Document:

Credit Agreement Amendment Exhibit

Exhibit 10.1

FIRST AMENDMENT TO CREDIT AGREEMENT

This FIRST AMENDMENT TO CREDIT AGREEMENT (the “Amendment”) dated as of June 29, 2015, is entered into among Compass Group Diversified Holdings LLC, a Delaware limited liability company (the “Borrower”), the Lenders signatory hereto, US Bank National Association, as an L/C Issuer and Bank of America, N.A., as Administrative Agent, Swing Line Lender and an L/C Issuer.  All capitalized terms used herein and not otherwise defined herein shall have the meanings given to such terms in the Credit Agreement (as defined below).

RECITALS

WHEREAS, the Borrower, the Lenders, US Bank National Association, as an L/C Issuer and Bank of America, N.A., as Administrative Agent, Swing Line Lender and an L/C Issuer entered into that certain Credit Agreement dated as of June 6, 2014 (as amended or otherwise modified from time to time, the “Credit Agreement”); and

WHEREAS, the Borrower has requested that the Lenders and the L/C Issuers amend the Credit Agreement as set forth below;

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.    Amendments.  The Credit Agreement is hereby amended as follows:

(a)    The following is added at the end of the list of “EXHIBITS” in the table of contents:

(i)    Form of Existing Portfolio Company Classification Approval 

(b)    The following definitions are inserted in Section 1.01 in the proper alphabetical order:

“Clean Earth” means CEHI Acquisition Corporation, a Delaware corporation.

“First Amendment Effective Date” means June 29, 2015.

“Leverage Increase Period” has the meaning specified in Section 7.11(a).
    
“Sterno” means SternoCandleLamp Holdings, Inc., a Delaware corporation.

(c)    The following definitions appearing in Section 1.01 are amended and restated in their entireties to read as follows:

“Base Rate” means for any day a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 0.50%, (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate” and (c) the Eurodollar Rate plus 1.00%; provided, that, if the Base Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.  The “prime rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.  Any change in such prime rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

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“Combined Eligible Availability” means, at any time, the sum of (a) the Fox Availability at such time plus (b) the lesser of (i) the sum of (x) the combined total of the Availability for each Existing Portfolio Company at such time plus (y) the combined total of the Availability for each New Portfolio Company at such time and (ii) the aggregate principal balance of the Qualified Intercompany Debt then outstanding; provided, that if the aggregate amount of the Combined Eligible Availability attributable to any one Portfolio Company, or any group of Portfolio Companies operating in the same business industry, exceeds 40% with respect to Portfolio Companies other than American Furniture or 35% with respect to American Furniture, then any such excess amounts shall be excluded from the amount of Combined Eligible Availability (provided, that Required Revolving Lenders may, in their reasonable credit judgment, elect to require that Portfolio Companies arising after the Closing Date be assigned a concentration level of 35% percent instead of 40%, such election, if made, to occur at the time of and in connection with such Portfolio Company first attaining such status hereunder); provided further, that if the aggregate amount of the Combined Eligible Availability attributable to Portfolio Companies organized in Canada (excluding for this purpose any such Portfolio Companies with respect to which perfected, first priority Liens on substantially all of their assets have been granted to the Borrower pursuant to the applicable Qualified Intercompany Debt Documents) exceeds 15% of the total Combined Eligible Availability, then any such excess amounts shall be excluded from the amount of Combined Eligible Availability.  

“Existing Portfolio Companies” means (i) Advanced Circuits, together with its Wholly-Owned Subsidiaries as of the Closing Date, (ii) American Furniture, together with its Wholly-Owned Subsidiaries as of the Closing Date, (iii) Tridien, together with its Wholly-Owned Subsidiaries as of the Closing Date, (iv) Ergo Baby, together with its Wholly-Owned Subsidiaries as of the Closing Date, (v) Liberty Safe, together with its Wholly-Owned Subsidiaries as of the Closing Date, (vi) CamelBak, together with its Wholly-Owned Subsidiaries as of the Closing Date, (vii) Arnold Magnetics, together with its Wholly-Owned Subsidiaries as of the Closing Date, (viii) Clean Earth, together with its Wholly-Owned Subsidiaries as of the First Amendment Effective Date, (ix) Sterno, together with its Wholly-Owned Subsidiaries as of the First Amendment Effective Date, and (x) any Target in a Permitted Eligible Acquisition or any New Portfolio Company with respect to which, in each case of any such Target or New Portfolio Company, a classification or reclassification as an Existing Portfolio Company has been approved by Required Revolving Lenders in their sole discretion (it being agreed and understood that (A) Lenders shall make reasonable efforts to indicate their response within fifteen (15) days of receiving a request for a classification or reclassification of any such Target or New Portfolio Company as an Existing Portfolio Company, and (B) any Lender that approves the classification or reclassification of such Target or New Portfolio Company as an Existing Portfolio Company shall deliver to the Administrative Agent, together with its response, a written approval in the form of Exhibit J), in each case to the extent that any such company has become a Subsidiary of the Borrower pursuant to a Permitted Eligible Acquisition and remains a Subsidiary of the Borrower.

“Loan Notice” means a notice of (a) a Borrowing of Revolving Loans, the Term Loan or a term loan under an Incremental Term Facility, (b) a conversion of Loans from one Type to the other, or (c) a continuation of Eurodollar Rate Loans, in each case pursuant to Section 2.02(a), which shall be substantially in the form of Exhibit A or such other form as may be approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower.

“Qualified Intercompany Debt Documents” means, in respect of any Portfolio Company, (i) a reasonable and customary senior loan agreement (that includes reasonable and customary representations and warranties, affirmative, negative and financial covenants and events of default) between the Borrower, as the sole lender, and such Portfolio Company, as the borrower or a co-borrower thereunder, as such loan agreement may be amended from time to time in compliance with the provisions of this Agreement, (ii) guaranty documentation pursuant to which all Subsidiaries of such Portfolio Company and/or of the other borrowers, as applicable, under such loan agreement guaranty 

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(together with any parent companies of such Portfolio Company or co-borrowers that are Subsidiaries of the Borrower) all of the obligations under such loan agreement, and (iii) collateral documents pursuant to which the Borrower is provided with a perfected, first-priority (subject to customary exceptions provided in the applicable loan documentation) Lien in substantially all of the real and personal property of such Portfolio Company and such co-borrowers (if any) under such loan agreement, and of the guarantors under such guaranty documentation, to secure all of the obligations under such loan agreement and related Intercompany Debt Documents, including a security agreement applicable to all of the equity interests owned by and substantially all of the assets of such borrowers and guarantors, UCC financing statements covering all of the assets of such borrowers and guarantors that are properly filed in the respective jurisdictions of organization for such companies, real estate mortgages for any real estate of such borrowers and guarantors, control agreements with respect to the deposit accounts of such borrowers and guarantors and insurance documentation whereby the Borrower has been named as loss payee (and, if applicable, mortgagee) in respect of all policies of property and casualty insurance of such borrowers and guarantors; provided, that notwithstanding the foregoing, it is agreed that (w) Portfolio Companies (or any such co-borrowers) organized in Canada and their Subsidiaries (other than any such Subsidiary that (i) is organized in the United States and is treated as a C-corporation for U.S. federal income tax purposes and (ii) has not been determined by the Administrative Agent, in its sole discretion, to be immaterial to the assets, operations and/or income of such Portfolio Company and its Subsidiaries as a whole) will not be required to provide collateral to the Borrower to secure the obligations under such loan agreement and related Intercompany Debt Documents, (x) if CFCs that are Subsidiaries of a Portfolio Company organized in the United States collectively contribute 15% or less of the aggregate amount of Portfolio Company EBITDA of such Portfolio Company, such CFCs shall not be required to deliver guarantees in respect of such Portfolio Company’s Qualified Intercompany Debt and the collateral delivery requirements in respect of such CFCs shall be limited to customary pledge documentation pursuant to which 65% of the total outstanding voting equity interests of such CFCs and 100% of all outstanding non-voting equity interests of such CFCs are pledged to secure such Portfolio Company’s Qualified Intercompany Debt (excluding equity interests in a CFC owned by another CFC) and (y) if CFCs that are Subsidiaries of a Portfolio Company organized in the United States collectively contribute more than 15% of the aggregate amount of Portfolio Company EBITDA of such Portfolio Company, to the extent required by the Administrative Agent in its discretion or the Required Lenders in their discretion such CFCs shall be required to deliver customary guarantees in respect of such Portfolio Company’s Qualified Intercompany Debt and such CFCs and their immediate parent companies shall be required to deliver customary pledge and collateral documentation providing for Liens in all of the equity interests and substantially all of the assets of such CFCs securing such Portfolio Company’s Qualified Intercompany Debt. 

“Responsible Officer” means the chief executive officer, president, chief financial officer, manager, treasurer, assistant treasurer or controller of the Borrower and, solely for purposes of the delivery of incumbency certificates, the secretary or any assistant secretary of the Borrower and, solely for purposes of notices given pursuant to Article II, any other officer of the Borrower so designated by any of the foregoing officers in a notice to the Administrative Agent or any other officer or employee of the Borrower designated in or pursuant to an agreement between the Borrower and the Administrative Agent.  Any document delivered hereunder that is signed by a Responsible Officer of the Borrower shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of the Borrower and such Responsible Officer shall be conclusively presumed to have acted on behalf of the Borrower.  To the extent requested by the Administrative Agent, each Responsible Officer will provide an incumbency certificate and appropriate authorization documentation, in form and substance reasonably satisfactory to the Administrative Agent.

“Swing Line Loan Notice” means a notice of a Borrowing of Swing Line Loans pursuant to Section 2.04(b), which shall be substantially in the form of Exhibit B or such other form as may be 

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approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower.

(d)    Clause (b) of the definition of “Change of Control” appearing in Section 1.01 is amended and restated in its entirety to read as follows:

(b)    during any period of 24 consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Borrower cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body;

(e)    The two provisos in the definition of “Eurodollar Base Rate” appearing in Section 1.01 are amended and restated in their entireties to read as follows:

provided, that, (i) to the extent a comparable or successor rate is approved by the Administrative Agent in connection herewith, the approved rate shall be applied in a manner consistent with market practice; provided, further, that, to the extent such market practice is not administratively feasible for the Administrative Agent, such approved rate shall be applied in a manner as otherwise reasonably determined by the Administrative Agent and (ii) if the Eurodollar Base Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

(f)    Clauses (v), (vi), (xiv) and (xv) of the definition of “Permitted Eligible Acquisition” appearing in Section 1.01 are amended and restated in their entireties to read as follows:

(v)    after giving effect to such Acquisition and the incurrence of any Loans and other Indebtedness in connection therewith, the Borrower shall be in compliance on a Pro Forma Basis with the covenants set forth in Section 7.11 (giving effect to any election by the Borrower to institute a Leverage Increase Period in connection with such Permitted Eligible Acquisition pursuant to Section 7.11(a)) recomputed for the twelve-month period ending on the last day of the most recently ended month for which a Compliance Certificate has been delivered to the Administrative Agent in accordance with the provisions of this Agreement;
(vi)     such Acquisition shall only involve a Target organized within the United States or Canada (with all Subsidiaries of such Target, subject to the proviso below, organized within the United States or, with respect to a Target organized within Canada, organized within Canada) and/or business and assets located in the United States or Canada; provided, that (A) the provisions of this clause (vi) shall not apply to add-on Acquisitions of Targets and/or businesses and assets outside of the United States or Canada or Acquisitions of Targets organized within the United States or Canada that have Subsidiaries organized outside of the United States or Canada so long as the Administrative Agent has received financial data that is reasonably acceptable to the Administrative Agent which demonstrates that, after giving effect to any such Acquisition (either as a result of the add-on Acquisition of Targets and/or businesses and assets outside of the United States or Canada by an Existing Portfolio Company or a New Portfolio Company or as a result of the percentage of Portfolio Company EBITDA attributable to Subsidiaries organized outside of the United States or Canada or businesses and assets located outside of the United States or Canada of the Target in any Acquisition that is to become a Portfolio Company), no more than 25% of the aggregate amount of Portfolio Company EBITDA of the applicable Portfolio Company is attributable to Subsidiaries, businesses and assets outside of the 

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United States (in the case of Portfolio Companies organized within the United States) and Canada (in the case of Portfolio Companies organized in Canada and in the case of Portfolio Companies organized in the United States to the extent that the Subsidiaries that are organized in Canada of the applicable Portfolio Company organized in the United States become guarantors under the Intercompany Debt Documents of such Portfolio Company), and (B) after giving effect to any Acquisition of a Target organized in Canada, no more than 25% of the aggregate Portfolio Company EBITDA of all Portfolio Companies, calculated on a Pro Forma Basis, is attributable to Portfolio Companies organized in Canada and their Subsidiaries (excluding for this purpose any such Portfolio Companies with respect to which perfected, first priority Liens on substantially all of their assets have been granted to the Borrower pursuant to the applicable Qualified Intercompany Debt Documents); 
(xiv)     there shall be no Indebtedness incurred or assumed in connection with such Acquisition other than Revolving Loans funded to the Borrower under this Agreement, Qualified Intercompany Debt incurred by the applicable Target and Indebtedness permitted under Sections 7.03(e), 7.03(i) and 7.03(k); 
(xv)     to the extent that any investments of Qualified Intercompany Debt are made in the Target in connection with such Acquisition, (A) such Qualified Intercompany Debt shall be evidenced by Qualified Intercompany Debt Documents pursuant to which, among other things, a perfected, first-priority Lien has been granted to the Borrower in substantially all of the assets of such Target (other than a Target organized in Canada) in accordance with the definition of the term Qualified Intercompany Debt Documents, and (B) the Administrative Agent shall have received projections and other financial data reasonably acceptable to the Administrative Agent which demonstrates that, after giving effect to such investments of Qualified Intercompany Debt, (1) such Target is Solvent and (2) the Portfolio Company Leverage Ratio for such Target would not be greater than 5.00 to 1.00; 

(g)    The second sentence of Section 1.03(a) is amended and restated in its entirety to read as follows:

Notwithstanding the foregoing, (i) without modifying the foregoing requirement that financial ratios and calculations be prepared in accordance with GAAP, financial statements of Portfolio Companies organized in Canada may be prepared in accordance with generally accepted accounting principles in Canada set forth in the opinions, statements and pronouncements of the relevant Canadian accounting authorities, consistently applied, and (ii) for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of the Borrower and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial liabilities shall be disregarded.

(h)    Section 2.02(a) is amended and restated in its entirety to read as follows:

(a)    Each Borrowing, each conversion of Loans from one Type to the other, and each continuation of Eurodollar Rate Loans shall be made upon the Borrower’s irrevocable notice to the Administrative Agent, which may be given by (A) telephone or (B) a Loan Notice; provided that any telephonic notice must be confirmed immediately by delivery to the Administrative Agent of a Loan Notice.  Each such Loan Notice must be received by the Administrative Agent not later than 11:00 a.m. (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of, Eurodollar Rate Loans, and (ii) on the requested date of any Borrowing of Base Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate Loans.  Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $100,000 in excess thereof.  Except as provided in Sections 2.03(c) and 2.04(c), each Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $100,000 in excess thereof.  Each Loan Notice shall specify (i) whether the Borrower is requesting a Borrowing, a conversion of Loans from one Type to the other, or a continuation of Eurodollar Rate 

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Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing Loans are to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto.  If the Borrower fails to specify a Type of a Loan in a Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Loans shall be made as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Loans.  If the Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month.

(i)    Section 2.04(b) is amended and restated in its entirety to read as follows:

(b)    Borrowing Procedures.  At any time an Auto Borrow Agreement is not in effect, each Borrowing of Swing Line Loans shall be made upon the Borrower’s irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be given by (A) telephone or (B) a Swing Line Loan Notice; provided that any telephonic notice must be confirmed promptly by delivery to the Swing Line Lender and the Administrative Agent of a Swing Line Loan Notice.  Each such Swing Line Loan Notice must be received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum principal amount of $100,000 and integral multiples of $100,000 in excess thereof, and (ii) the requested borrowing date, which shall be a Business Day.  Promptly after receipt by the Swing Line Lender of any Swing Line Loan Notice, the Swing Line Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof.  Unless the Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Lender) prior to 2:00 p.m. on the date of the proposed Borrowing of Swing Line Loans (A) directing the Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the proviso to the first sentence of Section 2.04(a), or (B) that one or more of the applicable conditions specified in Article IV is not then satisfied, then, subject to the terms and conditions hereof, the Swing Line Lender will, not later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the Borrower.

(j)    Clause (A) of Section 2.05(a)(i) is amended and restated in its entirety to read as follows:

(A) such notice must be in a form acceptable to the Administrative Agent and be received by the Administrative Agent not later than 11:00 a.m. (1) three Business Days prior to any date of prepayment of Eurodollar Rate Loans and (2) on the date of prepayment of Base Rate Loans;

(k)    Clause (A) of Section 2.05(a)(ii) is amended and restated in its entirety to read as follows:

(A) such notice must be in a form acceptable to the Swing Line Lender and the Administrative Agent and be received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the date of the prepayment, and

(l)    Section 2.05(b)(v)(B) is amended and restated in its entirety to read as follows:

(B)    with respect to all amounts prepaid pursuant to Sections 2.05(b)(ii), (iii) and (iv), first ratably to the L/C Borrowings and the Swing Line Loans, second, to the outstanding Revolving Loans, third, to Cash Collateralize the remaining L/C Obligations, and fourth, to the Term Loan to the remaining principal amortization payments in inverse order of maturity; provided that (1) Cash Collateralization pursuant to the foregoing clause third shall not be required with respect to any such prepayment if each L/C Issuer that is the issuer of a then-outstanding Letter of Credit declines such 

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Cash Collateralization (in which case the portion of such prepayment that would otherwise have been applied to such Cash Collateralization shall be applied to the Term Loan pursuant to the foregoing clause fourth, subject to the remaining clauses of this proviso), (2) prepayments required under Section 2.05(b)(ii) shall only be applied to the Term Loan pursuant to the foregoing clause fourth to the extent that the Net Cash Proceeds otherwise required to be prepaid are not invested in property (other than current assets as classified by GAAP) that is useful in the business of the Borrower and its Subsidiaries within 545 days of the date of the applicable Disposition or Recovery Event (it being understood that the portion of any such prepayment required to be applied to the Term Loan pursuant to the foregoing clause fourth shall be due immediately upon the expiration of such 545 day period), and (3) prepayments required under Section 2.05(b)(iv) shall only be applied to the Term Loan pursuant to the foregoing clause fourth if, at the time such prepayments would otherwise be due and payable, an Event of Default exists).

(m)    Section 5.05(a) is amended by inserting the phrase “(or, with respect to financial statements of Portfolio Companies organized in Canada, as otherwise permitted by Section 1.03(a))” immediately after the phrase “prepared in accordance with GAAP” appearing therein.

(n)    Section 6.01(a)(i) is amended by inserting the phrase “(or, with respect to consolidating financial statements of Portfolio Companies organized in Canada, as otherwise permitted by Section 1.03(a))” immediately after the phrase “prepared in accordance with GAAP” appearing therein.

(o)    Section 6.01(a)(ii) is amended by inserting the phrase “(or, with respect to financial statements of Portfolio Companies organized in Canada, as otherwise permitted by Section 1.03(a))” immediately after the phrase “prepared in accordance with GAAP” appearing therein.

(p)    Section 6.02(a) is amended and restated in its entirety to read as follows:

(a)    [reserved];

(q)    Section 7.02(e) is amended and restated in its entirety to read as follows:

(e)    Investments of Indebtedness (i) in Subsidiary Outside Companies, so long as the instruments evidencing any such Indebtedness have been pledged to the Administrative Agent to secure the Obligations in accordance with the terms of the Loan Documents, and (ii) by any Portfolio Company organized in Canada in its operating company Subsidiaries;

(r)    Section 7.03(h) is amended by inserting the phrase “the amount guaranteed under” immediately after the phrase “$5,000,000 in the aggregate for” appearing therein.

(s)    Section 7.09 is amended by inserting the phrase “and (vi)” immediately after the phrase “clauses (i)-(iv)” appearing therein.

(t)    Section 7.11(a) is amended and restated in its entirety to read as follows:

(a)    Consolidated Leverage Ratio.  Permit the Consolidated Leverage Ratio as of the end of any fiscal quarter of the Borrower to be greater than 3.50 to 1.00; provided, that, (i) as of the end of each of the three (3) consecutive fiscal quarter-ends (if such Permitted Eligible Acquisition is consummated in the first forty-five days of a fiscal quarter) or four (4) consecutive fiscal quarter-ends (if such Permitted Eligible Acquisition is consummated after the first forty-five days of a fiscal quarter) immediately following the consummation of a Permitted Eligible Acquisition, with prior notice to the Administrative Agent, the preceding ratio shall increase to 4.25 to 1.00 (a “Leverage Increase Period”); (ii) for at least one full fiscal quarter immediately following each Leverage Increase Period, the Consolidated Leverage Ratio as of the end of each such fiscal quarter shall be not greater than 3.50 to 1.00 before the maximum permitted Consolidated Leverage Ratio may again increase to 4.25 to 

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1.00 pursuant to the foregoing clause (i); and (iii) immediately after the end of a Leverage Increase Period, the maximum Consolidated Leverage Ratio permitted under this Section 7.11(a) shall automatically revert to 3.50 to 1.00; and provided further, that, if the Consolidated Leverage Ratio is less than or equal to 3.50 to 1.00 as of the end of any fiscal quarter of the Borrower (including, for the avoidance of doubt, any fiscal quarter ending prior to the First Amendment Effective Date) occurring during a Leverage Increase Period (as certified in the Compliance Certificate delivered to the Administrative Agent for such fiscal quarter pursuant to Section 6.02(b)), such Leverage Increase Period may be terminated by the Borrower, by written notice to the Administrative Agent, as of the end of such fiscal quarter and such fiscal quarter shall constitute the fiscal quarter described in the foregoing clause (ii) with respect to such Leverage Increase Period.

(u)    The last sentence of Section 10.02(c) is amended and restated in its entirety to read as follows:

In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to the Borrower, any Lender, any L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrower’s or the Administrative Agent’s transmission of Borrower Materials or any other Information or notices through the Internet, the Platform or any other telecommunications, electronic or other information transmission systems.

(v)    Section 10.17 is amended and restated in its entirety to read as follows:

10.17    Electronic Execution of Assignments and Certain Other Documents.

The words “delivery,” “execute,” “execution,” “signed,” “signature” and words of like import in or related to any Loan Document or any other document executed in connection with this Agreement and the transactions contemplated hereby (including without limitation Assignment and Assumptions, amendments or other modifications, Loan Notices, Swing Line Loan Notices, waivers and consents) shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Administrative Agent, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act; provided that, notwithstanding anything contained herein to the contrary, the Administrative Agent is under no obligation to agree to accept electronic signatures in any form or in any format unless expressly agreed to by the Administrative Agent pursuant to procedures approved by it.
(w)    Exhibit J attached hereto is attached to the Credit Agreement as Exhibit J thereto.

2.    Conditions Precedent.  This Amendment shall be effective upon receipt by the Administrative Agent of:

(a)    counterparts of this Amendment duly executed by (i) a Responsible Officer of the Borrower and (ii) the Required Lenders, the Required Revolving Lenders, the L/C Issuers and the Administrative Agent; 

(b)     a certificate of a Responsible Officer of the Borrower, in form and substance satisfactory to the Administrative Agent, (i) attaching resolutions of the Borrower approving and adopting this Amendment, the transactions contemplated herein and authorizing the execution and delivery of this Amendment and any documents, agreements or certificates related thereto and certifying that such resolutions have not been amended, supplemented or otherwise modified and remain in full force and effect as of the date hereof, (ii) certifying that the Organization Documents of the Borrower have not been amended, supplemented or otherwise 

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modified since the Closing Date (or, if such Organization Documents have been amended, supplemented or otherwise modified since the Closing Date, attaching copies of such Organization Documents certified to be true and complete as of a recent date by the appropriate Governmental Authority of the state or other jurisdiction of its incorporation or organization, where applicable, and certifying such Organization Documents to be true and correct as of the date hereof), and (iii) setting forth the names, titles and specimen signatures of the Responsible Officers of the Borrower authorized to execute and deliver this Amendment and any documents, agreements or certificates related thereto;

(c)    such documents and certifications as the Administrative Agent may require to evidence that the Borrower is duly organized or formed, and is validly existing, in good standing and qualified to engage in business in its state of organization or formation; and

(d)    (i) an amendment fee payable to each Lender that executes this amendment on or before the date hereof, in an amount equal to, for each such Lender, 0.05% of the sum of (A) such Lender’s Revolving Commitment as of the date of this Amendment plus (B) the portion of the outstanding Term Loan held by such Lender as of the date of this Amendment, and (ii) all costs and expenses of the Administrative Agent (including reasonable and documented fees and expenses of its legal counsel) in connection with this Amendment to the extent invoiced as of the date hereof (paid directly to such counsel if requested by the Administrative Agent), without prejudice to a final settling of accounts between the Administrative Agent and the Borrower.

3.    Reaffirmation.  The Borrower acknowledges and reaffirms that (a) it is bound by all of the terms of the Loan Documents to which it is a party and (b) it is responsible for the observance and full performance of all Obligations, including without limitation, the repayment of the Loans and reimbursement of any drawings on any Letter of Credit.  Furthermore, the Borrower acknowledges and confirms that (a) the Administrative Agent, the Lenders and the L/C Issuers have performed fully all of their obligations under the Credit Agreement and the other Loan Documents and (b) by entering into this Amendment, the Administrative Agent, the Lenders and the L/C Issuers do not waive or release any term or condition of the Credit Agreement or any of the other Loan Documents or any of their rights or remedies under such Loan Documents or any applicable law or any of the obligations of the Borrower thereunder.

4.    Miscellaneous.

(a)    The Credit Agreement (as amended hereby) and the obligations of the Borrower thereunder and under the other Loan Documents are hereby ratified and confirmed and shall remain in full force and effect according to their terms.  This Amendment shall not be deemed or construed to be a satisfaction, reinstatement, novation or release of any Loan Document or a waiver by the Administrative Agent or any Lender of any rights and remedies under the Loan Documents, at law or in equity.

(b)    The Borrower hereby represents and warrants to the Administrative Agent and the Lenders as follows:

(i)    The Borrower has taken all necessary action to authorize the execution, delivery and performance of this Amendment.  This Amendment and the execution and performance hereof by the Borrower do not conflict with the Borrower’s Organization Documents or any law, agreement or obligation by which the Borrower is bound.

(ii)    This Amendment has been duly executed and delivered by the Borrower and constitutes the Borrower’s legal, valid and binding obligations, enforceable in accordance with its terms, subject to bankruptcy, insolvency and similar laws affecting the enforceability of creditors’ rights generally and to general principles of equity.

(iii)    No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection 

9

with the execution, delivery or performance by, or enforcement against, the Borrower of this Amendment.
(iv)    The representations and warranties of the Borrower contained in Article V of the Credit Agreement or in any other Loan Document, or which are contained in any document furnished at any time under or in connection therewith, are true and correct in all material respects (or, in the case of any such representations and warranties qualified by materiality or Material Adverse Effect, in all respects as drafted) as of the date hereof with the same effect as if made on and as of the date hereof, except to the extent such representations and warranties specifically refer to an earlier date, in which case such representations and warranties are true and correct in all material respects (or, in the case of any such representations and warranties qualified by materiality or Material Adverse Effect, in all respects as drafted) as of such earlier date.
(v)    No event has occurred and is continuing which constitutes a Default or an Event of Default.
(c)    The Borrower hereby certifies to the Administrative Agent and the Lenders that the obligations of the Borrower set forth in the Credit Agreement, as modified by this Amendment, qualify as a "grandfathered obligation" within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).  From and after the effective date of this Amendment, the Borrower shall indemnify the Administrative Agent, and hold it harmless from, any and all losses, claims, damages, liabilities and related interest, penalties and expenses, including, without limitation, Taxes and the fees, charges and disbursements of any counsel for any of the foregoing, arising in connection with the Administrative Agent’s treating, for purposes of determining withholding Taxes imposed under the Foreign Account Tax Compliance Act (FATCA), the obligations of the Borrower set forth in the Credit Agreement (as modified by this Amendment) as qualifying as a “grandfathered obligation” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).  The Borrower’s obligations hereunder shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all of the Obligations.
(d)    This Amendment shall constitute a Loan Document for all purposes. This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument.  Delivery of an executed counterpart of this Amendment by telecopy or other electronic means (such as by email in “pdf” or “tif” format) shall be effective as an original and shall constitute a representation that an executed original shall be delivered.  This Amendment constitutes the entire contract among the parties relating to the subject matter hereof and supersedes any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  This Amendment will inure to the benefit of and bind the respective successors and permitted assigns of the parties hereto.
(e)    THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.  THE TERMS OF SECTIONS 10.14 AND 10.15 OF THE CREDIT AGREEMENT ARE INCORPORATED HEREIN BY REFERENCE, MUTATIS MUTANDIS.

[Signature pages follow]

10

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.

BORROWER:                COMPASS GROUP DIVERSIFIED HOLDINGS LLC,
a Delaware limited liability company

By:  /s/ Ryan Faulkingham        
Name: Ryan Faulkingham
Title: Chief Financial Officer

11

ADMINISTRATIVE
AGENT:                BANK OF AMERICA, N.A.,
as Administrative Agent
    
By:    /s/ Reneé Marion            
Name: Reneé Marion
Title: Assistance Vice President

LENDERS:                BANK OF AMERICA, N.A.,
as a Lender, L/C Issuer and Swing Line Lender 
    
By:    /s/ Christopher T. Phelan        
Name: Christopher T. Phelan
Title: Senior Vice President

SUNTRUST BANK,
as a Lender
    
By:    /s/ David. A. Ernst        
Name: David A. Ernst
Title: Vice President

TD BANK, N.A.,
as a Lender
    
By:    /s/ MB Collins        
Name: M. Bernadette Collins
Title: Senior Vice President

US BANK NATIONAL ASSOCIATION,
as a Lender and an L/C Issuer

By:    /s/ Anthony Billings        
Name: Anthony Billings
Title: Assistant Vice President

MUFG UNION BANK, N.A.,
as a Lender 

By:    /s/ Carlos Cruz        
Name: Carlos Cruz
Title: Vice President

12

THE PRIVATEBANK AND TRUST COMPANY, 
as a Lender 

By:    /s/ Sam L. Dendrinos        
Name: Sam L. Dendrinos
Title: Managing Director

WEBSTER BANK, NATIONAL ASSOCIATION,
as a Lender 

By:    /s/ Richard Freeman        
Name: Richard Freeman
Title: Vice President

FIRST TENNESSEE BANK NATIONAL ASSOCIATION,
as a Lender 

By:    /s/ Keith A. Sherman        
Name: Keith A. Sherman
Title: Senior Vice President

BRANCH BANKING AND TRUST COMPANY, 
as a Lender 

By:    /s/ Eric Searls        
Name: Eric Searls
Title: Senior Vice President

HULL STREET CLO, LTD.

By:    /s/ Scott D’Orsi        
Name: Scott D’Orsi
Title: Portfolio Manager

UBS AG, STAMFORD BRANCH,
as a Lender

By:    /s/ Craig Pearson        
Name: Craig Pearson
Title: Associate Director - Banking Product Services US

By:    /s/ Craig Pearson        
Name: Darlene Arlas
Title: Director

13

MODERN BANK, N.A., 
as a Lender 

By:    /s/ Frank H. Madden, Sr.         
Name: Frank H. Madden, Sr. 
Title: Managing Director

EVEREST FUNDING LLC, 
as a Lender 

By:    /s/ Dale Rank        
Name: Dale Rank
Title: Assistant Vice President

ASFI Loan Funding LLC
By: Citibank, N.A., 

By:    /s/ Lauri Pool        
Name: Lauri Pool
Title: Associate Director

CUTWATER 2014-I LTD., 
as a Lender 

By:    /s/ John Bluemke        
Name: John Bluemke
Title: Director, Bank Loan Group

CUTWATER 2014-II LTD., 
as a Lender 

By:    /s/ John Bluemke        
Name: John Bluemke
Title: Director, Bank Loan Group

CUTWATER 2015-I LTD., 
as a Lender 

By:    /s/ John Bluemke        
Name: John Bluemke
Title: Director, Bank Loan Group

DAVIDSON RIVER TRADING LLC,  
as a Lender 
By:  SunTrust Bank, its Manager

By:    /s/ John Bluemke        
Name: Josh Lowe
Title: Vice President

14

GOLUB CAPITAL PARTNERS CLO 11, LTD. 
as a Lender 
By:  GC Advisors LLC, as agent

By:    /s/ Christina D. Jamieson        
Name: Christina D. Jamieson
Title: Portfolio Manager

GOLUB CAPITAL PARTNERS CLO 14, LTD. 
as a Lender 
By:  GC Advisors LLC, as agent

By:    /s/ Christina D. Jamieson        
Name: Christina D. Jamieson
Title: Portfolio Manager

GOLUB CAPITAL PARTNERS CLO 15, LTD. 
as a Lender 
By:  GC Advisors LLC, as agent

By:    /s/ Christina D. Jamieson        
Name: Christina D. Jamieson
Title: Portfolio Manager

GOLUB CAPITAL PARTNERS CLO 22(B), LTD. 
as a Lender 
By:  GC Advisors LLC, as agent

By:    /s/ Christina D. Jamieson        
Name: Christina D. Jamieson
Title: Portfolio Manager

GOLUB CAPITAL PARTNERS CLO 19(B), LTD. 
as a Lender 
By:  GC Advisors LLC, as agent

By:    /s/ Christina D. Jamieson        
Name: Christina D. Jamieson
Title: Portfolio Manager

GOLUB CAPITAL PARTNERS CLO 23(B), LTD. 
as a Lender 
By:  GC Advisors LLC, as agent

By:    /s/ Christina D. Jamieson        
Name: Christina D. Jamieson
Title: Portfolio Manager

15

Bridgeport CLO II, LTD. 
By:  Deerfield Capital Management LLC, its Collateral Manager

By:    /s/ Robert Ranocchia        
Name: Robert Ranocchia
Title: Authorized Signatory

CIFC Funding 2011-I, Ltd.  
By:  CIFC Asset Management LLC, its Collateral Manager

By:    /s/ Robert Ranocchia        
Name: Robert Ranocchia
Title: Authorized Signatory

CIFC Funding 2012-I, Ltd.  
By:  CIFC Asset Management LLC, its Collateral Manager

By:    /s/ Robert Ranocchia        
Name: Robert Ranocchia
Title: Authorized Signatory

CIFC Funding 2012-II, Ltd.  
By:  CIFC Asset Management LLC, its Collateral Manager

By:    /s/ Robert Ranocchia        
Name: Robert Ranocchia
Title: Authorized Signatory

CIFC Funding 2012-III, Ltd.  
By:  CIFC Asset Management LLC, its Collateral Manager

By:    /s/ Robert Ranocchia        
Name: Robert Ranocchia
Title: Authorized Signatory

CIFC Funding 2013-I, Ltd.  
By:  CIFC Asset Management LLC, its Collateral Manager

By:    /s/ Robert Ranocchia        
Name: Robert Ranocchia
Title: Authorized Signatory

CIFC Funding 2013-II, Ltd.  
By:  CIFC Asset Management LLC, its Collateral Manager

By:    /s/ Robert Ranocchia        
Name: Robert Ranocchia
Title: Authorized Signatory

16

CIFC Funding 2013-III, Ltd.  
By:  CIFC Asset Management LLC, its Collateral Manager

By:    /s/ Robert Ranocchia        
Name: Robert Ranocchia
Title: Authorized Signatory

CIFC Funding 2013-IV, Ltd.  
By:  CIFC Asset Management LLC, its Collateral Manager

By:    /s/ Robert Ranocchia        
Name: Robert Ranocchia
Title: Authorized Signatory

CIFC Funding 2014, Ltd.  
By:  CIFC Asset Management LLC, its Collateral Manager

By:    /s/ Robert Ranocchia        
Name: Robert Ranocchia
Title: Authorized Signatory

CIFC Funding 2014-II, Ltd.  
By:  CIFC Asset Management LLC, its Collateral Manager

By:    /s/ Robert Ranocchia        
Name: Robert Ranocchia
Title: Authorized Signatory

CIFC Funding 2014-III, Ltd.  
By:  CIFC Asset Management LLC, its Collateral Manager

By:    /s/ Robert Ranocchia        
Name: Robert Ranocchia
Title: Authorized Signatory

CIFC Funding 2014-IV, Ltd.  
By:  CIFC Asset Management LLC, its Collateral Manager

By:    /s/ Robert Ranocchia        
Name: Robert Ranocchia
Title: Authorized Signatory

CIFC Funding 2014-V, Ltd.  
By:  CIFC Asset Management LLC, its Collateral Manager

By:    /s/ Robert Ranocchia        
Name: Robert Ranocchia
Title: Authorized Signatory

17

CIFC Funding 2015-I, Ltd.  
By:  CIFC Asset Management LLC, its Collateral Manager

By:    /s/ Robert Ranocchia        
Name: Robert Ranocchia
Title: Authorized Signatory

CIFC Senior Secured Corporate Loan Master Fund Ltd. 
By:  CIFC Asset Management LLC, its Adviser

By:    /s/ Robert Ranocchia        
Name: Robert Ranocchia
Title: Authorized Signatory

IVY HILL MIDDLE MARKET CREDIT FUND VI, LTD.
By:  Ivy Hill Asset Management, L.P., as Collateral Manager
as a Lender

By:    /s/ Kevin R. Braddish        
Name: Kevin R. Braddish
Title: Duly Authorized Signatory

AG CREDIT INVESTMENT.  LLC,
as a Lender

By:    /s/ Michael P. McGonigle        
Name: Michael P. McGonigle
Title: Authorized Signatory

AUDAX CREDIT OPPORTUNITIES OFFSHORE LTD, 
as a Lender

By:    /s/ Michael P. McGonigle        
Name: Michael P. McGonigle
Title: Authorized Signatory

AUDAX CREDIT STRATEGIES (SCS) SPV, LLC, 
as a Lender

By:    /s/ Michael P. McGonigle        
Name: Michael P. McGonigle
Title: Authorized Signatory

18

AUDAX SENIOR DEBT (WCTPT) SPV, LLC, 
as a Lender

By:    /s/ Michael P. McGonigle        
Name: Michael P. McGonigle
Title: Authorized Signatory

AUDAX SENIOR LOAN FUND SPV LLC, 
as a Lender

By:    /s/ Michael P. McGonigle        
Name: Michael P. McGonigle
Title: Authorized Signatory

SOUND HARBOR LOAN FUNDS 204-1, LTD., 
as a Lender

By:    /s/ Jami Walker        
Name: Jamie Walker
Title: Principal

SUSSEX INSURANCE COMPANY, 
as a Lender

By:    /s/ Jamie Walker        
Name: Jamie Walker
Title: Principal

ACAS CLO 2012-1, Ltd.
By: American Capital CLO Management, LLC (f/k/a American Capital Leveraged Finance Management, LLC), its Manager

By:    /s/ William Weiss        
Name: William Weiss
Title: Authorized Signatory

ACAS CLO 2013-1, Ltd.
By: American Capital CLO Management, LLC (f/k/a American Capital Leveraged Finance Management, LLC), its Manager

By:    /s/ William Weiss        
Name: William Weiss
Title: Authorized Signatory

19

ACAS CLO 2013-2 Ltd.
By: American Capital CLO Management, LLC, its Manager

By:    /s/ William Weiss        
Name: William Weiss
Title: Authorized Signatory

ACAS CLO 2014-1, Ltd.
By: American Capital CLO Management, LLC, its Manager

By:    /s/ William Weiss        
Name: William Weiss
Title: Authorized Signatory

ACAS CLO 2015-1, Ltd.

By:    /s/ William Weiss        
Name: William Weiss
Title: Authorized Signatory

AMMC CLO 15, LIMITED
By: American Money Management Corp., as Collateral Manager 

By:    /s/ David P. Meyer        
Name: David P. Meyer
Title: Senior Vice President

AMMC CLO 16, LIMITED
By: American Money Management Corp., as Collateral Manager 

By:    /s/ David P. Meyer        
Name: David P. Meyer
Title: Senior Vice President

AMMC CLO XI, LIMITED
By: American Money Management Corp., as Collateral Manager 

By:    /s/ David P. Meyer        
Name: David P. Meyer
Title: Senior Vice President

AMMC CLO XII, LIMITED
By: American Money Management Corp., as Collateral Manager 

By:    /s/ David P. Meyer        
Name: David P. Meyer
Title: Senior Vice President

20

AMMC CLO XIII, LIMITED
By: American Money Management Corp., as Collateral Manager 

By:    /s/ David P. Meyer        
Name: David P. Meyer
Title: Senior Vice President

AMMC CLO XIV, LIMITED

By:    /s/ David P. Meyer        
Name: David P. Meyer
Title: Senior Vice President

THE EATON CORPORATION MASTER RETIREMENT TRUST, 
as a Lender

By:    /s/ Wing Chan        
Name: Wing Chan
Title: Authorized Signatory

PK-SSL INVESTMENT FUND LIMITED PARTNERSHIP, as a Lender

By:    /s/ Wing Chan        
Name: Wing Chan
Title: Authorized Signatory

MADISON PARK FUNDING XIV LTD.,  
as a Lender

By:    /s/ Wing Chan        
Name: Wing Chan
Title: Authorized Signatory

IHC PENSION PLAN DIRECTED TRUST,  
as a Lender

By:    /s/ Wing Chan        
Name: Wing Chan
Title: Authorized Signatory

HYFI LOAN FUND, 
as a Lender

By:    /s/ Wing Chan        
Name: Wing Chan
Title: Authorized Signatory

21

MADISON PARK FUNDING XVII LTD.,  
as a Lender

By:    /s/ Wing Chan        
Name: Wing Chan
Title: Authorized Signatory

ATRIUM XI, 
as a Lender

By:    /s/ Wing Chan        
Name: Wing Chan
Title: Authorized Signatory

IHC HEALTH SERVICES, INC.,  
as a Lender

By:    /s/ Wing Chan        
Name: Wing Chan
Title: Authorized Signatory

MADISON PARK FUNDING XII LTD.,  
as a Lender

By:    /s/ Wing Chan        
Name: Wing Chan
Title: Authorized Signatory

MADISON PARK FUNDING XV LTD.,  
as a Lender

By:    /s/ Wing Chan        
Name: Wing Chan
Title: Authorized Signatory

QUALCOMM GLOBAL TRADING PET LTD.,  
as a Lender

By:    /s/ Wing Chan        
Name: Wing Chan
Title: Authorized Signatory

TELOS CLO 2014-6, LTD.,  
as a Lender
By: Telos Asset Management, LLC as Collateral Services

By:    /s/ Jonathan Tepper        
Name: Jonathan Tepper
Title: Managing Director

22

TELOS CLO 2013-3, LTD.,  
as a Lender
By: Telos Asset Management, LLC as Collateral Services

By:    /s/ Jonathan Tepper        
Name: Jonathan Tepper
Title: Managing Director

TELOS CLO 2013-4, LTD.,  
as a Lender
By: Telos Asset Management, LLC as Collateral Services

By:    /s/ Jonathan Tepper        
Name: Jonathan Tepper
Title: Managing Director

TELOS CLO 2014-5, LTD.,  
as a Lender
By: Telos Asset Management, LLC as Collateral Services

By:    /s/ Jonathan Tepper        
Name: Jonathan Tepper
Title: Managing Director

23Exhibit 10.1

 

SUBORDINATED NOTE PURCHASE AGREEMENT

 

This SUBORDINATED NOTE
PURCHASE AGREEMENT (this “Agreement”) is dated as of June 30, 2015, and is made by and among ConnectOne Bancorp,
Inc., a New Jersey corporation (“Company”), and the several purchasers of the Subordinated Notes named on Schedule
I hereto (each a “Purchaser” and collectively, the “Purchasers”).

 

RECITALS

 

WHEREAS, Company
has requested that the Purchasers purchase from Company up to $50,000,000 in aggregate principal amount of Subordinated Notes
(as defined herein), which aggregate amount is intended to qualify as Tier 2 Capital (as defined herein).

 

WHEREAS, Company
has engaged Raymond James & Associates, Inc. (the “Raymond James”) and Keefe, Bruyette and Woods, Inc.
(“KBW”), as co-placement agents (each, a “Placement Agent” and, collectively, the “Placement
Agents” ) for the offering of the Subordinated Notes.

 

WHEREAS, each
of the Purchasers is an institutional accredited investor as such term is contemplated by Rule 501 of Regulation D (“Regulation
D”) promulgated under the Securities Act of 1933, as amended (the “Securities Act”).

 

WHEREAS, the
sale of the Subordinated Notes by Company is being made pursuant to Rule 506(b) of Regulation D and pursuant to the Indenture
(as defined below).

 

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

 

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

 

AGREEMENT

 

		1.	DEFINITIONS.

 

1.1        Defined
Terms. The following capitalized terms generally used in this Agreement and in the Subordinated Notes have the meanings
defined or referenced below. Certain other capitalized terms used only in specific sections of this Agreement may be defined in
such sections.

 

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

 

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

 

“Bank”
means ConnectOne Bank, a New Jersey-chartered commercial bank and wholly owned subsidiary of Company.

    	 

    	

    

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

 

“Closing”
has the meaning set forth in Section 2.4.

 

“Closing Date”
means June 30, 2015.

 

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

 

“Company’s
Liabilities” means Company’s obligations under the Transaction Documents.

 

“Company’s
SEC Reports” means (i) Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, as filed
with the SEC, (ii) Company’s Definitive Proxy Statement on Schedule 14A related to its 2015 Annual Meeting of Shareholders,
as filed with the SEC, (iii) any Current Report on Form 8-K, as filed or furnished by Company with the SEC since January 1, 2015,
or (iv) Company’s Quarterly Reports on Form 10-Q for the quarterly period ended on March 31, 2015, as filed with the SEC
pursuant to the requirements of the Exchange Act.

 

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

 

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

 

“Exchange
Act” has the meaning set forth in Section 4.8.

 

“FDIC”
means the Federal Deposit Insurance Corporation.

 

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

 

“Governmental
Agency(ies)” means, individually or collectively, any federal, state, county or local governmental department, commission,
board, regulatory authority or agency (including, without limitation, each applicable Regulatory Agency) with jurisdiction over
Company.

 

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

 

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

 

“Hazardous
Materials Laws” mean any laws, regulations, permits, licenses or requirements pertaining to the protection, preservation,
conservation or regulation of the environment which relates to real property, including: the Clean Air Act, as amended, 42 U.S.C.
Section 7401 et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq.; the Resource Conservation
and Recovery Act of 1976, as amended, 42 U.S.C. Section 6901 et seq.; the Comprehensive Environment Response, Compensation and
Liability Act of 1980, as amended (including the Superfund Amendments

    	2

    	

    

and Reauthorization
Act of 1986), 42 U.S.C. Section 9601 et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C. Section 2601 et seq.; the
Occupational Safety and Health Act, as amended, 29 U.S.C. Section 651, the Emergency Planning and Community Right-to-Know Act
of 1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of 1977, as amended, 30 U.S.C. Section 801 et seq.; the
Safe Drinking Water Act, 42 U.S.C. Section 300f et seq.; and all comparable state and local laws, laws of other jurisdictions
or orders and regulations.

 

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

 

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

 

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

 

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

 

“Maturity
Date” means July 1, 2025.

 

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

 

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

 

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

    	3

    	

    

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

 

“Registration
Rights Agreement” means the Registration Rights Agreement, dated as of the date hereof, by and among Company and the
Purchasers in the form attached as Exhibit B hereto.

 

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

 

“Regulatory
Agencies” means any federal or state agency charged with the supervision or regulation of depositary institutions or
holding companies of depositary institutions, or engaged in the insurance of depositary institution deposits, or any court, administrative
agency or commission or other authority, body or agency having supervisory or regulatory authority with respect to Company, Bank
or any of their Subsidiaries.

 

“SEC”
means the Securities and Exchange Commission.

 

“Secondary
Market Transaction” has the meaning set forth in Section 5.6.

 

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

 

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

 

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

 

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

 

“Tier 2 Capital”
has the meaning given to the term “Tier 2 capital” in 12 C.F.R. Part 208 and 12 C.F.R. Part 250, as amended, modified
and supplemented and in effect from time to time or any replacement thereof.

 

“Transaction
Documents” has the meaning set forth in Section 3.2.1.

 

“Trustee”
means the trustee reflected under the Indenture.

 

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

 

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

    	4

    	

    

		2.	SUBORDINATED
                                                                                                                               DEBT.

 

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

 

2.2        The Closing.
The execution and delivery of the Transaction Documents (the “Closing”) shall occur at the offices of Company
at 10:00 a.m. (local time) on the Closing Date, or at such other place or time or on such other date as the parties hereto may
agree.

 

2.3        Right
of Offset. Each Purchaser hereby expressly waives any right of offset it may have against Company.

 

2.4        Use of
Proceeds. Company shall use the net proceeds from the sale of Subordinated Notes (i) for, subject to approval by applicable
Regulatory Agencies, repayment of up to $11,250,000 aggregate liquidation value of its Series B fixed rate cumulative perpetual
preferred stock, (ii) to fund future growth, (iii) to bolster regulatory capital at both the Bank and Company, and (ii) for general
corporate purposes.

 

		3.	DISBURSEMENT.

 

3.1        Disbursement.
On the Closing Date, assuming all of the terms and conditions set forth in Section 3.2 have been satisfied by Company and Company
has executed and delivered to Purchasers each of the Agreement and the Subordinated Notes and any other related documents in form
and substance reasonably satisfactory to Purchasers, each Purchaser shall disburse in immediately available funds the Subordinated
Note Amount set forth next to its name in Schedule I to Company in exchange for a Subordinated Note with a principal amount equal
to such Subordinated Note Amount (the “Disbursement”). The Company will deliver to the respective Purchaser
one or more certificates representing the Subordinated Notes in definitive form (or provide evidence of the same with the original
to be delivered by the Trustee by overnight delivery on the next calendar day in accordance with the delivery instructions of
Purchaser), registered in such names and denominations as such Purchasers may request.

 

3.2        Conditions
Precedent to Disbursement.

 

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

 

3.2.1.1 Transaction
Documents. This Agreement, the Indenture, the Subordinated Notes and the Registration Rights Agreement
(collectively, the “Transaction Documents”), each duly authorized and executed by Company.

    	5

    	

    

3.2.1.2 Authority
Documents.

 

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

 

		(b)	A
                                                                                                  certificate of good standing
                                                                                                  of Company issued by the Division
                                                                                                  of Taxation of the State of
                                                                                                  New Jersey;

 

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

 

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

 

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

 

		(f)	The
                                                                                                  opinion of Windels, Marx, Lane
                                                                                                  & Mittendorf, LLP, counsel
                                                                                                  to the Company, dated as of
                                                                                                  the Closing Date, substantially
                                                                                                  in the form set forth at Exhibit
                                                                                                  C attached hereto addressed
                                                                                                  to the Purchasers and Placement
                                                                                                  Agents.

 

3.2.1.3 Officer’s
Certificate. A certificate signed on behalf of Company by a senior executive officer certifying that the
representations and warranties of Company set forth in this Agreement are true and correct in all respects on and as of the
date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date, except where the
failure to be true and correct (without regard to any materiality or Material Adverse Effect qualifications contained
therein), individually or in the aggregate, would not be reasonably likely to have a Material Adverse Effect (and except that
(i) representations and warranties made as of a specified date shall only be required to be true and correct as of such date
and (ii) the representations and warranties of Company set forth in Sections 4.2.1, 4.2.3 and 4.5 shall be true and correct
in all respects).

 

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

 

3.2.1.5 Aggregate
Investments. Prior to, or contemporaneously with the Closing, each of the Purchasers set forth on Schedule I shall
have actually subscribed for the amounts set forth opposite such Purchaser’s name on Schedule I.

 

3.2.2     Conditions
to Company’s Obligation.

 

3.2.2.1 Since
the date of this Agreement, there shall not have been any action taken, or any law, rule or regulation enacted, entered,
enforced or deemed applicable to Company or its Subsidiaries or the transactions contemplated by this Agreement by any
Governmental Agency which imposes any restriction or condition that Company determines, in its reasonable good faith
judgment, is materially and unreasonably burdensome on Company’s business or would materially reduce the economic
benefits of the transactions contemplated by this Agreement to Company to such a degree that

    	6

    	

    

Company would not have
entered into this Agreement had such condition or restriction been known to it on the date hereof.

 

3.2.2.2 With
respect to a given Purchaser, the obligation of Company to consummate the sale of the Subordinated Notes and to effect the
Closing is subject to delivery by or at the direction of such Purchaser to Company each of the following (or written waiver
by Company prior to the Closing of such delivery):

 

		(a)	Transaction
                                                                                                  Documents. This Agreement and
                                                                                                  the Registration Rights Agreement,
                                                                                                  each duly authorized and executed
                                                                                                  by such Purchaser.

 

		(b)	Officer’s
                                                                                                  Certificate. A certificate signed
                                                                                                  on behalf of such Purchaser
                                                                                                  by a duly authorized person
                                                                                                  certifying that the representations
                                                                                                  and warranties of such Purchaser
                                                                                                  set forth in this Agreement
                                                                                                  are true and correct in all
                                                                                                  respects on and as of the date
                                                                                                  of this Agreement and on and
                                                                                                  as of the Closing Date as though
                                                                                                  made on and as of the Closing
                                                                                                  Date.

 

		4.	REPRESENTATIONS
                                                                                                                               AND
                                                                                                                               WARRANTIES
                                                                                                                               OF
                                                                                                                               COMPANY.

 

Company hereby represents
and warrants to each Purchaser as follows:

 

4.1        Organization
and Authority.

 

4.1.1     Organization
Matters of Company and Its Subsidiaries.

 

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

 

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

    	7

    	

    

4.1.1.3 Bank
is a New Jersey-chartered commercial bank. The deposit accounts of Bank are insured by the FDIC up to applicable limits.
Neither Company nor Bank has received any notice or other information indicating that Bank is not an “insured
depository institution” as defined in 12 U.S.C. Section 1813, nor has any event occurred which could reasonably be
expected to adversely affect the status of Bank as an FDIC-insured institution.

 

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

 

4.1.3     Subsidiaries.
Each of Company’s Subsidiaries that is a “significant subsidiary” as defined in Rule 1-02 of Regulation S-X
is reflected in its Annual Report on Form 10 K for the fiscal year ended December 31, 2014.

 

4.2        No Impediment
to Transactions.

 

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

 

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

 

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

 

4.2.4     No Defaults
or Restrictions. Neither the execution and delivery of the Transaction Documents nor compliance with their respective
terms and conditions will (whether with or without the giving of notice or lapse of time or both) (i) violate, conflict with or
result in a breach of, or constitute a default under: (1) the Certificate of Incorporation or Bylaws of Company; (2) any of the
terms, obligations, covenants, conditions or provisions of any corporate restriction or of any contract, agreement, indenture,
mortgage, deed of trust, pledge, bank loan or credit agreement, or any other agreement or instrument to which Company or Bank,
as applicable, is now a party or by which it or any of its properties may be bound or affected; (3) any judgment, order, writ,
injunction, decree or demand of

    	8

    	

    

any court, arbitrator,
grand jury, or Governmental Agency; or (4) any statute, rule or regulation applicable to Company, except, in the case of items
(2), (3) or (4), for such violations and conflicts that would not reasonably be expected to have, singularly or in the aggregate,
a Material Adverse Effect on Company, or (ii) result in the creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any property or asset of Company. Neither Company nor Bank is in default in the performance, observance or fulfillment
of any of the terms, obligations, covenants, conditions or provisions contained in any indenture or other agreement creating,
evidencing or securing Indebtedness of any kind or pursuant to which any such Indebtedness is issued, or any other agreement or
instrument to which Company or Bank, as applicable, is a party or by which Company or Bank, as applicable, or any of its properties
may be bound or affected, except, in each case, only such defaults that would not reasonably be expected to have, singularly or
in the aggregate, a Material Adverse Effect on Company.

 

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

 

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

 

4.4        Financial
Condition.

 

4.4.1     Company
Financial Statements. The financial statements of Company included in Company’s SEC Reports (including the related
notes, where applicable) (i) have been prepared from, and are in accordance with, the books and records of Company; (ii) fairly
present in all material respects the results of operations, cash flows, changes in stockholders’ equity and financial position
of Company and its consolidated Subsidiaries, for the respective fiscal periods or as of the respective dates therein set forth
(subject in the case of unaudited statements to recurring year-end audit adjustments normal in nature and amount), as applicable;
(iii) complied as to form, as of their respective dates of filing in all material respects with applicable accounting and banking
requirements as applicable, with respect thereto; and (iv) have been prepared in accordance with GAAP consistently applied during
the periods involved, except, in each case, as indicated in such statements or in the notes thereto and Regulation S-X promulgated
under the Securities Act. The books and records of Company have been, and are being, maintained in all material respects in accordance
with GAAP and any other applicable legal and accounting requirements. Company does not have any material liability of any nature
whatsoever (whether absolute, accrued, contingent or otherwise and whether due or to become due), except for those liabilities
that are reflected or reserved against on the consolidated balance sheet of

    	9

    	

    

Company contained in
Company SEC Reports for Company’s most recently completed quarterly or annual fiscal period, as applicable, and for liabilities
incurred in the ordinary course of business consistent with past practice or in connection with this Agreement and the transactions
contemplated hereby.

 

4.4.2     Absence
of Default. Since the date of the latest audited financial statements included in Company’s SEC Reports, no event
has occurred which either of itself or with the lapse of time or the giving of notice or both, would give any creditor of Company
the right to accelerate the maturity of any material Indebtedness of Company. Company is not in default under any other Lease,
agreement or instrument, or any law, rule, regulation, order, writ, injunction, decree, determination or award, non-compliance
with which could reasonably be expected to result in a Material Adverse Effect on Company.

 

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

 

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

 

4.5        No Material
Adverse Change. Since the date of the latest audited financial statements included in Company’s SEC Reports, there
has been no development or event which has had or could reasonably be expected to have a Material Adverse Effect on Company or
any of its Subsidiaries.

 

4.6        Legal
Matters.

 

4.6.1     Compliance
with Law. Company and each of its Subsidiaries (i) has complied with and (ii) is not under investigation with respect
to, and, to the Company’s knowledge, have not been threatened to be charged with or given any notice of any material violation
of any applicable statutes, rules, regulations, orders and restrictions of any domestic or foreign government, or any instrumentality
or agency thereof, having jurisdiction over the conduct of its business or the ownership of its properties,

    	10

    	

    

except where any such
failure to comply or violation would not reasonably be expected to have a Material Adverse Effect on Company or any of its Subsidiaries.

 

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

 

4.6.3     Pending
Litigation. There are no actions, suits, proceedings or written agreements pending, or, to Company’s knowledge,
threatened or proposed, against Company, Bank, or any of its other Subsidiaries at law or in equity or before or by any federal,
state, municipal, or other governmental department, commission, board, or other administrative agency, domestic or foreign, that,
either separately or in the aggregate, would reasonably be expected to have a Material Adverse Effect on Company or any of its
Subsidiaries or affect issuance or payment of the Subordinated Notes; and neither Company nor any of its Subsidiaries is a party
to or named as subject to the provisions of any order, writ, injunction, or decree of, or any written agreement with, any court,
commission, board or agency, domestic or foreign, that either separately or in the aggregate, will have a Material Adverse Effect
on Company or any of its Subsidiaries.

 

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

 

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

 

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

 

4.7        No Misstatement.
No information, exhibit, report, schedule or document, when viewed together as a whole, furnished by Company to Purchasers in
connection with the negotiation, execution or performance of this Agreement contains any untrue statement of a material fact,
or omits to state a material fact necessary to make the statements contained therein not misleading in light of the circumstances
under which they were made, not misleading.

 

4.8        Reporting
Compliance. Company is subject to, and is in compliance in all material respects with, the reporting requirements of Section
13 and Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and the rules and the regulations of
the SEC thereunder (collectively, the “Exchange Act”). Company’s SEC Reports at the time they were or
hereafter are filed with the SEC, complied in all material respects with the requirements of the Exchange Act and did not and
do not include any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.

    	11

    	

    

4.9        Internal
Control Over Financial Reporting. Company and its Subsidiaries maintain systems of “internal control over financial
reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that comply with the requirements of the Exchange Act and
have been designed by, or under the supervision of, their respective principal executive and principal financial officers, or
persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with GAAP, including, but not limited to, a system of
accounting controls sufficient to provide reasonable assurances 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 accountability for assets; (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. Since the end of Company’s
most recent audited fiscal year, (y) Company has no knowledge of (i) any material weakness in Company’s internal control
over financial reporting (whether or not remediated) or (ii) any fraud, whether or not material, that involves management or other
employees who have a significant role in Company’s internal controls and (z) there has been no change in Company’s
internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, Company’s
internal control over financial reporting.

 

4.10        Disclosure
Controls and Procedures. Company and its Subsidiaries maintain an effective system of disclosure controls and procedures
(as defined in Rule 13a-15 and Rule 15d-15 of the Exchange Act), that (i) are designed to ensure that information required to
be disclosed by Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the SEC’s rules and forms and that material information relating to Company
and its Subsidiaries is made known to Company’s principal executive officer and principal financial officer by others within
Company and its Subsidiaries to allow timely decisions regarding disclosure, and (ii) are effective in all material respects to
perform the functions for which they were established. As of the date hereof, Company has no knowledge that would reasonably cause
it to believe that the evaluation to be conducted of the effectiveness of Company’s disclosure controls and procedures for
the most recently ended fiscal quarter period will result in a finding that such disclosure controls and procedures are ineffective
for such quarter ended.

 

4.11        No Registration.
Other than the Purchasers with respect to the Subordinated Notes, no person has the right to require Company or any of its Subsidiaries
to register any securities for sale under the Securities Act by reason of acts required to be taken by Company pursuant to the
terms of the Registration Rights Agreement or the issuance and sale of the Subordinated Notes to be sold by Company hereunder.

 

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

 

		5.	GENERAL
                                                                                                                               COVENANTS,
                                                                                                                               CONDITIONS
                                                                                                                               AND
                                                                                                                               AGREEMENTS.

 

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

 

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

    	12

    	

    

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

 

5.3        Compliance
with Laws.

 

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

 

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

 

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

 

5.3.4     Corporate
Existence. Company shall do or cause to be done all things reasonably necessary to maintain, preserve and renew its corporate
existence and that of Bank and the other Subsidiaries and its and their rights and franchises, and comply in all material respects
with all related laws applicable to Company, Bank or the other Subsidiaries; provided, however, that Company may consummate a
merger or consolidation in accordance with Article VII of the Indenture.

 

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

 

5.5        Secondary
Market Transactions. Each Purchaser shall have the right at any time and from time to time to securitize its Subordinated
Notes or any portion thereof in a single asset securitization or a pooled loan securitization of rated single or multi-class securities
secured by or evidencing ownership interests in the Subordinated Notes (each such securitization is referred to herein as a “Secondary
Market Transaction”). In connection with any such Secondary Market Transaction, Company shall, at Company’s expense,
cooperate with Purchasers and otherwise reasonably assist Purchasers in satisfying the market standards to which Purchasers customarily
adhere or which may be

    	13

    	

    

reasonably required
in the marketplace or by applicable rating agencies in connection with any such Secondary Market Transaction. Subject to any written
confidentiality obligation, all information regarding Company may be furnished, without liability except in the case of gross
negligence or willful misconduct, to any Purchaser and to any Person reasonably deemed necessary by Purchaser in connection with
participation in such Secondary Market Transaction. All documents, financial statements, appraisals and other data relevant to
Company or the Subordinated Notes may be retained by any such Person.

 

5.6        Bloomberg.
Within 30 days after Closing, Company will utilize its commercially reasonable efforts to have the Subordinated Notes identified
on Bloomberg.

 

		6.	REPRESENTATIONS,
                                                                                                                               WARRANTIES
                                                                                                                               AND
                                                                                                                               COVENANTS
                                                                                                                               OF
                                                                                                                               PURCHASERS.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

    	14

    	

    

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

 

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

 

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

 

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

 

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

 

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

    	15

    	

    

6.13      Tier
2 Capital. If all or any portion of the Subordinated Notes ceases to be deemed to be Tier 2 Capital, other than due to
the limitation imposed on the capital treatment of subordinated debt during the five (5) years immediately preceding the Maturity
Date of the Subordinated Notes, Company will immediately notify the Purchasers, and thereafter Company and the Purchasers will
work together in good faith to execute and deliver all agreements as reasonably necessary in order to restructure the applicable
portions of the obligations evidenced by the Subordinated Notes to qualify as Tier 2 Capital.

 

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

 

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

 

7.           TERMINATION.
Purchasers may terminate this Agreement (i) at any time prior to the Closing Date by written notice signed by all Purchasers to
Company if Purchasers shall decline to purchase the Subordinated Notes for any reason permitted by this Agreement or (ii) on the
Closing Date if any condition described in Section 3.2 is not fulfilled or waived in writing by the Purchasers on or prior
to the Closing Date. Any termination pursuant to this Section shall be without liability on the part of (a) Company to Purchasers
or (b) Purchasers to Company.

 

		8.	MISCELLANEOUS.

 

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

 

8.2        Time of
the Essence. Time is of the essence of this Agreement.

 

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

 

8.4        Severability.
Any provision of this Agreement which is unenforceable or invalid or contrary to law, or the inclusion of which would adversely
affect the validity, legality or enforcement of this Agreement, shall be of no effect and, in such case, all the remaining terms
and provisions of this Agreement shall subsist and be fully effective according to the tenor of this Agreement the same as though
any such invalid portion had never been included herein. Notwithstanding any of the foregoing to the contrary, if any provisions
of this Agreement or the application thereof are held invalid or unenforceable only as to particular persons or situations, the
remainder of this Agreement, and the application of such provision to persons or situations other than those to which it shall
have been held

    	16

    	

    

invalid or unenforceable,
shall not be affected thereby, but shall continue valid and enforceable to the fullest extent permitted by law.

 

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

 

	if
    to Company:	ConnectOne Bancorp, Inc.

301 Sylvan Ave.

Englewood Cliffs, New Jersey 07632

Attn: Frank Sorrentino III, Chief Executive Officer

Facsimile: (201) 510-6781

Email: fsorrentino@cnob.com

         

	with
    a copy to:	Windels, Marx, Lane & Mittendorf LLP

120 Albany Street Plaza, 6th Floor

New Brunswick, New Jersey 08901

Attn: Robert Schwartz

Facsimile: (732) 846-8877

Email: rschwartz.@windelsmarz.com

         

	if
    to Purchasers:	To
    the addresses indicated on Schedule I.

 

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

 

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

 

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

 

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

 

8.9        Entire
Agreement. This Agreement and the Subordinated Notes along with the Exhibits thereto constitute the entire agreement between
the parties hereto with respect to the subject matter hereof and may not be modified or amended in any manner other than by supplemental
written agreement executed by the parties hereto. No party, in entering into this Agreement, has relied upon any

    	17

    	

    

representation, warranty,
covenant, condition or other term that is not set forth in this Agreement or in the Subordinated Notes.

 

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

 

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

 

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

 

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

 

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

 

8.15      Waiver
Of Right To Jury Trial. TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE ANY RIGHT THAT THEY MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH ANY OF THE TRANSACTION
DOCUMENTS, OR ANY OTHER STATEMENTS OR ACTIONS OF COMPANY OR PURCHASERS. THE PARTIES ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED
IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL SELECTED OF THEIR OWN FREE WILL.
THE PARTIES FURTHER ACKNOWLEDGE THAT (i) THEY HAVE READ AND UNDERSTAND THE MEANING AND RAMIFICATIONS OF THIS WAIVER, (ii) THIS
WAIVER HAS BEEN REVIEWED BY THE PARTIES AND THEIR COUNSEL AND IS A MATERIAL INDUCEMENT FOR ENTRY INTO THIS

    	18

    	

    

AGREEMENT AND THE REGISTRATION
RIGHTS AGREEMENT AND (iii) THIS WAIVER SHALL BE EFFECTIVE AS TO EACH OF SUCH TRANSACTION DOCUMENTS AS IF FULLY INCORPORATED THEREIN.

 

8.16      Expenses.
Except as otherwise provided in this Agreement, each of the parties will bear and pay all other costs and expenses incurred by
it or on its behalf in connection with the transactions contemplated pursuant to this Agreement except that, at the Closing, the
Company shall bear, and upon request by Purchasers, reimburse each Purchaser (or group of Affiliated Purchasers) that purchases
a Note with an initial principal amount of at least $10,000,000 for all reasonable out-of-pocket fees and expenses of attorneys
incurred by each Purchaser and their Affiliates in connection with the negotiation and preparation of this Agreement and undertaking
of the transactions contemplated pursuant to this Agreement for a flat fee of $15,000.00.

 

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

 

[Signature Pages Follow]

    	19

    	

    

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

 

	 	COMPANY:	 
	 	 
	 	CONNECTONE BANCORP, INC.	 
	 	 
	 	By:	 
	 	 	Name:	Frank S. Sorrentino III
	 	 	Title:	Chief Executive Officer
	 	 	 	 	 

 

[Company Signature
Page to Subordinated Note Purchase Agreement]

    	 

    	

    

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

 

	 	PURCHASER:	 
	 	 
	 	[INSERT PURCHASER’S NAME]	 
	 	 
	 	By:	 
	 	 	Name:	[●]
	 	 	Title:	[●]
	 	 	 	 	 

 

[Purchaser Signature
Page to Subordinated Note Purchase Agreement]

    	 

    	

    

SCHEDULE I

 

	Purchaser	Amount
                                                           of Note ($)

         

	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	Aggregate
                                                                                                            Amount of Subordinated
                                                                                                            Notes:

         
	$50,000,000.00

    	 

    	

    

EXHIBIT A

 

FORM OF INDENTURE

    	 

    	

    

EXHIBIT B

 

FORM OF REGISTRATION RIGHTS AGREEMENT

    	 

    	

    

EXHIBIT C

 

OPINION OF COUNSEL

 

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

 

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

 

3.        The Agreement
has been duly and validly authorized, executed and delivered by Company. The Indenture has been duly and validly authorized by
Company.

 

4.        The Registration
Rights Agreement has been duly and validly authorized, executed and delivered by the Company.

 

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

 

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

 

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

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