prospectus
or supplement thereto, in light of the circumstances under which they were made) not misleading (i) to the extent, but only to
the extent, that such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing
to the Company by such Holder expressly for use therein (including information provided by any Holder in Annex B, Selling
Shareholder Notice and Questionnaire) or (ii) to the extent, but only to the extent, that such information relates to such Holder
or such Holder's proposed method of distribution of Registrable Securities and was reviewed and approved by such Holder expressly
for use in a Registration Statement (it being understood that the Holder has approved Annex A hereto for this purpose),
such Prospectus or such form of Prospectus or in any amendment or supplement thereto or (iii) in the case of an occurrence of an
event of the type specified in Section 3(c)(iii)-(v), to the extent, but only to the extent, related to the use by such Holder
of an outdated or defective Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or
defective and prior to the receipt by such Holder of the Advice contemplated in Section 6(d), but only if and to the extent that
following the receipt of the Advice the misstatement or omission giving rise to such Loss would have been corrected. In no
event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the net proceeds received
by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation.

 

(c)          Conduct
of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder
(an "Indemnified Party"), such Indemnified Party shall promptly notify the Person from whom indemnity is sought
(the "Indemnifying Party") in writing, and the Indemnifying Party shall have the right to assume the defense thereof,
including the employment of one counsel reasonably satisfactory to the Indemnified Party and the payment of all reasonable and
documented fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified
Party to give such written notice within a reasonable time of commencement of any such Proceeding shall not relieve the Indemnifying
Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined
by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have
materially and adversely prejudiced the Indemnifying Party in its ability to defend such Proceeding.

 

An Indemnified Party
shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has
agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of
such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party,
and such Indemnified Party shall have been advised by counsel that a conflict of interest exists if the same counsel were to represent
such Indemnified Party and the Indemnifying Party; provided, that the Indemnifying Party shall not be liable for the fees
and expenses of more than one separate firm of attorneys at any time for all Indemnified Parties. The Indemnifying Party shall
not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably
withheld, delayed or unreasonably conditioned. No Indemnifying Party shall, without the prior written consent of the Indemnified
Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement
includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

 

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Subject to the terms
of this Agreement, all documented fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent
incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section
5(c)) shall be paid to the Indemnified Party, as incurred, within twenty (20) Trading Days of written notice thereof to the Indemnifying
Party; provided, that the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees
and expenses applicable to such actions for which such Indemnified Party is finally judicially determined to not be entitled to
indemnification hereunder.

 

(d)          Contribution.
If a claim for indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party or insufficient to hold an
Indemnified Party harmless for any Losses, then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate
to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions
that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party
and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue
or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or
relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a
party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable
attorneys' or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party
would have been indemnified for such fees or expenses if the indemnification provided for in this Section 5(d) was available to
such party in accordance with its terms.

 

The parties
hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section 5(d), no Holder shall be required to contribute,
in the aggregate, any amount in excess of the amount by which the net proceeds actually received by such Holder from the sale of
the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty
of such fraudulent misrepresentation.

 

The indemnity
and contribution agreements contained in this Section 5 are in addition to any liability that the Indemnifying Parties may have
to the Indemnified Parties and are not in diminution or limitation of the indemnification provisions under the Purchase Agreement.

 

6.          Miscellaneous.

 

(a)          Remedies.
In the event of a breach by the Company or by a Holder of any of their obligations under this Agreement, each Holder or
the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement,
including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it
of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance
in respect of such breach, it shall waive the defense that a remedy at law would be adequate.

 

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(b)          No
Piggyback on Registrations; Prohibition on Filing Other Registration Statements. Other than, with respect to, the registration
rights granted in agreements listed on Annex C, neither the Company nor any of its security holders may include securities
of the Company in a Registration Statement hereunder and the Company shall not prior to the Effective Date enter into any agreement
providing any such right to any of its security holders. The Company shall not, from the date hereof until the date that is 30
days after the Effective Date of the Initial Registration Statement, prepare and file with the Commission a registration statement
relating to an offering for its own account under the Securities Act of any of its equity securities, other than (i) a registration
statement on Form S-8, (ii) in connection with an acquisition or similar transaction, on Form S-4, or (iii) a registration statement
to register for resale securities issued by the Company pursuant to acquisitions or similar transaction or strategic transactions
approved by a majority of the disinterested directors of the Company, provided that any such issuance shall only be to a Person
which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and
in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the
Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing
in securities. For the avoidance of doubt, the Company shall not be prohibited from preparing and filing with the Commission a
registration statement relating to an offering of Common Stock by existing shareholders of the Company under the Securities Act
pursuant to the terms of registration rights held by such shareholder or from filing amendments to registration statements filed
prior to the date of this Agreement.

 

(c)          Compliance.
Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable
to it (unless an exemption therefrom is available) in connection with sales of Registrable Securities pursuant to the Registration
Statement and shall sell the Registrable Securities only in accordance with a method of distribution described in the Registration
Statement.

 

(d)          Discontinued
Disposition. By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of a notice from the Company
of the occurrence of any event of the kind described in Section 3(c)(iii)-(v), such Holder will forthwith discontinue disposition
of such Registrable Securities under a Registration Statement until it is advised in writing (the ''Advice'') by the Company
that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company may provide
appropriate stop orders to enforce the provisions of this paragraph.

 

(e)          No
Inconsistent Agreements. Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the
Company or any of its Subsidiaries, on or after the date hereof, enter into any agreement with respect to its securities, that
would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions
hereof.

 

(f)          Amendments
and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented,
or waived unless the same shall be in writing and signed by the Company and Holders holding at least two-thirds of the then outstanding
Registrable Securities, provided that any party may give a waiver as to itself. Notwithstanding the foregoing, a waiver or consent
to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders and that does not
directly or indirectly affect the rights of other Holders may be given by Holders of all of the Registrable Securities to which
such waiver or consent relates; provided, that the provisions of this sentence may not be amended, modified, or supplemented
except in accordance with the provisions of the immediately preceding sentence. Notwithstanding the foregoing, if any such amendment,
modification or waiver would adversely affect in any material respect any Holder or group of Holders who have comparable rights
under this Agreement disproportionately to the other Holders having such comparable rights, such amendment, modification, or waiver
shall also require the written consent of the Holder(s) so adversely affected.

 

(g)          Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be delivered as
set forth in the Purchase Agreement; provided that the Company may deliver to each Holder the documents required to be delivered
to such Holder under Section 3(a) of this Agreement bye-mail to the e-mail addresses provided by such Holder to the Company solely
for such specific purpose.

 

(h)          Successors
and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each
of the parties and shall inure to the benefit of each Holder. Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities
under or by reason of this Agreement, except as expressly provided in this Agreement. The Company may not assign its rights (except
by merger or in connection with another entity acquiring all or substantially all of the Company's assets) or obligations hereunder
without the prior written consent of all the Holders of the then outstanding Registrable Securities. Each Holder may assign its
respective rights hereunder in the manner and to the Persons as permitted under the Purchase Agreement.

 

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(i)          Execution
and Counterparts. This Agreement may be executed in two or more counterparts, each of which when so executed shall be deemed
to be an original and, all of which taken together shall constitute 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 both parties need not sign
the same counterpart. In the event that any signature is delivered by facsimile transmission or by email 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 or “.pdf” signature were the original thereof.

 

(j)          Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined
in accordance with the provisions of the Purchase Agreement. 

 

(k)          Cumulative
Remedies. Except as provided in Section 2(c) with respect to Liquidated Damages, the remedies provided herein are cumulative
and not exclusive of any other remedies provided by law.

 

(1)         Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their good faith reasonable
efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would
have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.

 

(m)          Headings.
The headings in this Agreement are for convenience only and shall not limit or otherwise affect the meaning hereof.

 

(n)          Independent
Nature of Purchasers' Obligations and Rights. The obligations of each Purchaser under this Agreement are several and not joint
with the obligations of any other Purchaser hereunder, and no Purchaser shall be responsible in any way for the performance of
the obligations of any other Purchaser hereunder. The decision of each Purchaser to purchase the Preferred Shares pursuant to the
Transaction Documents has been made independently of any other Purchaser. Nothing contained herein or in any other agreement or
document delivered at any closing, 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 with respect to such obligations or the transactions contemplated by this Agreement.
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 Preferred
Shares or enforcing its rights under the Transaction Documents. Each Purchaser shall be entitled to protect and enforce its rights,
including, without limitation, the rights arising out of this Agreement, and it shall not be necessary for any other Purchaser
to be joined as an additional party in any Proceeding for such purpose. The Company acknowledges that each of the Purchasers has
been provided with the same Registration Rights Agreement for the purpose of closing a transaction with multiple Purchasers and
not because it was required or requested to do so by any Purchaser. 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 Purchsers.

 

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IN WITNESS WHEREOF, the parties have executed
this Registration Rights Agreement as of the date first written above.

 

	 	BNC Bancorp.
	 	 
	 	By:	 	 
	 	 	Name:	 
	 	 	Title:	 

 

[REMAINDER OF PAGE INTENTIONALLY
LEFT BLANK,

SIGNATURE PAGES OF HOLDERS TO FOLLOW]

 

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IN WITNESS WHEREOF, the parties have executed
this Registration Rights Agreement as of the date first written above.

 

	 	NAME OF INVESTING ENTITY
	 	 
	 	AUTHORIZED SIGNATORY
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

	 	ADDRESS FOR NOTICE
	 	 
	 	c/o:	 
	 	 	 
	 	Street:	 
	 	 	 
	 	City/State/Zip:	 
	 	 	 
	 	Attention:	 
	 	 	 
	 	Tel:	 
	 	 	 
	 	Fax:	 
	 	 	 
	 	Email:	 

 

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Annex A 

 

PLAN OF DISTRIBUTION 

 

We are registering
the Securities issued to the selling shareholder to permit the resale of these Securities by the holders of the Securities from
time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling shareholders
of the Securities. We will bear all fees and expenses incident to our obligation to register the Securities.

 

The selling shareholders
may sell all or a portion of the Securities beneficially owned by them and offered hereby from time to time directly or through
one or more underwriters, broker-dealers or agents. If the Securities are sold through underwriters or broker-dealers, the
selling shareholders will be responsible for underwriting discounts or commissions or agent's commissions. The Securities may be
sold on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale,
in the over-the-counter market or in transactions otherwise than on these exchanges or systems or in the over the-counter market
and in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined
at the time of sale, or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions.
The selling shareholders may use anyone or more of the following methods when selling Securities:

 

		·	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

 

		·	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;

 

		·	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

 

		·	an exchange distribution in accordance with the rules of the applicable exchange;

 

		·	privately negotiated transactions;

 

		·	settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a
part;

 

		·	broker-dealers may agree with the selling shareholders to sell a specified number of such securities at a stipulated price
per share;

 

		·	through the writing or settlement of options or other hedging transactions, whether such options are listed on an options exchange
or otherwise;

 

		·	a combination of any such methods of sale; and

 

		·	any other method permitted pursuant to applicable law.

 

The selling
shareholders also may resell all or a portion of the Securities in open market transactions in reliance upon Rule 144 under the
Securities Act, as permitted by that rule, or Section 4(1) under the Securities Act, if available, rather than under this prospectus,
provided that they meet the criteria and conform to the requirements of those provisions.

 

Broker-dealers
engaged by the selling shareholders may arrange for other broker-dealers to participate in sales. If the selling shareholders effect
such transactions by selling Securities to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers
or agents may receive commissions in the form of discounts, concessions or commissions from the selling shareholders or commissions
from purchasers of the Securities for whom they may act as agent or to whom they may sell as principal. Such commissions will be
in amounts to be negotiated, but, except as set forth in a supplement to this prospectus, in the case of an agency transaction
will not be in excess of a customary brokerage commission in compliance with NASD Rule 2440; and in the case of a principal transaction
a markup or markdown in compliance with NASD Rule IM 2440.

 

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In connection
with sales of the Securities or otherwise, the selling shareholders may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of the Securities in the course of hedging in positions they
assume. The selling shareholders may also sell Securities short and if such short sale shall take place after the date that this
Registration Statement is declared effective by the Commission, the selling shareholders may deliver Securities covered by this
prospectus to close out short positions and to return borrowed shares in connection with such short sales. The selling shareholders
may also loan or pledge Securities to broker-dealers that in turn may sell such shares, to the extent permitted by applicable law.
The selling shareholders may also enter into option or other transactions with broker-dealers or other financial institutions or
the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution
of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction). Notwithstanding the foregoing, the selling shareholders have
been advised that they may not use shares registered on this registration statement to cover short sales of our Securities made
prior to the date the registration statement, of which this prospectus forms a part, has been declared effective by the SEC.

 

The selling shareholders
may, from time to time, pledge or grant a security interest in some or all of the Securities owned by them and, if they default
in the performance of their secured obligations, the pledgees or secured parties may offer and sell the Securities from time to
time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the
Securities Act of 1933, as amended, amending, if necessary, the list of selling shareholders to include the pledgee, transferee
or other successors in interest as selling shareholders under this prospectus. The selling shareholders also may transfer and donate
the Securities in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the
selling beneficial owners for purposes of this prospectus.

 

The selling shareholders
and any broker-dealer or agents participating in the distribution of the Securities may be deemed to be "underwriters"
within the meaning of Section 2(11) of the Securities Act in connection with such sales. In such event, any commissions
paid, or any discounts or concessions allowed to, any such broker-dealer or agent and any profit on the resale of the shares purchased
by them may be deemed to be underwriting commissions or discounts under the Securities Act. Selling Shareholders who are "underwriters"
within the meaning of Section 2(11) of the Securities Act will be subject to the applicable prospectus delivery requirements of
the Securities Act and may be subject to certain statutory liabilities of, including but not limited to, Sections 11, 12
and 17 of the Securities Act and Rule 10b-5 under the Securities Exchange Act of 1934, as amended, or the Exchange Act.

 

Each selling shareholder
has informed the Company that it is not a registered broker-dealer and does not have any written or oral agreement or understanding,
directly or indirectly, with any person to distribute the Securities. Upon the Company being notified in writing by a selling shareholder
that any material arrangement has been entered into with a broker-dealer for the sale of Securities through a block trade, special
offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus
will be filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing (i) the name of each such selling shareholder
and of the participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such the Securities were
sold, (iv) the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s)
did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, and (vi) other
facts material to the transaction. In no event shall any broker-dealer receive fees, commissions and markups, which, in
the aggregate, would exceed eight percent (8%).

 

Under the
securities laws of some states, the Common Stock may be sold in such states only through registered or licensed brokers or dealers.
In addition, in some states the Common Stock may not be sold unless such shares have been registered or qualified for sale
in such state or an exemption from registration or qualification is available and is complied with.

 

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There can be no assurance that
any selling shareholder will sell any or all of the Securities registered pursuant to the shelf registration statement, of which
this prospectus forms a part.

 

Each selling shareholder
and any other person participating in such distribution will be subject to applicable provisions of the Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder, including, without limitation, to the extent applicable, Regulation
M of the Exchange Act, which may limit the timing of purchases and sales of any of the Securities by the selling shareholder and
any other participating person. To the extent applicable, Regulation M may also restrict the ability of any person engaged in the
distribution of the Securities to engage in market-making activities with respect to the Securities. All of the foregoing may affect
the marketability of the Securities and the ability of any person or entity to engage in market-making activities with respect
to the Securities.

 

We will
pay all expenses of the registration of the Securities pursuant to the registration rights agreement, including, without limitation,
Securities and Exchange Commission filing fees and expenses of compliance with state securities or "blue sky" laws; provided,
that each selling shareholder will pay all underwriting discounts and selling commissions, if any and any related legal expenses
incurred by it. We will indemnify the selling shareholders against certain liabilities, including some liabilities under the Securities
Act, in accordance with the registration rights agreement, or the selling shareholders will be entitled to contribution. We may
be indemnified by the selling shareholders against civil liabilities, including liabilities under the Securities Act, that may
arise from any written information furnished to us by the selling shareholders specifically for use in this prospectus, in accordance
with the related registration rights agreements, or we may be entitled to contribution.

 

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Annex B 

 

BNC BANCORP.

 

SELLING SHAREHOLDER NOTICE AND QUESTIONNAIRE

 

The undersigned
holder of securities of BNC Bancorp., a North Carolina corporation (the "Company"), issued pursuant to a certain
Securities Purchase Agreement by and among the Company and the Purchasers named therein, dated as of May 31, 2012, understands
that the Company intends to file with the Securities and Exchange Commission a registration statement on Form S-3 (the "Resale
Registration Statement") for the registration and the resale under Rule 415 of the Securities Act of 1933, as amended
(the "Securities Act"), of the Registrable Securities in accordance with the terms of a certain Registration Rights
Agreement by and among the Company and the Purchasers named therein, dated as of May 31, 2012 (the "Agreement"). All
capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Agreement.

 

In order
to sell or otherwise dispose of any Registrable Securities pursuant to the Resale Registration Statement, a holder of Registrable
Securities generally will be required to be named as a selling shareholder in the related prospectus or a supplement thereto (as
so supplemented, the "Prospectus"), deliver the Prospectus to purchasers of Registrable Securities (including
pursuant to Rule 172 under the Securities Act) and be bound by the provisions of the Agreement (including certain indemnification
provisions, as described below). Holders must complete and deliver this Notice and Questionnaire in order to be named as selling
shareholders in the Prospectus. Holders of Registrable Securities who do not complete, execute and return this Notice and Questionnaire
within ten (10) Trading Days following the date of the Agreement (1) will not be named as selling shareholders in the Resale Registration
Statement or the Prospectus and (2) may not use the Prospectus for resales of Registrable Securities.

 

Certain
legal consequences arise from being named as a selling shareholder in the Resale Registration Statement and the Prospectus. Holders
of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or
not named as a selling shareholder in the Resale Registration Statement and the Prospectus.

NOTICE

 

The undersigned
holder (the "Selling Shareholder") of Registrable Securities hereby gives notice to the Company of its intention
to sell or otherwise dispose of Registrable Securities owned by it and listed below in Item (3), unless otherwise specified in
Item (3), pursuant to the Resale Registration Statement. The undersigned, by signing and returning this Notice and Questionnaire,
understands and agrees that it will be bound by the terms and conditions of this Notice and Questionnaire and the Agreement.

 

The undersigned hereby provides
the following information to the Company and represents and warrants that such information is accurate and complete:

 

QUESTIONNAIRE

 

		1.	Name.

 

		(a)	Full Legal Name of Selling
Shareholder:

 

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		(b)	Full Legal Name of Registered
Holder (if not the same as (a) above) through which Registrable Securities Listed in Item 3 below are
held:

 

		(c)	Full Legal Name of Natural
Control Person (which means a natural person who directly or indirectly alone or with others has power to vote
or dispose of the securities covered by the questionnaire) :

 

2. Address for Notices to Selling Shareholder:

 

	Telephone:	 
	Fax:	 
	Contact Person:	 
	E-mail address of Contact Person:

 

3. Beneficial Ownership of Registrable Securities Issuable Pursuant
to the Purchase Agreement:

 

		(a)	Type and Number of Registrable
Securities beneficially owned and issued pursuant to the Agreement:

 

		(b)	Number of Securities to be
registered pursuant to this Notice for resale:

 

4. Broker-Dealer Status:

 

		(a)	Are you a broker-dealer?

 

Yes __

 

No ___

 

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		(b)	If "yes" to Section
4(a), did you receive your Registrable Securities as compensation for investment banking services to the Company?

 

Yes             No

 

Note: If no, the Commission's
staff has indicated that you should be identified as an underwriter in the Registration Statement.

 

		(c)	Are you an affiliate of a
broker-dealer?

 

Yes             No

 

Note: If yes, provide a narrative explanation below:

 

		(c)	If you are an affiliate of
a broker-dealer, do you certify that you bought the Registrable Securities in the ordinary course of business, and at the time
of the purchase of the Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with
any person to distribute the Registrable Securities?

 

Yes             No

 

Note: If no, the Commission's
staff has indicated that you should be identified as an underwriter in the Registration Statement.

 

5. Beneficial Ownership of Other Securities of the
Company Owned by the Selling Shareholder.

 

Except as set forth below in this Item 5, the
undersigned is not the beneficial or registered owner of any securities of the Company other than the Registrable Securities listed
above in Item 3. 

 

Type and amount of other securities beneficially
owned:

 

6. Relationships with the Company:

 

Except as set forth below, neither the undersigned
nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity securities of the
undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or
affiliates) during the past three years. 

 

State any exceptions here:

 

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7. Plan of Distribution:

 

The undersigned has reviewed
the form of Plan of Distribution attached as Annex A to the Registration Rights Agreement, and hereby confirms that, except as
set forth below, the information contained therein regarding the undersigned and its plan of distribution is correct and complete.

 

State any exceptions here:

 

***********

 

By signing below, the undersigned
consents to the disclosure of the information contained herein in its answers to Items (I) through (7) above and the inclusion
of such information in the Resale Registration Statement and the Prospectus. The undersigned understands that such information
will be relied upon by the Company in connection with the preparation or amendment of any such Registration Statement and the Prospectus.

 

By signing below, the undersigned
acknowledges that it understands its obligation to comply, and agrees that it will comply, with the provisions of the Exchange
Act and the rules and regulations thereunder, particularly Regulation M in connection with any offering of Registrable Securities
pursuant to the Resale Registration Statement. The undersigned also acknowledges that it understands that the answers to this Questionnaire
are furnished for use in connection with Registration Statements filed pursuant to the Registration Rights Agreement and any amendments
or supplements thereto filed with the Commission pursuant to the Securities Act.

 

I confirm that, to the best of my knowledge and belief, the
foregoing statements (including without limitation the answers to this Questionnaire) are correct.

 

IN WITNESS WHEREOF the undersigned, by authority
duly given, has caused this Questionnaire to be executed and delivered either in person or by its duly authorized agent.

 

Dated:

 

Beneficial Owner:

	By:	 	 

Name:

Title:

 

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Annex C

 

		1.	Registration rights contained in that certain Investment Agreement dated as of June 14, 2010 between the Company and Aquiline
BNC Holdings LLC

 

		2.	Registration Rights Agreement contained in those certain Subscription and Registration Rights Agreements dated June 14, 2010,
by and between the Company and certain investors

 

		3.	Letter Agreement dated December 5, 2008 between the Company and the United States Department of the Treasury

 

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EXHIBIT C-1 

 

ACCREDITED INVESTOR QUESTIONNAIRE 

 

(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)

 

To:        BNC Bancorp. 

 

This Investor Questionnaire
(“Questionnaire”) must be completed by each potential investor in connection with the offer and sale of shares
of mandatorily convertible cumulative nonvoting perpetual Preferred stock, $1,000.00 liquidation preference per share (the “Preferred
Shares”), of BNC Bancorp., a North Carolina corporation (the “Corporation”). The Preferred Shares
are being offered and sold by the Corporation without registration under the Securities Act of 1933, as amended (the “Securities
Act”), and the securities laws of certain states, in reliance on the exemptions contained in Section 4(2) of the Securities
Act and on Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state laws. The Corporation
must determine that a potential investor meets certain suitability requirements before offering or selling Preferred Shares to
such investor. The purpose of this Questionnaire is to assure the Corporation 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 Corporation to provide a completed copy of this Questionnaire
to such parties as the Corporation deems appropriate in order to ensure that the offer and sale of the Preferred Shares will not
result in a violation of the Securities Act or the securities laws of any state and that you otherwise satisfy the suitability
standards applicable to purchasers of the Preferred 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 Preferred Shares:

 

Business Address:

 

	 	(Number and Street)	 
	 	 	 
	(City)	(State)	(Zip Code)

 

Telephone Number:

 

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

 

	Type of entity: 	 

 

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

 

Yes ___

 

No ___

 

If an individual: 

 

Residence Address:

 

Telephone Number:

 

	Age: 	 	 	Citizenship: 	 	 	Where registered to vote: 	 

 

Set forth in the space provided below the state(s),
if any, in the United States in which you maintained your residence during the past two years and the dates during which you resided
in each state:

 

Are you a director or executive officer of the Corporation?

 

Yes

 

No

 

	Social Security or Taxpayer Identification No. 	 

 

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PART B.          ACCREDITED INVESTOR OUESTIONNAIRE

 

In order for the Company to
offer and sell the Preferred 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 Preferred 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;

 

_ (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 Preferred 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 Preferred 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 purchase exceeds $1,000,000 (See
Note 11 below);

 

_(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 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 Corporation;

 

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_(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.

 

Note 11. For purposes of calculating
net worth under paragraph (11):

 

(A) The person’s primary residence
shall not be included as an asset;

 

(B) Indebtedness that is secured by the
person’s primary residence, up to the estimated fair market value of the primary residence at the time of the sale of securities,
shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of sale of securities
exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the
amount of such excess shall be included as a liability); and

 

(C) Indebtedness that is secured by the
person’s primary residence in excess of the estimated fair market value of the primary residence at the time of the sale
of securities shall be included as a liability.

 

		A.	FOR EXECUTION BY AN INDIVIDUAL:

 

	 	By
	 	 
	Date	 
	 	 
	 	Print Name:

 

		B.	FOR EXECUTION BY AN ENTITY:

 

	Entity Name:
	 	 
	 	By
	 	 
	Date	 
	 	 
	 	Print Name:	 	 
	 	 
	 	Title:

 

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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:

 

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EXHIBIT C-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 Preferred 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 Preferred 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:

 

    	73

    	 

    

 

EXHIBIT D 

 

Form of Opinion of Company Counsel*

 

		1.	The Company is a corporation in existence under the laws of the State of North Carolina.

 

		2.	The Company has the corporate power to execute, deliver and perform its obligations under the Transaction
Documents, including to issue the Preferred Shares and, upon obtaining Shareholder Approvals, the Underlying Shares.

 

		3.	The Company is a registered bank holding company under the Bank Holding Company Act of 1956, as
amended (the “BHCA”).

 

		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.	The Company has authorized the execution, delivery and performance of each of the Transaction Documents
by all necessary corporate action, including the issuance of the Preferred Shares and, upon obtaining Shareholder Approvals, the
Underlying Shares, and the execution and filing of Articles of Amendment to create a class of preferred stock entitled “Mandatorily
Convertible Cumulative Non-Voting Preferred Stock, Series C” (the “Series C Preferred Stock Articles of Amendment”)
and Articles of Amendment to create a class of preferred stock entitled “Mandatorily Convertible Cumulative Non-Voting Preferred
Stock, Series B-1” (the “Series B-1 Preferred Stock Articles of Amendment”).

 

		6.	The Transaction Documents have been duly 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 is
valid, binding and enforceable against the Company in accordance with its terms.

 

		7.	The execution and delivery of each of the Transaction Documents by the Company, the consummation
by the Company of the transactions provided for in the Transaction Documents, and the performance by the Company of its obligations
under the Transaction Documents, including the issuance of the Preferred Shares and, upon obtaining Shareholder Approvals, the
Underlying Shares, do not: (a) violate any provision of the Company’s Articles of Incorporation, as amended to date, or Bylaws;
(b) violate or constitute a breach of or default under any contract, agreement or instrument filed as an exhibit to the Company’s
Annual Report on Form 10-K for the year ended December 31, 2011, or Current Report on Form 8-K filed on May 1, 20121;
or (c) violate any applicable law or any order of any court or governmental authority that is binding on the Company or any of
its assets.

 

 

 1
This opinion will be supplemented to include any material contract, agreement or instrument entered into by the Company
subsequent to the execution of the SPA and prior to the delivery of the opinion.

 

    	74

    	 

    

 

		8.	No consent, approval, authorization or other action by, or filing or registration with, any Federal
governmental authority or any governmental authority of the State of North Carolina is required to be obtained or made by the Company
for the execution and delivery by the Company of each of the Transaction Documents, for consummation by the Company of the transactions
provided for therein, or for the performance by the Company of its obligations under the Transaction Documents, except for consents,
approvals, authorizations, actions, filings and registrations (a) in connection with the filing of each of the Series C Preferred
Stock Articles of Amendment and the Series B-1 Preferred Stock Articles of Amendment with the Secretary of State of the State of
North Carolina, which filing has been made; (b) as may be required by federal securities laws with respect to the Company’s
obligations under the Registration Rights Agreement; (c) related to required blue sky filings; (d) in connection with the filing
of a Form D pursuant to Securities and Exchange Commission Regulation D; (e) required in accordance with Section 4.6 of the Agreement;
(f) in accordance with the issuance of the Preferred Shares and the Underlying Common Stock on NASDAQ; and (g) as required under
that certain Purchase and Assumption Agreement Whole Bank All Deposits among the Federal Deposit Insurance Corporation, receiver
of Beach First National Bank, Myrtle Beach, South Carolina, Federal Deposit Insurance Corporation and Bank of North Carolina, dated
as of April 9, 2010.

 

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

 

		10.	The Preferred Shares to be issued to the Purchasers pursuant to the Agreement have been duly authorized
by all necessary corporate action on the part of the Company and, when issued, delivered and paid for as provided for in the Agreement,
will be validly issued, fully paid and nonassessable and will not be issued in violation of any preemptive right. The Underlying
Shares to be issued pursuant to the Series C Articles of Amendment and the Series B-1 Articles of Amendment have been authorized
on the part of the Company, have been duly and validly reserved for issuance by all necessary corporate action on the part of the
Company and, when issued as provided for in each respective Articles of Amendment, will be validly issued, fully paid and nonassessable
and will not be issued in violation of any preemptive right.

 

		11.	Each of the Series C Preferred Stock Articles of Amendment and the Series B-1 Preferred Stock Articles
of Amendment have been filed with the Secretary of State of the State of North Carolina.

 

		12.	The Company is not and, after giving effect to the issuance of the Preferred Shares, will not be
on the date hereof an “investment company” as defined in the Investment Company Act of 1940.

 

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

 

    	75

    	 

    

 

EXHIBIT E 

 

Form of Secretary’s Certificate

 

The undersigned hereby certifies that he
is the duly elected, qualified and acting Secretary of BNC Bancorp., a North Carolina 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 May 31, 2012, by and among the Company and the investors party thereto (the
“Securities 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 Securities 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 [____________], 2012. 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.	The Company’s Articles of Incorporation, as amended, are attached hereto as Exhibit B;
its Bylaws are attached hereto as Exhibit C. Such Articles of Incorporation, as amended, and Bylaws, constitute true, correct
and complete copies of the Articles of Incorporation, as amended, and Bylaws as in effect on the date hereof.

 

		3.	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 Securities Purchase Agreement and each of the Transaction Documents on behalf of the
Company, and the signature appearing opposite such person’s name below is such person’s genuine signature.

 

	Name	 	Position	 	Signature

 

    	76

    	 

    

 

IN WITNESS WHEREOF, the undersigned has hereunto set his hand
as of this ___ day of June, 2012.

 

	 	 	 
	 	Secretary

 

I, [
____________], [Chief Financial Officer], 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 Financial Officer]

 

    	77

    	 

    

 

	 	Resolutions	EXHIBIT A

  

    	78

    	 

    

 

	 	Articles of Incorporation	EXHIBIT B

 

    	79

    	 

    

 

	 	Bylaws	EXHIBIT C

 

    	80

    	 

    

 

EXHIBIT F

 

Form of Officer’s Certificate

 

The undersigned, the
[Chief Financial Officer] [Chief Executive Officer] of BNC Bancorp, a North Carolina corporation (the “Company”),
pursuant to Section 5.1(g) of the Securities Purchase Agreement, dated as of May 31, 2012] by and among the Company and the
investors signatory thereto (the “Securities Purchase Agreement”), hereby represents, warrants and certifies
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
has executed this certificate this ___ day of June, 2012.

 

	 	 
	 	
        [Chief Financial Officer] [Chief Executive

        Officer]

 

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EXHIBIT G

 

Subsidiaries of the Company

 

Subsidiaries of the Company

 

Bank of North Carolina

BNC Bancorp Capital Trust I

BNC Bancorp Capital Trust II

BNC Capital Trust III

BNC Capital Trust IV

BFNM Building, LLC

 

Subsidiaries of Bank of North Carolina

 

BNC Credit Corp.

Sterling Real Estate Holdings, LLC

Sterling Real Estate Development
of North Carolina, LLC

 

    	82

    	 

    

 

EXHIBIT H

 

Form of Escrow Agreement

 

    	83

    	 

    

 

Exhibit I

 

List of Agreements Containing Registration
Rights

 

		1.	Registration rights contained in that certain Investment Agreement dated as of June 14, 2010 between the Company and Aquiline
BNC Holdings LLC

 

		2.	Registration Rights Agreement contained in those certain Subscription and Registration Rights Agreements dated June 14, 2010,
by and between the Company and certain investors

 

		3.	Letter Agreement dated December 5, 2008 between the Company and the United States Department of the Treasury

 

    	84

    	 

    

 

Exhibit J

 

Form of Management Rights Letter

 

    	85

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