Document:

EXHIBIT 10.8

 

STOCK PURCHASE AGREEMENT

 

THIS STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of July 14, 2009
(the “Signing Date”), is by and among State
Bank and Trust Company, a banking corporation organized under the laws of the
State of Georgia, (the “Bank”),
and each of the investors identified on the signature pages hereto
(individually, a “Purchaser” and
collectively, the “Purchasers”).

 

WHEREAS:

 

A.                                   The Bank and
each Purchaser (severally and not jointly) is executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Section 4(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506 of
Regulation D as promulgated by the United States Securities and Exchange
Commission (the “Commission”) under the 1933 Act (“Regulation D”).

 

B.                                     Each Purchaser,
severally and not jointly, wishes to purchase and the Bank wishes to sell, upon
the terms and conditions stated in this Agreement, shares of common stock, par
value $5.00 per share, of the Bank (the “Common
Stock”), in the aggregate number indicated below such Purchaser’s
name on the signature page of this Agreement (which aggregate amount for
all Purchasers together shall be 28,455,000 shares of Common Stock and shall
collectively be referred to herein as the “Common
Shares”).

 

C.                                     The Bank has
engaged FBR Capital Markets & Co. as its placement agent (the “Placement Agent”) for the offering of the Common Shares on a
“best efforts” basis.

 

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and
for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Bank and each Purchaser, severally and not
jointly, hereby agree as follows:

 

1.                                       PURCHASE AND
SALE OF COMMON SHARES

 

(a)                                  Purchase of Common Shares.

 

On
the terms set forth in this Agreement and subject to the satisfaction (or
waiver) of the conditions set forth in Sections 6 and 7 below, the Bank shall
issue and sell to each Purchaser, and each Purchaser severally, but not
jointly, shall purchase from the Bank on the Closing Date (as defined below),
the number of Common Shares as indicated below such Purchaser’s name on the
signature page of this Agreement at the closing (the “Closing”). 
The Bank, at any time, in its sole discretion, will determine whether or
not the subscription for the number of Common Shares as indicated below each
Purchaser’s name on the signature pages of this Agreement will be accepted
or rejected, in whole or in part, which may occur after the Signing Date.  If a subscription is rejected in part, then
the subscription for the number of Common Shares as indicated below such
Purchaser’s name on the signature page of this Agreement automatically
will be deemed to be modified and amended to reflect the actual number of
Common Shares to be received by such Purchaser; provided,
however, that such 

 

 

Purchaser’s
subscription may not be rejected in part after the Signing Date without such
Purchaser’s prior consent.  With respect
to each subscription that is rejected, in whole or in part, the Bank will
direct the Escrow Agent (as defined below) to as promptly as practicable issue
a Federal Funds wire transfer in the amount of the rejected investment (if
rejected only in part, then the amount rejected in part only), without
interest, directly to such Purchaser in accordance with the Escrow Agreement
(as defined below) without liability of any party to any other party.

 

(i)                                     Closing.  The date of the Closing (the “Closing Date”) shall be the day the Bank receives
notice of the acceptance of its bid from the Federal Deposit Insurance
Corporation (“FDIC”)  (or
the next business day thereafter if necessary to complete the Closing process)
at the offices of Nelson Mullins Riley & Scarborough LLP, Atlantic
Station, 201 17th Street, Suite 1700, Atlanta, Georgia
30363, or at such other location as mutually agreed upon by the parties hereto.

 

(ii)                                  Purchase Price.  The purchase price is $10.00 per share, and
the aggregate purchase price for the Common Shares to be purchased by each such
Purchaser at the Closing (the “Purchase Price”)
shall be the amount indicated below such Purchaser’s name on the signature page of
this Agreement.

 

(b)                                 Form of Payment.  Prior to the Closing Date, each Purchaser
shall have either delivered the Purchase Price to the Placement Agent (i) by
means of a check payable to “Bank of New York Mellon, as Escrow Agent for State
Bank and Trust Company” or (ii) by wire transfer to the following account
at Bank of New York Mellon (the “Escrow Agent”):  Bank of New York Mellon, ABA No. ***-***-***,
Credit: State Bank and Trust Company, Account No. *****.  On the Closing Date: (x) the Escrow
Agent shall wire to the Bank the Purchase Price for each Purchaser in
accordance with the terms of the Escrow Agreement, dated July 6, 2009,
among the Escrow Agent, the Placement Agent and the Bank (the “Escrow Agreement”); (y) the Bank shall deliver to the
Escrow Agent, as agent for the Bank, the Common Shares with written
instructions to deliver the Common Shares to the Purchasers as set forth
therein; and (z) the Escrow Agent shall deliver to each Purchaser the
amount of Common Shares that such Purchaser is purchasing hereunder, registered
in the name of such Purchaser or its designee.

 

(c)                                  Transaction Documents.  The term “Transaction Documents” includes
this Agreement (including the Appendices attached hereto) and the Escrow
Agreement, but does not include the P&A Agreement (as defined in Section 2(e)(iii)),
the complete bid proposal submitted by the Bank to the FDIC to acquire the
assets and liabilities of the Target Banks (as defined in Section 2(e)(iii)),
or any other documents or agreements entered into in connection with the
Proposed Acquisition (as defined in Section 2(e)(iii)).  Certain information related to the Proposed
Acquisition, including a summary of the bid by the Bank to acquire the Target
Banks, is set forth in an Offering Summary (as defined in
Section 2(e)(iii)), and such information shall be updated by the Bank, and
provided to the Purchasers, upon any material change thereto.

 

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2.                                       PURCHASER’S
REPRESENTATIONS AND WARRANTIES.

 

Each
Purchaser represents and warrants as of the date hereof and as of the Closing
Date (except for the representations and warranties that are as of a specific
date, which shall be made as of such date) to the Bank that:

 

(a)                                  No Public Sale or
Distribution.  Such
Purchaser understands that the Common Shares have not been registered under the
1933 Act or any applicable state securities law and is acquiring the Common
Shares as principal for its own account and not with a view towards, or for
resale in connection with, the public sale or distribution thereof, except
pursuant to sales registered or exempted under the 1933 Act; provided, however, that by making the representations
herein, such Purchaser does not agree to hold any of the Common Shares for any
minimum or other specific term and reserves the right to sell or dispose of the
Common Shares at any time in accordance with or pursuant to a registration
statement or an exemption under the 1933 Act and pursuant to the applicable
terms of the Transaction Documents.  Such
Purchaser is acquiring the Common Shares hereunder in the ordinary course of
its business.  Such Purchaser does not
presently have any agreement or understanding, directly or indirectly, with any
Person (as defined in Section 3(u)) to distribute any of the Common
Shares.

 

(b)                                 Purchaser Status.  Such Purchaser is an “accredited investor” as
that term is defined in Rule 501(a) of Regulation D and has
provided the information in the Accredited Investor Questionnaire attached
hereto as Appendix II.  Such
Purchaser is not a registered broker-dealer under Section 15 of the Securities
Exchange Act of 1934, as amended (the “1934 Act”) or
an unregistered broker-dealer engaged in the business of being a broker-dealer.

 

(c)                                  General Solicitation.  Such Purchaser is not purchasing the Common
Shares as a result of any advertisement, article, notice or other communication
regarding the Common Shares published in any newspaper, magazine or similar
media or broadcast over television or radio or presented at any seminar or any
other general advertisement.

 

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

 

(e)                                  Review of Information and
Consultation with Advisors.  Such Purchaser has, either alone or through
its representatives:

 

(i)                                     consulted with
its own legal, regulatory, tax, business, investment, financial and accounting
advisers in connection herewith to the extent it has deemed necessary;

 

(ii)                                  had a
reasonable opportunity to ask such questions as it has deemed necessary of, and
to receive answers from, officers and representatives of the Bank concerning
the Bank and its financial condition and results of operations, the terms and 

 

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conditions of the offering of the Common Shares, and
any additional relevant information that the Bank possesses, and any such
questions have been answered to its satisfaction;

 

(iii)                               had the
opportunity to review and evaluate the following in connection with its
investment decision in the Common Shares: (A) all publicly available
records and filings concerning the Bank, as well as all other documents,
records, filings, reports, agreements and other materials provided by the Bank
regarding its business, operations and financial condition sufficient to enable
it to evaluate its investment; (B) the offering overview, investor
presentations (as supplemented), and term sheet (collectively, the “Offering Summary”) that summarizes this offering, the
proposed transaction by the Bank to use the proceeds of this offering to
acquire the assets and liabilities of Security Bank of North Metro, Security
Bank of Gwinnett County, Security Bank of North Fulton, Security Bank of
Houston County, Security Bank of Jones County, and Security Bank of Bibb County, which institutions are in receivership (each, a “Target Bank,” and collectively, the “Target Banks”),
through the FDIC bid process for failed institutions  (the
“Proposed Acquisition”), and the Bank’s
proposed and final bid information to acquire the Target Banks; (C) the
publicly available records and filings concerning the Target Banks; and (D) the
FDIC’s form of purchase and assumption agreement to be entered into by the Bank
and the FDIC with respect to the Proposed Acquisition of the Target Banks (the
“P&A Agreement”);

 

(iv)                              electronically
agreed to the FDIC confidentiality agreement for each Target Bank contained in
the electronic data room maintained by the FDIC for such Target Bank, and had
the opportunity to review and evaluate all documents, records, filings,
reports, agreements and other materials regarding the Target Banks’ business,
operations and financial condition, including the assets and liabilities, that
were provided by the FDIC and were made available in an electronic data room
maintained by the FDIC for each Target Bank;

 

(v)                                 had the
opportunity to review, evaluate and meet with the proposed management team that
will operate and manage the Bank after the completion of the Proposed
Acquisition and the Closing, including review of any subscription agreements,
purchase agreements, warrant agreements, lock-up agreements and employment
agreements between the Bank and the proposed management team, all of which have
been provided to such Purchaser and constitute all of the agreements,
arrangements or understandings between the Bank and the proposed new management
team as of the Closing Date; and

 

(vi)                              made its own
investment decisions based upon its own judgment, due diligence and advice from
such advisers as it has deemed necessary and not upon any view expressed by any
Person.  Neither such inquiries nor any
other due diligence investigations conducted by such Purchaser or its advisors,
if any, or its representatives shall modify, amend or affect such Purchaser’s
right to rely on the Bank’s representations and warranties contained
herein.  Such Purchaser understands that
its investment in the Common Shares involves a high degree of risk and is able
to afford a complete loss of such investment.

 

(f)                                    No Reliance.  Purchaser acknowledges that the information
in the Offering Summary is as of the date thereof and may not contain all of
the terms and conditions of the offering and the Proposed Acquisition, and
understands and acknowledges that it is Purchaser’s responsibility to:
(i) conduct its own independent investigation and evaluation of the
Bank, the 

 

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Target
Banks and the Proposed Acquisition, including, without limitation,
(A) the information provided by the FDIC that was set forth in the
electronic data room regarding the Target Banks and (B) the business
prospects and future operations of the Bank after completion of the Proposed
Acquisition; and (ii) review and evaluate the management team proposed to
operate and manage the Bank upon completion of the Proposed Acquisition
and after the Closing.  Such Purchaser is
not relying upon, and has not relied upon, any advice, statement, representation
or warranty made by any Person, including, without limitation, the Placement
Agent, except for the statements, representations and warranties of the Bank
made or contained in this Agreement. 
Furthermore, such Purchaser acknowledges that: (1) the Placement
Agent has not performed any due diligence review on behalf of the Purchaser;
(2) the Purchaser has made, and has relied upon, its own independent
examination in purchasing the Common Shares, including, without limitation, of
the Bank, the Target Banks, the Proposed Acquisition and the proposed
management team that will operate and manage the Bank after the completion of
the Proposed Acquisition; (3) nothing in this Agreement or any other
materials presented by or on behalf of the Bank to the Purchaser in connection
with the purchase of the Common Shares constitutes legal, tax or investment
advice and such Purchaser has consulted such legal, tax and investment advisors
as it, in its sole discretion, has deemed necessary or appropriate in
connection with its purchase of the Common Shares; and (4) the Purchaser
received or had access to all of the information the Purchaser deemed necessary
in order to make its investment decision in the Common Shares.  Purchaser acknowledges and understands that
there is no representation or warranty being made to Purchaser as to the
suitability or sufficiency of the information provided by the FDIC regarding
the Target Banks or the assets and liabilities of the Target Banks to be
acquired in the Proposed Acquisition. 
Such Person, including, without limitation, the Placement Agent, is a
third-party beneficiary to this Section 2(f).

 

(g)                                 No Public Market; No
Governmental Review; Common Shares Not Insured.  Such Purchaser understands that there is no
established market for the Common Shares and that no public market for the
Common Shares may develop.  Such
Purchaser understands that no United States federal or state agency or any
other government or governmental agency has passed on or made any
recommendation or endorsement of the Common Shares or the fairness or
suitability of the investment in the Common Shares nor have such authorities
passed upon or endorsed the merits of the offering of the Common Shares.  Such Purchaser understands that the Common
Shares are not deposits or other obligations of a depository institution and
are not insured by the FDIC, including the FDIC’s Deposit Insurance Fund, or
any other governmental agency.

 

(h)                                 Brokers and Finders.  No Person will have, as a result of the
transactions contemplated by this Agreement, any valid right, interest or claim
against or upon the Bank, or any Purchaser, for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered
into by or on behalf of such Purchaser.

 

(i)                                     No Conflicts.  The execution, delivery and performance by
such Purchaser of this Agreement and the consummation by such Purchaser of the
transactions contemplated hereby will not (i) result in a violation of the
organizational documents of such Purchaser, or (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which such Purchaser

 

5

 

is
a party, or (iii) result in a violation of any law, rule, regulation,
order, judgment or decree (including federal and state securities laws and
regulations, assuming the correctness of the representations and warranties
made by the Bank herein) applicable to such Purchaser, except in the case of
clauses (ii) and (iii) above, for such conflicts, defaults, rights or
violations which would not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the ability of such Purchaser to
perform its obligations hereunder.

 

(j)                                     Investment Risk.  Such Purchaser understands that its
investment in the Common Shares involves a high degree of risk and that no
representation is being made as to the business or prospects of the Bank after
completion of the Proposed Acquisition or the future value of the Common
Shares.  Such Purchaser, either alone or
together with its representatives, has the knowledge, sophistication and
experience in financial and business matters as to fully understand and be
capable of evaluating the merits and risks of an investment in the Common
Shares and has the ability to bear the economic risks of an investment in the
Common Shares and, at the present time, is able to afford a complete loss of
such investment.

 

(k)                                  Residency.  Such Purchaser has, if an entity, its
principal place of business or, if an individual, its primary residence in the
jurisdiction indicated below such Purchaser’s name on the signature pages hereto.

 

(l)                                     Organization; Authorization.  Such Purchaser is an entity duly organized,
validly existing and in good standing (to the extent such concept is
applicable) under the laws of the jurisdiction in which it is organized and has
the requisite organizational power and authority to carry on its business as
now being conducted.  Such Purchaser has
the requisite organizational power and authority to enter into and perform its
obligations under this Agreement and to consummate the transactions
contemplated by the Transaction Documents to which it is a party.  The execution and delivery of the Transaction
Documents by such Purchaser and performance by such Purchaser of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate or, if such Purchaser is not a corporation, such
partnership, limited liability company or other applicable like action, on the
part of such Purchaser and no further consent or authorization in connection
therewith is required by such Purchaser, its Board of Directors or its
shareholders, or if such Purchaser is not a corporation, such partnership,
limited liability company or other applicable like action, on the part of such
Purchaser.  This Agreement and the other Transaction
Documents to which the Purchaser is a party have been (or upon delivery will
have been) duly executed by such Purchaser, and when delivered by such
Purchaser in accordance with terms hereof and thereof, will constitute the
legal, valid and binding obligations of such Purchaser, enforceable against it
in accordance with its respective terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance or transfer, reorganization, moratorium and
similar laws affecting creditors’ rights and remedies generally, and to general
principles of equity, including principles of materiality, commercial
reasonableness, good faith and fair dealing (regardless of whether enforcement
is sought in a proceeding at law or in equity) and except that rights to
indemnification and contribution thereunder may be limited by federal or state
securities laws or public policy relating thereto.

 

(m)                               Ownership of Common Stock
and Non-Exercise of Controlling Influence.  After giving effect to the purchase of Common
Shares hereunder and assuming full exercise of the put right described in
Section 3(t) by the current shareholders of the Bank, such Purchaser,

 

6

 

either
acting alone or together with any other person or entity that may be affiliated
with such Purchaser, or deemed to be acting in concert with such Purchaser
pursuant to 12 C.F.R. Part 303, Subpart E, will not beneficially
own in excess of 9.9% of the shares of Common Stock outstanding (or 4.9% in the
event that a Purchaser is a bank, bank holding company or other “company” as
defined by 12 C.F.R. § 225.2(d)) immediately after giving effect to
the issuance of the Common Shares to all of the Purchasers hereunder.  Without limiting the foregoing, Purchaser
represents and warrants that such Purchaser: (i) has no present intention
of acquiring control of the Bank, as “control” is defined in 12 C.F.R.
Part 303, Subpart E (“Control”); (ii) will not acquire Control
in the future without the prior approval of the applicable Governmental
Entities (as defined below); (iii) is not participating and has not
participated with any other Purchaser in any joint activity or parallel action
towards a common goal between or among such Purchasers of acquiring Control of
the Bank; (iv) no other person holding Common Shares of the Bank or that
presently proposes to acquire Common Shares of the Bank is (a) a member of
Purchaser’s immediate family (if Purchaser is an individual), (b) under
common Control with Purchaser, or (c) a controlling shareholder, partner,
trustee, officer, or director of Purchaser or has policy-making functions with
respect to Purchaser, unless, with regard to this clause 2(m)(iv), all such
persons together with such Purchaser would beneficially own no more than 9.9% of
the shares of Common Stock; and (v) will not, without first determining
whether the prior approval of the applicable Government Entities is required
and, if such approval is required, obtaining such approval, directly or
indirectly seek to appoint any director or executive officer to the Bank or
otherwise attempt to direct the management or policies of the Bank.

 

(n)                                 Review of Risk Factors.  Such Purchaser recognizes that the Bank is a
recently organized institution and has limited financial or operating history,
and that an investment in the Common Shares involves certain risks.  Such Purchaser has read and understands the
Bank’s “Risk Factors” outlining certain, but not all, risks related to the Bank
and an investment in the Bank, a copy of which is attached hereto as Exhibit A.

 

3.                                       REPRESENTATIONS
AND WARRANTIES OF THE BANK.

 

The
Bank hereby represents and warrants as of the date hereof and as of the Closing
Date (except for the representations and warranties that are as of a specific
date which shall be made as of that date) to each of the Purchasers that:

 

(a)                                  Organization and
Qualification.

 

(i)                                     The Bank has
been duly incorporated and is validly existing as a banking corporation in good
standing under the laws of the State of Georgia, with the requisite corporate
power and authority to carry on its business as now being conducted, and as
will be conducted following the closing of the Proposed Acquisition, and has
been duly qualified as a foreign corporation for the transaction of business
and is in good standing under the laws of each other jurisdiction in which it
owns or leases properties, or conducts its business in a manner or to an extent
that would require such qualification, other than such failures to be so
qualified or in good standing as, individually or in the aggregate, would not
reasonably be expected to have a Bank Material Adverse Effect.  The Bank is an insured depository institution
pursuant to the provisions of the Federal Deposit Insurance Act, as amended,
and all premiums and assessments required to be paid in connection therewith
have been paid when due.

 

7

 

(ii)                                  As used in this
Agreement, “Bank Material Adverse Effect”
means any material adverse effect on the business, results of operation,
prospects or financial condition of the Bank or on the transactions
contemplated by this Agreement, the other Transaction Documents and by the
P&A Agreement or by the transactions, agreements and instruments to be
entered into in connection herewith or therewith (including, without
limitation, the Proposed Acquisition and the proposed new management team to
manage and operate the Bank after the completion of the Proposed Acquisition),
or on the authority or ability of the Bank to perform its obligations under the
Transaction Documents or the P&A Agreement; provided,
however, that Bank Material Adverse Effect shall not be deemed to
include the effects of (A) changes after the Signing Date in general
business, economic or market conditions (including changes generally in
prevailing interest rates, credit availability and liquidity, currency exchange
rates and price levels or trading volumes in the United States or foreign
securities or credit markets), or any outbreak or escalation of hostilities,
declared or undeclared acts of war or terrorism, in each case generally
affecting the industries in which the Bank operates, (B) changes or
proposed changes after the Signing Date in generally accepted accounting
principles in the United States (“GAAP”) or
regulatory accounting requirements, or authoritative interpretations thereof,
(C) changes or proposed changes after the Signing Date in securities,
banking and other laws of general applicability or related policies or
interpretations of any federal or state agency charged with the supervision or
regulation of depository institutions or holding companies of depository
institutions, or engaged in the insurance of depository institution deposits,
or any court, administrative agency or commission or other governmental agency,
authority or instrumentality having supervisory or regulatory authority with
respect to the Bank (each a “Governmental Entity”
and collectively, “Governmental Entities”)
(in the case of each of these clauses (A), (B) and (C), other than changes
or occurrences to the extent that such changes or occurrences have or would
reasonably be expected to have a disproportionate adverse effect on the Bank
relative to comparable U.S. banking or financial services organizations), or
(D) changes in the market price or trading volume of the Common Stock or
any other equity, equity-related or debt securities of the Bank (it being
understood and agreed that the exception set forth in this clause (D) does
not apply to the underlying reason giving rise to or contributing to any such
change).

 

(b)                                 Subsidiaries.  The Bank has no direct or indirect
subsidiaries.  The Bank does not,
directly or indirectly, own any joint venture or similar entity or capital
stock or hold any equity or similar interests.

 

(c)                                  Authorization; Enforcement;
Validity.  The Bank
has the requisite corporate power and authority to enter into and perform its
obligations under: (i) the Transaction
Documents and to issue the Common Shares in accordance with the terms
hereof and thereof and (ii) the P&A Agreement and the transactions
contemplated thereby.  The execution and
delivery of the Transaction Documents and the P&A Agreement by the Bank and
the consummation by the Bank of the transactions contemplated hereby and
thereby, including, without limitation, the issuance of the Common Shares, have
been duly authorized by the Bank’s Board of Directors and no further consent or
authorization in connection therewith is required by the Bank, its Board of
Directors or its shareholders.  This
Agreement, the other Transaction Documents and the P&A Agreement to which
the Bank is a party have been duly executed and delivered by the Bank, and
constitute the legal, valid and binding obligations of the Bank, enforceable
against the Bank in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, fraudulent 

 

8

 

conveyance
or transfer, reorganization, moratorium and similar laws affecting creditors’
rights and remedies generally, and to general principles of equity, including
principles of materiality, commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity) and except that rights to indemnification and contribution thereunder
may be limited by federal or state securities laws or public policy relating
thereto.

 

(d)                                 Issuance of Common Shares.  The Common Shares are duly authorized and,
upon issuance in accordance with the terms of the Transaction Documents, shall
be validly issued and free from all preemptive or similar rights, taxes, liens
and charges with respect to the issuance thereof, and the Common Shares shall
be fully paid and nonassessable with the holders being entitled to all rights
accorded to a holder of Common Stock. 
The offer and issuance by the Bank of the Common Shares is exempt from
registration under the 1933 Act.

 

(e)                                  Adequate Capitalization.  As of June 30, 2009, the Bank meets or
exceeds the standards necessary to be considered “adequately capitalized” under
the FDIC’s regulatory framework for prompt corrective action and is in
compliance with all regulatory capital requirements of the State of Georgia.

 

(f)                                    No Conflicts.  The execution, delivery and performance of
the Transaction Documents to which it is a party and the P&A Agreement by
the Bank and the consummation by the Bank of the transactions contemplated
hereby and thereby (including, without limitation, the issuance of the Common
Shares) will not (i) result in a violation of the Articles of Incorporation
(the “Articles of Incorporation”), the Bylaws
(“Bylaws”) or the capital stock of the
Bank or (ii) conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) in any respect
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Bank is a
party, except, in each case in this clause (ii), for such conflicts, defaults
or events of default which would not, individually or in the aggregate,
reasonably be expected to have a Bank Material Adverse Effect or (iii) except
as would not reasonably be expected to result in a Bank Material Adverse
Effect, result in a violation of any law, rule, regulation, order, judgment or
decree (including federal and state securities laws and regulations, assuming
the correctness of the representations and warranties made by the Purchasers
herein) applicable to the Bank or by which any property or asset of the Bank is
bound or affected.

 

(g)                                 Consents.  Except for any report or notice required
under Regulation D or any applicable state securities laws, the Bank is
not required to obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any court, governmental
agency or any regulatory or self-regulatory agency or any other Person in order
for it to execute, deliver or perform any of its obligations under the
Transaction Documents to which it is a party and the P&A Agreement, in each
case, in accordance with the terms hereof or thereof.  The Bank is unaware of any facts or
circumstances that might prevent the Bank from obtaining or effecting any of
the registration, application or filings pursuant to the preceding sentence
required to be obtained or effected.

 

(h)                                 Acknowledgment Regarding
Purchaser’s Purchase of Common Shares.  The Bank acknowledges and agrees that each
Purchaser is acting solely in the capacity of an 

 

9

 

arm’s
length purchaser with respect to the Transaction Documents and the transactions
contemplated hereby and thereby and that no Purchaser is (i) an officer or
director of the Bank, (ii) to the knowledge of the Bank, an “affiliate” of
the Bank (as defined in Rule 144 of the 1933 Act) or (iii) to the
knowledge of the Bank, a “beneficial owner” of more than 10% of the Common
Stock (as defined for purposes of Rule 13d-3 of the 1934 Act).  The Bank further acknowledges that no
Purchaser is acting as a financial advisor or fiduciary of the Bank (or in any
similar capacity) with respect to the Transaction Documents and the
transactions contemplated hereby and thereby, and any advice given by a
Purchaser or any of its representatives or agents in connection with the
Transaction Documents and the transactions contemplated hereby and thereby is
merely incidental to such Purchaser’s purchase of the Common Shares.  The Bank further represents to each Purchaser
that the Bank’s decision to enter into the Transaction Documents has been based
solely on an independent evaluation by the Bank and its representatives.

 

(i)                                     No General Solicitation;
Placement Agent’s Fees. 
Neither the Bank nor any of its affiliates, nor, to the Bank’s
knowledge, any Person acting on its or their behalf, has engaged in any form of
“general solicitation” or “general advertising” (within the meaning of
Regulation D) in connection with the offer or sale of the Common
Shares.  The Bank shall be responsible for
the payment of any placement agent’s fees, financial advisory fees, or brokers’
commissions (other than fees or commissions of persons engaged by any Purchaser
or its investment advisor) relating to or arising out of the transactions
contemplated hereby.  Other than the
Placement Agent, the Bank has not engaged any placement agent or other agent in
connection with the sale of the Common Shares.

 

(j)                                     Ownership.  The Bank acknowledges, represents, warrants
and agrees that after giving effect to the purchase of the Common Shares
hereunder, and giving effect to the exercise of the put right described in
Section 3(t) by the current shareholders of the Bank, that no
Purchaser will be issued more than 9.9% of the shares of Common Stock
outstanding immediately after giving effect to the issuance of the Common
Shares to all of the Purchasers hereunder. 
The Bank acknowledges that each Purchaser is relying on the
capitalization information in the Offering Summary, as supplemented, that has
been provided by the Bank in order for such Purchaser to determine its ownership
of the Common Shares as of the Closing.

 

(k)                                  No Integrated Offering.  Neither the Bank nor any of its affiliates,
nor any Person acting on its or their behalf, has, directly or indirectly, at
any time within the past six months made any offers or sales of any Bank
security or solicited any offers to buy any security, under circumstances that
would require registration of the issuance of any of the Common Shares under
the 1933 Act, whether through integration with prior offerings or otherwise, or
cause this offering of the Common Shares to require approval of shareholders of
the Bank for purposes of any applicable shareholder approval provisions.  None of the Bank, its affiliates and any
Person acting on their behalf will take any action or steps referred to in the
preceding sentence that would require registration of the issuance of any of
the Common Shares under the 1933 Act or shareholder approval under applicable
shareholder approval provisions.

 

(l)                                     Regulatory Enforcement
Matters; Distributions.  Neither the Bank nor any of its respective
officers, directors, employees or representatives, is subject or is party to,
or has received any notice from any Governmental Agency that any of them shall
become subject or 

 

10

 

party
to any investigation with respect to any cease-and-desist order, agreement,
civil monetary penalty, consent agreement, memorandum of understanding or other
regulatory enforcement action, proceeding or order with or by, or is a party to
any commitment letter or similar undertaking to, or is subject to any directive
by, or has been a recipient of any supervisory letter from, or has adopted any
board resolutions at the request or suggestion of, any Governmental Agency
that, in any such case, currently restricts in any material respect the conduct
of their business or that in any manner relates to their capital adequacy,
their credit policies, their management or their business (each, a “Regulatory Action”), nor has the Bank been advised by any
Governmental Agency that it is considering issuing or requesting any such
Regulatory Action; and there is no unresolved material violation, criticism or
exception by any Governmental Agency with respect to any report or statement
relating to any examinations of the Bank.

 

The Bank has no knowledge of any facts and
circumstances, and has no reason to believe that any facts or circumstances
exist, that would cause it (i) to be deemed not to be in satisfactory
compliance with the Community Reinvestment Act and the regulations promulgated
thereunder or to be assigned a CRA rating by federal or state banking
regulators of lower than “satisfactory”; (ii) to be deemed to be operating
in violation, in any material respect, of the Bank Secrecy Act, the Patriot
Act, any order issued with respect to anti-money laundering by the U.S.
Department of the Treasury’s Office of Foreign Assets Control, or any other
anti-money laundering statute, rule or regulation; or (iii) to be
deemed not to be in satisfactory compliance, in any material respect, with all
applicable privacy of customer information requirements contained in any
federal and state privacy laws and regulations.

 

Except as would not reasonably be expected to have,
individually or in the aggregate, a Bank Material Adverse Effect, the Bank has
properly administered all accounts for which it acts as a fiduciary, including
accounts for which it serves as a trustee, agent, custodian, personal
representative, guardian, conservator or investment advisor, in accordance with
the terms of the governing documents, applicable federal and state law and
regulation and common law.  None of the
Bank or any director, officer or employee of the Bank has committed any breach
of trust or fiduciary duty with respect to any such fiduciary account that
would reasonably be expected to have, individually or in the aggregate, a Bank
Material Adverse Effect and, except as would not reasonably be expected to
have, individually or in the aggregate, a Bank Material Adverse Effect, the
accountings for each such fiduciary account are true and correct and accurately
reflect the assets of such fiduciary account.

 

(m)                               Bank Secrecy Act, Anti-Money
Laundering and OFAC and Customer Information.  The Bank is not aware of, has not been
advised of, and, to the Bank’s knowledge, has no reason to believe that any
facts or circumstances exist, which would cause it to be deemed to be not
(i) operating in compliance, in all material respects, with the Bank
Secrecy Act of 1970, as amended, the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001 (also known as the USA PATRIOT Act), any order issued by the U.S.
Department of the Treasury’s Office of Foreign Assets Control, or any other
applicable anti-money laundering statute, rule or regulation; and
(ii) operating in compliance in all material respects with the applicable
privacy and customer information requirements contained in any federal and
state privacy laws and regulations, including, without limitation, in Title V
of the Gramm-Leach-Bliley Act of 1999 and the regulations promulgated
thereunder.  

 

11

 

The
Bank is not aware of any facts or circumstances that would cause it to believe
that any non-public customer information has been disclosed to or accessed by
an unauthorized third party in a manner that would cause it to undertake any
material remedial action.  The Bank’s
Board of Directors has adopted and implemented an anti-money laundering program
that contains adequate and appropriate customer identification verification
procedures that comply with the USA PATRIOT Act and such anti-money laundering
program meets the requirements in all material respects of Section 352 of
the USA PATRIOT Act and the regulations thereunder, and it has complied in all
respects with any requirements to file reports and other necessary documents as
required by the USA PATRIOT Act and the regulations thereunder.

 

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

 

(o)                                 Financial Statements.  From and after December 31, 2007, all
financial statements of the Bank complied as to form in all material respects
with applicable accounting requirements, and have been prepared in accordance
with GAAP, consistently applied, during the periods involved (except
(i) as may be otherwise indicated in such financial statements or the
notes thereto and (ii) in the case of unaudited interim financial statements,
to the extent they may exclude footnotes, may be subject to customary year-end
adjustments or may be condensed or summary statements) and fairly present in
all material respects the financial position of the Bank as of the dates
thereof and the results of its operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments).

 

(p)                                 Absence of Certain Changes.  Since December 31, 2008, (i) there
has been no event, occurrence or development that has had or that could
reasonably be expected to result in a Bank Material Adverse Effect,
(ii) the Bank has not incurred any material liabilities (contingent or
otherwise) other than trade payables, accrued expenses, and other liabilities
incurred in the ordinary course of business consistent with past practice,
(iii) the Bank has not altered its critical accounting policies or the
identity of its auditors, (iv) the Bank has not  purchased,
redeemed or made any agreements (except for the put right described in
Section 3(t)) to purchase or redeem any shares of its capital stock, and
(v) the Bank has not issued any equity securities to any officer, director
or affiliate (except for equity securities described in the Offering Summary).

 

(q)                                 No Undisclosed Events,
Liabilities, Developments or Circumstances.  Other than the impact of completion of the
Proposed Acquisition and the events disclosed in the Offering Summary, there
are no obligations or liabilities of the Bank that, individually or in the
aggregate, would reasonably be expected to have a Bank Material Adverse Effect.

 

12

 

(r)                                    Conduct of Business;
Regulatory Permits.  The Bank is
not in violation of any term or provision of its Articles of Incorporation or
Bylaws.  The Bank is not in violation in
any material respect of any judgment, decree or order or any statute,
ordinance, rule or regulation applicable to the Bank.  The Bank possesses all material certificates,
authorizations and permits issued by the appropriate regulatory authorities
necessary to conduct its business as presently conducted and as is proposed to
be conducted following consummation of the Proposed Acquisition.  The Bank has not received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization or permit.

 

(s)                                  Transactions With Affiliates.  None of the officers, directors or employees
of the Bank, or any of the officers, directors or employees of the Bank
proposed in connection with the Proposed Acquisition, is, directly or
indirectly, presently a party to any transaction with the Bank (other than for
ordinary course services as employees, officers or directors), which is, taken
individually or in the aggregate with other unreported transactions, material,
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any such
officer, director or employee or any corporation, partnership, trust or other
entity in which any such officer, director, or employee has a substantial
interest or is an officer, director, trustee or partner.

 

(t)                                    Equity Capitalization.  The authorized capital stock of the Bank
consists of 100,000,000 shares of Common Stock, of which 767,437 shares are
issued and outstanding, and 2,000,000 shares of preferred stock, $1.00 par
value per share, of which no shares of preferred stock are issued and
outstanding.  Additionally, the Bank has
entered into subscription agreements with certain individuals (including
members of proposed new management team) to purchase up to 800,000 shares
of Common Stock and, upon such acquisitions of Common Stock, warrants to
purchase up to 2,202,605 shares of Common Stock.  All of such outstanding shares have been, or
upon issuance will be, validly issued and are fully paid and
nonassessable.  None of the Bank’s
capital stock is subject to preemptive rights or any other similar rights or
any liens or encumbrances suffered or permitted by the Bank.  Except as disclosed in this
Section 3(t), there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, or exercisable or exchangeable for, any
shares of capital stock of the Bank, or contracts, commitments, understandings
or arrangements by which the Bank is or may become bound to issue additional
shares of capital stock of the Bank or options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, or exercisable or exchangeable for, any
capital stock of the Bank.  There are no
agreements or arrangements under which the Bank is obligated to register the
sale of any of their securities under the 1933 Act.  There are no outstanding securities or
instruments of the Bank which contain any redemption or similar provisions, and,
except for a put right whereby, within 90 days after regulatory approval,
shareholders of the Bank who held shares immediately prior to the Closing have
the right to cause the Bank to repurchase only the shares held by them prior to
the Closing (for a total of 767,437 shares) for $11.00 per share, there
are no contracts, commitments, understandings or arrangements by which the Bank
is or may become bound to redeem a security of the Bank.  There are no securities or instruments
containing anti-dilution or similar provisions that will be triggered by the
issuance of the Common Shares.  The Bank
does not have any stock appreciation rights or “phantom stock” plans or
agreements or any similar plan or agreement.

 

13

 

(u)                                 Indebtedness and Other
Contracts.  The Bank
(i) does not have any outstanding Indebtedness (as defined below),
(ii) is not a party to any contract, agreement or instrument, the
violation of which, or default under which, by the other party(ies) to such
contract, agreement or instrument would result in a Bank Material Adverse
Effect, or (iii) is not in violation of any term of or in default under
any contract, agreement or instrument relating to any Indebtedness, except
where such violations and defaults would not result, individually or in the
aggregate, in a Bank Material Adverse Effect. 
For purposes of this Agreement: (x) “Indebtedness” of any Person means, without duplication
(A) all indebtedness for borrowed money, (B) all obligations issued,
undertaken or assumed as the deferred purchase price of property or services,
including (without limitation) “capital leases” in accordance with GAAP (other
than trade payables entered into in the ordinary course of business),
(C) all reimbursement or payment obligations with respect to letters of
credit, surety bonds and other similar instruments, (D) all obligations
evidenced by notes, bonds, debentures or similar instruments, including
obligations so evidenced incurred in connection with the acquisition of
property, assets or businesses, (E) all indebtedness created or arising
under any conditional sale or other title retention agreement, or incurred as a
financing, in either case, with respect to any property or assets acquired with
the proceeds of such indebtedness (even though the rights and remedies of the
seller or bank under such agreement in the event of default are limited to
repossession or sale of such property), (F) all monetary obligations under
any leasing or similar arrangement which, in connection with GAAP, consistently
applied for the periods covered thereby, is classified as a capital lease,
(G) all indebtedness referred to in clauses (A) through
(F) above secured by (or for which the holder of such indebtedness has an
existing right, contingent or otherwise, to be secured by) any mortgage, lien,
pledge, charge, security interest or other encumbrance upon or in any property
or assets (including accounts and contract rights) owned by any Person, even
though the Person which owns such assets or property has not assumed or become
liable for the payment of such indebtedness, and (H) all Contingent
Obligations in respect of indebtedness or obligations of others of the kinds
referred to in clauses (A) through (G) above; (y) “Contingent Obligation” means, as to any
Person, any direct or indirect liability, contingent or otherwise, of that
Person with respect to any Indebtedness, lease, dividend or other obligation of
another Person if the primary purpose or intent of the Person incurring such
liability, or the primary effect thereof, is to provide assurance to the
obligee of such liability that such liability will be paid or discharged, or
that any agreements relating thereto will be complied with, or that the holders
of such liability will be protected (in whole or in part) against loss with
respect thereto; and (z) “Person”
means an individual, a limited liability company, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.

 

(v)                                 Absence of Litigation.  Except as in the ordinary course of the Bank’s
business, there is no action, suit, proceeding, inquiry or investigation before
or by any court, public board, government agency, self-regulatory organization
or body pending or, to the knowledge of the Bank, threatened against or
affecting the Bank, the Common Stock or any of the Bank’s officers or
directors.

 

(w)                               Insurance.  The Bank is insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
management of the Bank believes to be prudent and customary in the businesses
and location in which the Bank is engaged. 
The Bank has not been refused any insurance coverage sought or applied
for, and the 

 

14

 

Bank
does not have any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Bank Material Adverse Effect.

 

(x)                                   Employee Relations.

 

(i)                                     No material labor dispute
exists or, to the Bank’s knowledge, is imminent with respect to any of the
employees of the Bank that would have, or reasonably be expected to have, a
Bank Material Adverse Effect.  The Bank
is not a party to any collective bargaining agreement and does not employ any
member of a union.  The Bank believes
that its relations with its employees are satisfactory.  Other than in connection with changes
resulting from the introduction of the proposed new management team after the
completion of the Proposed Acquisition, no executive officer of the Bank has
notified the Bank that such officer intends to leave the Bank or otherwise
terminate such officer’s employment with the Bank.  Other than new employment agreements that
will be entered into with the proposed new management team, including Joseph W.
Evans, J. Daniel Speight, and Kim Michael Childers, in connection with the
Proposed Acquisition, as of the Closing Date, the Bank has not entered into any
employment agreements with any of its employees or any other agreement that
would require the Bank to provide severance payments or similar payments upon
termination.  In addition, the Bank may
retain certain of the current employees, including the current chief financial
officer, after the completion of the Proposed Acquisition.

 

(ii)                                  The Bank is in compliance
with all federal, state, local and foreign laws and regulations respecting
labor, employment and employment practices and benefits, terms and conditions
of employment and wages and hours, except where failure to be in compliance
would not, either individually or in the aggregate, reasonably be expected to
result in a Bank Material Adverse Effect.

 

(y)                                 Title.  The Bank has good and marketable title in fee
simple to all real property and good and marketable title to all personal
property owned by it, in each case free and clear of all liens, encumbrances
and defects, except for liens and encumbrances which do not materially affect
the value of such property and do not interfere with the use made and proposed
to be made of such property by the Bank. 
Any real property and facilities held under lease by the Bank are valid,
subsisting and enforceable leases with such exceptions that are not material
and do not interfere with the use made and proposed to be made of such property
and buildings by the Bank.

 

(z)                                   Intellectual Property Rights.  The Bank owns or possesses adequate rights or
licenses to use all trademarks, service marks and all applications and
registrations therefor, trade names, patents, patent rights, copyrights,
original works of authorship, inventions, trade secrets and other intellectual
property rights (“Intellectual Property
Rights”) necessary to conduct its business as conducted on the
Signing Date.  To the knowledge of the
Bank, no product or service of the Bank infringes the Intellectual Property
Rights of others.  Except as would not
reasonably be expected to have a Bank Material Adverse Effect, the Bank has not
received notice of any claim being made or brought, or, to the knowledge of the
Bank, being threatened, against the Bank regarding (i) its Intellectual
Property Rights, or (ii) that the products 

 

15

 

or
services of the Bank infringe the Intellectual Property Rights of others.  The Bank is not aware of any facts or
circumstances which might give rise to any of the foregoing claims.

 

(aa)                            Environmental Laws.  To the Bank’s knowledge, the Bank (i) is
in compliance with any and all Environmental Laws (as hereinafter defined),
(ii) has received all permits, licenses or other approvals required of it
under applicable Environmental Laws to conduct its business and (iii) is
in compliance with all terms and conditions of any such permit, license or
approval where, in each of the foregoing clauses (i), (ii) and (iii), the
failure to so comply could be reasonably expected to have, individually or in
the aggregate, a Bank Material Adverse Effect. 
The term “Environmental Laws”
means all federal, state or local laws relating to pollution or protection of
human health or the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata), including,
without limitation, laws relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes  into
the environment.

 

(bb)                          Tax Status.  The Bank (i) has prepared and filed all
foreign, federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject and required
to be filed through the Signing Date, subject to permitted extensions,
(ii) has paid all taxes and other governmental assessments and charges
that are material in amount, shown or determined to be due on such returns,
reports and declarations, except those being contested in good faith and
(iii) has set aside on its books provision reasonably adequate for the
payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply, except in the case of clauses
(i) and (ii) above, where the failure to so pay or file any such tax,
assessment, charge or return would not result in a Bank Material Adverse
Effect.  There are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction,
and the officers of the Bank know of no reasonable basis for any such claim.

 

(cc)                            Internal
Accounting and Disclosure Controls.  The Bank maintains a system of internal
accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to
maintain asset and liability accountability, (iii) access to assets or
incurrence of liabilities is permitted only in accordance with management’s
general or specific authorization and (iv) the recorded accountability for
assets and liabilities is compared with the existing assets and liabilities at
reasonable intervals and appropriate action is taken with respect to any
difference.  During the 24 months prior
to the date hereof, the Bank has not received any notice or correspondence from
any accountant relating to any material weakness in any part of the system of
internal accounting controls of the Bank.

 

(dd)                          Off Balance
Sheet Arrangements.  There is no
transaction, arrangement, or other relationship between the Bank and an
unconsolidated or other off-balance sheet entity.

 

(ee)                            Investment
Company Status.  The Bank is
not, and upon consummation of the sale of the Common Shares will not be, an “investment
company,” a company controlled by an “investment company” or an “affiliated
person” of, or “promoter” or “principal underwriter”

 

16

 

of, an “investment company,”
as such terms are defined in the Investment Company Act of  1940, as amended.

 

(ff)                                Transfer Taxes.  On the Closing Date, all stock transfer or
other taxes (other than income or similar taxes) which are required to be paid
in connection with the sale and transfer of the Common Shares to be sold to
each Purchaser hereunder will be, or will have been, fully paid or provided for
by the Bank, and all laws imposing such taxes will be or will have been
complied with.

 

(gg)                          Disclosure.  The Bank understands and confirms that each
of the Purchasers will rely on the foregoing representations and warranties in
purchasing the Common Shares.  All
disclosure provided to the Purchasers regarding the Bank, its business and the
transactions contemplated hereby (including, without limitation, the Proposed
Acquisition), furnished by or on behalf of the Bank on or prior to the Signing
Date, including without limitation, all disclosure contained in the Offering
Summary, when taken as a whole, does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they
were made, not misleading.  Any forward
looking information contained in such disclosure was prepared on the basis of
assumptions that the Bank reasonably believed in good faith at the time of
preparation to be reasonable and the Bank has no knowledge of any fact or
information that would lead it to believe that such assumptions are incorrect
or misleading in any material respect. 
The Bank expressly does not make any representation or warranty as to
any of the information provided by or made available by the FDIC regarding the
Target Banks or that relates to the Proposed Acquisition or the assets and
liabilities of the Target Banks that the Bank intends to acquire in the
Proposed Acquisition.

 

4.                                       COVENANTS.

 

(a)                                  Reasonable Best Efforts.  Subject to the terms and conditions of this
Agreement and acceptance by the FDIC of the Bank’s bid for the Target Banks,
each of the parties shall use its reasonable best efforts to take, or cause to
be taken, all actions, and to do, or cause to be done, all things necessary,
proper or desirable, or advisable under applicable laws, so as to permit
consummation of the issuance of the Common Shares as promptly as practicable
and otherwise to enable consummation of the transactions contemplated hereby
and shall use its reasonable best efforts to cooperate with the other party to
that end.

 

(b)                                 Notice Filings.  The Bank agrees to timely file any notices
and other filings that may be required under applicable federal and state
securities laws, and to provide copies thereof to Patton Boggs LLP, counsel to
the Placement Agent, after such filing.

 

(c)                                  Filing of Registration
Statement and Listing of Common Stock.

 

(i)                                     On or before
April 1, 2010 (the “First  Filing Deadline”), the Bank, or any newly formed holding
company of the Bank as a result of a Holding Company Reorganization (as defined
below), shall file a registration statement on Form 10, or any successor
form thereto (“Registration Statement”), with the
appropriate federal regulatory agency (whether the FDIC or the Commission), to
register the Common Shares (or any securities 

 

17

 

received in exchange for the Common Shares as a
result of a Holding Company Reorganization) under Section 12 of the
Exchange Act.  The Bank, or any newly
formed holding company of the Bank as a result of a Holding Company
Reorganization, shall use its commercially reasonable efforts to cause such
Registration Statement to be declared effective as soon as practicable after
the initial filing thereof, but no later than December 31, 2010 (the “Effectiveness Deadline”). 
The Bank (or the holding company formed in the Holding Company
Reorganization) shall pay the costs and expenses related to its preparation of
the Registration Statement and the filing and effectiveness thereof.

 

(ii)                                  The Bank, or
any newly formed holding company of the Bank as a result of a Holding Company
Reorganization, shall use its reasonable best efforts to enlist a market maker
(who meets the eligibility requirements under applicable Financial Industry
Regulatory Authority, Inc. (“FINRA”) rules)
to file an application with FINRA to register and quote the Common Shares (or
any securities received in exchange for the Common Shares as a result of a
Holding Company Reorganization) on the Over-the-Counter Bulletin Board Service
as soon as possible following the filing of the Registration Statement, but in
no event more than thirty (30) days after the Registration Statement is
declared effective.  In addition, after
the Registration Statement is declared effective, the Bank will use its
reasonable best efforts to file an initial listing application to list the
Common Shares (or any securities received in exchange for the Common Shares as
a result of a Holding Company Reorganization) on a national securities exchange
within thirty (30) days after the initial listing standards and corporate
governance requirements for such national securities exchange are satisfied by
the Bank, or any newly formed holding company of the Bank as a result of a
Holding Company Reorganization.  The Bank
shall take all actions necessary to comply with any such listing standards or
corporate governance requirements that are within its control.

 

(d)                                 Holding Company
Reorganization.  The Bank
may, within a reasonable period of time after the Closing and the consummation
of the Proposed Acquisition, and prior to the First Filing Deadline, form a
bank holding company in accordance with applicable requirements of the bank
holding company regulations and the laws of the State of Georgia.  Under current Georgia law, the formation of a
bank holding company will require a vote of the shareholders of the Bank and
any shareholders voting against the plan of reorganization shall be entitled to
the rights and remedies of a dissenting shareholder under Georgia corporate
law.  To the extent the Bank completes a
reorganization prior to the First Filing Deadline or the Effectiveness
Deadline, as the case may be, where the Common Shares are exchanged for
securities of a newly formed holding company of the Bank (“Holding
Company Reorganization”), the obligations of the Bank pursuant to
Sections 4(c), 4(e) and 4(f) shall then become the obligations
of the newly formed holding company of the Bank.

 

(e)                                  First Registration Default;
Reduction of Bonus Compensation.  If the Bank, or any newly formed holding
company of the Bank as a result of a Holding Company Reorganization, has not
filed a Registration Statement with the appropriate federal regulatory agency
by the First Filing Deadline, other than as a result of a delay caused by such
federal regulatory agency being unable to accept such filings on such date
(whereupon the First Filing Deadline will then be the next date such filings
are accepted by the appropriate federal regulatory agency) (a “First Registration Default”),
then for each day that a First Registration Default continues, Joseph W.
Evans, J. Daniel Speight, Jr., and Kim Childers (the “Executives”), shall 

 

18

 

each
forfeit 1.0% of any bonus that would otherwise be payable by the Bank and/or
any newly formed holding company of the Bank as a result of a Holding Company
Reorganization to each Executive for the 2010 fiscal year (or to which he
became entitled as a result of performance during the 2010 fiscal year),
whether under an employment agreement, a bonus plan or any other bonus
arrangement, including any bonus compensation for which payment would otherwise
be deferred until after 2010.  No
bonuses, compensation, awards, equity compensation or other amounts shall be
paid or granted in lieu of or to make such Executive whole for any such
forfeited bonuses.  The total amount
forfeited by each Executive may amount to up to 100% of Executive’s bonus for
the 2010 fiscal year.  The requirements
of this Section 4(e) shall be incorporated into any employment
agreement, bonus plan or other compensation arrangement between the Bank and/or
any newly formed holding company of the Bank as a result of a Holding Company
Reorganization, and each Executive.  The
Bank shall provide each Purchaser with notice in writing of the occurrence of a
First Registration Default within a reasonable period of time after the
occurrence of the First Registration Default.

 

(f)                                    Second Registration and
Effectiveness Default; Special Election Meeting.

 

(i)                                     (A) If the
Bank, or any newly formed holding company of the Bank as a result of a Holding
Company Reorganization, has not filed a Registration Statement with the
appropriate federal regulatory agency by September 15, 2010 ( the “Second Filing Deadline”), other than as a result of a delay
caused by such federal regulatory agency being unable to accept such filings on
such date (whereupon the Second Filing Deadline will then be the next date such
filings are accepted by the appropriate federal regulatory agency) (“Second Registration Default”) or (B) if the
Registration Statement is not declared effective on or prior to the
Effectiveness Deadline by the appropriate federal regulatory agency (“Effectiveness Default”), then upon the occurrence of either
(A) or (B), the President and/or Chief Executive Officer of the Bank, or
the President and/or Chief Executive Officer of any newly formed holding company
of the Bank as a result of a Holding Company Reorganization, shall promptly
call a special meeting of shareholders (the “Special
Election Meeting”) in accordance with the Bylaws of the Bank, or any
newly formed holding company of the Bank as a result of a Holding Company
Reorganization, for the purposes set forth in Section 4(f)(ii).  The Special Election Meeting shall occur as
soon as possible following the date of the Second Registration Default or the Effectiveness
Default, as applicable, but in no event more than sixty (60) days  after such date.  The
Bank shall provide each Purchaser with notice in writing of the occurrence of a
Second Registration Default or an Effectiveness Default within a reasonable
period of time after the occurrence of the Second Registration Default or
Effectiveness Default, as applicable.

 

(ii)                                  The Special
Election Meeting shall be called solely for the purposes of:
(A) considering and voting upon proposals to remove up to a majority  of the then-serving directors of the Bank (whether or not
cause exists), or up to a majority  of the
then-serving  directors of any newly formed
holding company of the Bank as a result of a Holding Company Reorganization
(whether or not cause exists); and (B) electing such number of directors
as there are then vacancies on the Board of Directors of the Bank, or any newly
formed holding company of the Bank as a result of a Holding Company
Reorganization (including any vacancies created by the removal of any director
pursuant to this Section 4(f)(ii)(A)). 
Any removal of directors or appointment of new directors pursuant to
this Section 4(f), subject to applicable regulatory approvals, shall be
effective immediately upon the receipt of the final 

 

19

 

report of the Inspector of Elections for the Special
Election Meeting of the result of the vote on such proposals.  To the extent a Holding Company
Reorganization is completed prior to a Second Registration Default or an
Effectiveness Default, the provisions of this Section 4(f) providing
for removal of directors and appointment of new directors following a Second
Registration Default or an Effectiveness Default, as the case may be, will
apply to the board of directors of such newly formed holding company of the
Bank; provided, however, that subject to any required prior approval from a
Governmental Entity, all the necessary corporate action shall be taken
immediately after the Special Election Meeting to change the directors serving
on the Board of Directors of the Bank to be identical to those directors
serving on the board of directors of the newly formed holding company of the
Bank following the Special Election Meeting.

 

(iii)                               In order for a
proposal to remove up to a majority
of the then-serving directors of the Bank, or the holding company in the
case of a Holding Company Reorganization, as the case may be, to be considered
at the Special Election Meeting, and subject to any applicable regulatory
approvals, shareholders of the applicable entity representing not less than 25%  of
the votes entitled to be cast at the Special Election Meeting must submit a
written notice to the Secretary of the Bank, or the Secretary of any successor
as a result of a Holding Company Reorganization, as the case may be, not later
than 5:00 p.m., Eastern Time, on the 10th day after
delivery of notice to the Purchasers of the Second Registration Default or the
Effectiveness Default, as applicable (“Removal Notice”).  The Removal Notice shall include and shall
specify:

 

(A)                              the name(s) of
the director(s) that such shareholder or shareholders is seeking to remove
from the Board of Directors of the Bank, or the holding company in the
case of a Holding Company Reorganization, as the case may be;

 

(B)                                an affirmative
statement requesting that a proposal be included in the Special Election
Meeting agenda for shareholders to consider and vote upon the removal of
such director(s); and

 

(C)                                as to each
shareholder giving a Removal Notice, an attestation and evidence of the number
of all shares of Common Stock of the Bank, or any newly formed holding company
of the Bank as a result of a Holding Company Reorganization, that are owned by
such shareholder beneficially or of record.

 

(iv)                              All
shareholders that submit a Removal Notice pursuant to Section 4(f)(iii) shall
also timely submit a Nomination Notice (as defined in Section 4(f)(vi))
nominating an equal number of Nominees (as defined in Section 4(f)(v)), to
serve as replacement directors in accordance with Sections 4(f)(v) and
4(f)(vi) hereof.

 

(v)                                 Nominations of
individuals for election to the Board of Directors of the Bank, or  any newly formed holding company of the Bank
as a result of a Holding Company Reorganization, at the Special Election
Meeting may only be made upon receipt by the applicable entity of written
notice of shareholders of such entity entitled to cast, or direct the casting
of, not less than 25% of the votes entitled to be cast at the Special Election
Meeting and containing the information specified by Section 4(f)(vi) hereof.  Each individual whose

 

20

 

nomination is made in accordance with this
Section 4(f)(v) is hereinafter referred to as a “Nominee.”

 

(vi)          For nominations of individuals for election to the Board of
Directors to be properly brought before the Special Election Meeting by a
shareholder or shareholders of the Bank, or the holding company in the case of
a Holding Company Reorganization, as the case may be, a shareholder or
shareholders must have given notice thereof in writing to the Secretary of such
entity not later than 5:00 p.m., Eastern Time, on the 10th day after the date of the Second Registration
Default or the Effectiveness Default, as applicable  (“Nomination Notice”). 
The Nomination Notice shall include and shall specify:

 

(A)          a writing executed by a proposed Nominee that provides his
or her written consent to serve as a director, if elected;

 

(B)           as to each proposed Nominee, the name, age, business
address and residence address of such proposed Nominee, as well as the type of
information relating to such proposed Nominee that would be required in Items
401(a), (d), (e) and (f) and 404(a) of Regulation S-K (or any
successor provisions); and

 

(C)           as to each shareholder giving a Nomination Notice, an
attestation and evidence of the number of all shares of Common Stock of the
Bank, or any newly formed holding company of the Bank as a result of a Holding
Company Reorganization, that are owned by such shareholder beneficially or of
record.

 

(vii)         Not less than ten (10) nor more than fifty (50) days
before the Special Election Meeting, the Secretary of the Bank, or the
Secretary of any newly formed holding company of the Bank as a result of a
Holding Company Reorganization, shall give to each shareholder entitled to vote
at, or to receive notice of, such meeting at such shareholder’s address as it
appears in the share transfer records of such entity, notice in writing setting
forth: (A) the date, time and place of the Special Election Meeting; (B) the
agenda as well as each proposal to be voted upon at the Special Election
Meeting; and (C) the information about each Nominee that was provided in
the Nomination Notice, as well as information in the Removal Notice about any
director for which a proposal has been submitted for removal.

 

(viii)        The Board of Directors of the Bank, or
any newly formed holding company of the Bank as a result of a Holding Company
Reorganization, shall take all necessary action to call the Special Election
Meeting in accordance with the provisions of this Section 4(f), the
Articles of Incorporation and Bylaws of such entity and applicable state
corporate and banking laws.  The
shareholder vote required to approve the removal of directors from the Board of
Directors of the Bank, or any newly formed holding company of the Bank as a
result of a Holding Company Reorganization, shall be the affirmative vote of
shareholders entitled to cast at least a majority of the votes which all
shareholders would be entitled to cast at the Special Election Meeting or such
different vote requirement as may be required under applicable state corporate
and banking laws to the extent that the law is changed after the date
hereof.  The shareholder vote required to
appoint new directors to the Board of Directors of the Bank, or any newly
formed holding company of the Bank as a result of a Holding Company
Reorganization, shall be the affirmative vote of a majority of the total votes
that are represented at the Special 

 

21

 

Election Meeting or such different vote requirement
as may be required under applicable state corporate and banking laws to the
extent that the law is changed after the date hereof.  Only proposals submitted by shareholders
pursuant to this Section 4(f) shall be considered and voted upon at
the Special Election Meeting.

 

(ix)           The Articles of Incorporation and the Bylaws of the Bank
do not, and the governing documents of any newly formed holding company of the
Bank as a result of a Holding Company Reorganization will not, prevent or be
inconsistent with the procedures set forth in this Section 4(f).

 

(x)            The rights of each shareholder of the Bank, or the
holding company in the case of a Holding Company Reorganization, as the case
may be, under this Section 4(f) shall inure to the benefit of any
purchaser or transferee of the Common Shares without the need for an express
assignment or assumption by any such subsequent holders of the Common Shares
after such purchase and/or transfer. 
Subsequent holders of the Common Shares shall have the right to enforce
such agreements directly to the extent it deems such enforcement necessary or
advisable to protect its rights hereunder.

 

(g)           Waiver.  Each of the obligations set forth in (c), (e) and
(f) of this Section 4 may be waived, including by written consent, by
the holders of a majority of the shares of Common Stock issued and outstanding.

 

(h)           Information
for Shareholders and Shareholder Calls. 
Until the Registration Statement is declared effective by the
appropriate federal regulatory agency, and beginning no earlier than
approximately six months after the Closing Date, the Bank shall hold, within a
reasonable time after the financial information contained in the Bank’s
quarterly Call Reports is filed with the FDIC and upon reasonable notice to the
Purchasers and the Bank’s other existing shareholders (either by mail or
e-mail, by posting on the Bank’s website, or by press release), a quarterly
shareholder conference call to discuss such financial information, which call
may, but is not required to, include an opportunity to ask questions of
management with regard to such financial statements.  In addition, if for some reason the
Registration Statement is not filed by the First Filing Deadline or the
requirements for filing a registration statement as set forth in
Section 4(c) are not met, the Bank shall provide the Purchasers with
annual audited financial statements.

 

(i)            Expenses.  Unless otherwise provided in this Agreement,
each of the parties hereto will bear and pay all costs and expenses incurred by
it or on its behalf in connection with the transactions contemplated under this
Agreement, including fees and expenses of its own financial or other
consultants, investment bankers, accountants and counsel.

 

(j)            Right
of First Offer.  Up until, but not
including, an initial public offering by the Bank or until the Bank begins
trading on a national securities exchange and, subject to the terms and
conditions of this Section 4(j) and applicable securities laws, if
the Bank, or any newly formed holding company of the Bank as a result of a
Holding Company Reorganization, proposes to offer or sell any of its equity
securities, as well as rights, options, or warrants to purchase such equity
securities, securities that may become, convertible or exchangeable into or
exercisable for such equity securities or any debt securities (collectively, “New Securities”), the 

 

22

 

Bank,
or any newly formed holding company of the Bank as a result of a Holding
Company Reorganization, shall first offer such New Securities to each
Purchaser, in the amount set forth in Section 4(j)(ii).

 

(i)            Notification of Offer.  The Bank, or any newly formed holding company
of the Bank as a result of a Holding Company Reorganization, shall give notice
(the “Offer Notice”) to each Purchaser,
stating (i) its bona fide intention to offer such New Securities, (ii) the
number of such New Securities to be offered, and (iii) the price and
terms, if any, upon which it proposes to offer such New Securities.

 

(ii)           Election to Exercise.  By notification to the Bank, or any newly
formed holding company of the Bank as a result of a Holding Company
Reorganization, within 10 calendar days after the Offer Notice is given (the “Acceptance Period”), each Purchaser may elect to purchase or
otherwise acquire, at the price and on the terms specified in the Offer Notice,
up to that portion of such New Securities which equals the proportion that the
Common Stock issued and held by such Purchaser bears to the total number of
shares of Common Stock of the Bank, or any newly formed holding company of the
Bank as a result of a Holding Company Reorganization, outstanding on the date
of the Offer Notice.  The closing of any
sale pursuant to this Section 4(j) shall occur within the later of 90 days of (i) the date that the Offer
Notice is given, or (ii) the date of the initial sale of New Securities
pursuant to Section 4(j)(iii).

 

(iii)          Sale of Unsubscribed Portion.  If all New Securities referred to in the
Offer Notice are not elected to be purchased or acquired within the Acceptance
Period as provided in Section 4(j)(ii), the Bank, or any newly formed
holding company of the Bank as a result of a Holding Company Reorganization,
may, during the 90 day period following the expiration of the Acceptance
Period, offer and sell the remaining unsubscribed portion of such New
Securities to any Person or Persons at a price not less than that specified in
the Offer Notice.  If the Bank, or any
newly formed holding company of the Bank as a result of a Holding Company
Reorganization, does not enter into an agreement for the sale of the New
Securities within such period, or if such agreement is not consummated within
30 days of the execution thereof, the right provided hereunder shall be deemed
to be revived and such New Securities shall not be offered unless first
reoffered to the Purchasers in accordance with this Section 4(j).

 

(iv)          Exclusions.  The
provisions of Section 4(j) shall not apply to (i) any issuance of securities upon the
conversion of any warrant, option, or other convertible security outstanding as
of the time of the Closing Date, (ii) any offer and sale of New Securities
in a registered public offering, (iii) up to 850,000 shares of Common
Stock to parties not purchasing in this Offering at a price not less than the
Purchase Price for a period of six months following the Closing Date, or (iv) shares
(or options to purchase shares) issued or issuable to employees or directors
of, or consultants to, the Bank, or any newly formed holding company of the
Bank as a result of a Holding Company Reorganization, pursuant to any equity
incentive plan approved by the Board of Directors.

 

(k)           Delivery
of Final Bids.  The Bank shall have
posted to its electronic data room on or before July 14, 2009, a summary
of the aggregate final bids to be submitted by the Bank to the FDIC for the
Proposed Acquisition (“Final Bid Summary”),
which will be an accurate and complete summary of the aggregate final bids, and
such final bids submitted to the 

 

23

 

FDIC
will not deviate in any material respect from the information contained in the
Final Bid Summary.

 

5.                                       TRANSFER AGENT
INSTRUCTIONS.

 

(a)           Transfer
Agent Instructions.  Subject to the
provisions of Section 2(a), no instruction will be given by the Bank to
its transfer agent restricting the transfer of the Common Shares, and the
Common Shares shall be freely transferable on the books and records of the
Bank.  If a Purchaser effects a sale,
assignment or transfer of the Common Shares, the Bank shall, in accordance with
applicable securities laws, permit the transfer and shall promptly instruct its
transfer agent to issue one or more certificates in such name and in such
denominations as specified by such Purchaser to effect such sale, transfer or
assignment.

 

6.                                       CONDITIONS TO
THE BANK’S OBLIGATION TO SELL.

 

The
obligation of the Bank hereunder to issue and sell the Common Shares to each
Purchaser at the Closing is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, provided that these
conditions are for the Bank’s sole benefit and may be waived by the Bank at any
time in its sole discretion by providing each Purchaser with prior written
notice thereof:

 

(a)           Each
Purchaser shall have duly executed each of the Transaction Documents to which
it is a party and delivered the same to the Bank.

 

(b)           Each
Purchaser shall have duly executed a fully completed Book Entry and Wire
Information Questionnaire and Accredited Investor Questionnaire in the forms
attached hereto as Appendix I and Appendix II, respectively.

 

(c)           The
FDIC shall have accepted the Bank’s bid to acquire the Target Banks and, with
respect to the Target Banks, shall have entered into the P&A Agreement with
the Bank.

 

(d)           The
Escrow Agent shall have delivered to the Bank the Purchase Price for the Common
Shares being purchased by each of the Purchasers at the Closing, as indicated
below such Purchaser’s name on the signature page of this Agreement, by
wire transfer of immediately available funds pursuant to the wire instructions
provided by the Bank.

 

(e)           The
representations and warranties of each Purchaser contained in Section 2 of
this Agreement shall be true and correct in all material respects (except for
those representations and warranties that are qualified by materiality or Bank
Material Adverse Effect, which shall be true and correct in all respects) as of
the date when made and as of the Closing Date as though made at that time
(except for representations and warranties that speak as of a specific date,
which shall be true and correct as of such specified date), and each Purchaser
shall have performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by the Transaction Documents to
be performed, satisfied or complied with by each Purchaser at or prior to the
Closing Date.

 

24

 

7.                                       CONDITIONS TO
EACH PURCHASER’S OBLIGATION TO PURCHASE.

 

The
obligation of each Purchaser to purchase the Common Shares at the Closing is
subject to the satisfaction, at or before the Closing Date, of each of the
following conditions, provided that these conditions are for each Purchaser’s
sole benefit and may be waived by such Purchaser at any time in its sole
discretion by providing the Bank with prior written notice thereof:

 

(a)           The
Bank shall have duly executed and delivered to such Purchaser each of the
Transaction Documents.

 

(b)           Such
Purchaser shall have received an opinion of Dinur and DeLuca, LLP, counsel for
the Bank, dated the Closing Date, in substantially the form of Exhibit B
attached hereto.

 

(c)           The
Bank shall have delivered to such Purchaser a certificate evidencing the
incorporation and good standing of the Bank as of a date within ten business
days before the Closing Date.

 

(d)           The
Bank shall have delivered to such Purchaser a certificate, executed by the
Secretary of the Bank and dated as of the Closing Date, as to (i) the
resolutions consistent with Section 3(b) as adopted by the Bank’s
Board of Directors, (ii) the Articles of Incorporation of the Bank and
(iii) the Bylaws of the Bank, each as in effect at the Closing, in the
form attached hereto as Exhibit C.

 

(e)           The
representations and warranties of the Bank contained in Section 3 of this
Agreement shall be true and correct in all material respects (except for those
representations and warranties that are qualified by materiality or Bank
Material Adverse Effect, which shall be true and correct in all respects) as of
the Signing Date and as of the Closing Date as though made at that time (except
for representations and warranties that speak as of a specific date, which
shall be true and correct as of such specified date), and the Bank shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by the Transaction Documents and the P&A
Agreement (and by the FDIC and Georgia Department of Banking and Finance, if
any)  to be performed, satisfied or
complied with by the Bank at or prior to the Closing Date.  Such Purchaser shall have received a
certificate, executed by the Senior Vice President of the Bank, dated as of the
Closing Date, to the foregoing effect in the form attached hereto as Exhibit D.

 

(f)            The
Bank shall have obtained any third party consents and approvals, if any,
necessary for the completion of the Proposed Acquisition.

 

(g)           The
Bank shall have delivered or cause to have delivered to each Purchaser the
number of the Common Shares indicated below such Purchaser’s name on the
signature page to this Agreement, subject to the conditions set forth in
Section 1(a), registered in the name of such Purchaser.

 

(h)           The
Bank shall have raised an aggregate amount of at least $284,550,000 in the
Offering, and the FDIC shall have accepted the Bank’s bid to acquire the Target
Banks, as 

 

25

 

demonstrated
by the FDIC’s adoption of a resolution to enter into the P&A Agreement (to
the extent legally required by FDIC laws and regulations), on terms not less favorable
to the Bank, the Purchasers or its shareholders than set forth in the Final Bid
Summary, and, with respect to the Target Banks, shall have entered into the
P&A Agreement with the Bank.

 

(i)            The
Bank shall have: (i) entered into the employment agreements with the
proposed new management team and (ii) delivered or cause to have delivered
the Common Stock and warrants to the proposed new management team as set forth
in their amended and restated subscription agreements, dated April 1,
2009, with the Bank.

 

(j)            The
Bank shall have delivered to such Purchaser such other documents relating to
the purchase and sale of the Common Shares contemplated by this Agreement as
such Purchaser or its counsel may reasonably request.

 

8.             TERMINATION.  In the event that the Closing shall not have
occurred with respect to a Purchaser on or before July 31, 2009 for any
reason, including but not limited to the Bank’s or such Purchaser’s failure to
satisfy the conditions set forth in Sections 6 and 7 above (and the nonbreaching
party’s failure to waive such unsatisfied condition(s)), the nonbreaching party
shall have the option to terminate this Agreement with respect to such
breaching party at the close of business on such date without liability of any
party to any other party; provided, however,
that in addition to the foregoing, if the Bank does not win its bid submitted
to the FDIC to acquire the assets and liabilities of the Target Banks, and the
Proposed Acquisition is not completed, then the Bank will immediately terminate
the offering of the Common Shares and take all such action necessary, including
providing specific instructions to the Escrow Agent no later than one business
day after the bid rejection, to return each Purchaser’s full investment,
without interest, in accordance with the Escrow Agreement without liability of
any party to any other party.

 

9.                                       MISCELLANEOUS.

 

(a)           Governing
Law; Jurisdiction; Jury Trial.  All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law provision
or rule (whether of the State of New York or any other jurisdictions) that
would cause the application of the laws of any jurisdictions other than the
State of New York.  Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in New York, of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is brought in an inconvenient forum
or that the venue of such suit, action or proceeding is improper.  Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner permitted by law.

 

26

 

(b)           Counterparts.  This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a
facsimile signature shall be considered due execution and shall be binding upon
the signatory thereto with the same force and effect as if the signature were
an original, not a facsimile signature.

 

(c)           Headings.  The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.

 

(d)           Severability.  If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.

 

(e)           Entire
Agreement; Amendments.  This
Agreement and the other Transaction Documents, together with the Appendixes and
Exhibits thereto, supersede all other prior oral or written agreements between
the Purchasers, the Bank, their affiliates and Persons acting on their behalf
with respect to the matters discussed herein, and this Agreement, the other
Transaction Documents and the instruments referenced herein and therein contain
the entire understanding of the parties with respect to the matters covered
herein and therein and, except as specifically set forth herein or therein,
neither the Bank nor any Purchaser makes any representation, warranty, covenant
or undertaking with respect to such matters. 
No amendment to this Agreement may limit the right of a Purchaser to
waive any provision which they have the right to waive, and no provision of
this Agreement may be amended other than by an instrument in writing signed by
the Bank and the Purchasers listed on the signature pages hereto as being
obligated to purchase at least 66-2/3%  of the amount
of the Common Shares to be sold hereunder; provided that no such amendment to
this Agreement that would disproportionately impact a Purchaser may be made
without the consent of such Purchaser; and provided further that no amendment
to Section 2, Section 4(k), Section 7 or Section 8 may be
made without the express written consent of each Purchaser.  No provision hereof may be waived other than
by an instrument in writing signed by the party against whom enforcement is
sought.  No consideration shall be
offered or paid to any Person to amend or consent to a waiver or modification
of any provision of any of the Transaction Documents unless the same
consideration also is offered to all of the parties to the Transaction
Documents.  The Bank has not, directly or
indirectly, made any agreements with any Purchasers relating to the terms or
conditions of the transactions contemplated by the Transaction Documents,
except as set forth in the Transaction Documents, nor has any other agreement
or arrangement been made by the Bank with any other Purchaser outside of the
Transaction Documents.  Without limiting
the foregoing, the Bank confirms that, except as set forth in this Agreement,
no Purchaser has made any commitment or promise or has any other obligation to
provide any financing to the Bank or otherwise.

 

(f)            Notices.  Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered:  (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one Business Day after
deposit with an 

 

27

 

overnight
courier service, in each case properly addressed to the party to receive the
same.  The addresses and facsimile numbers
for such communications shall be:

 

If
to the Bank:

 

STATE
BANK AND TRUST COMPANY

321 Fullington Avenue  
 Pinehurst, Georgia  31070

Telephone:            (478)
627-3970

Facsimile:             (478)
627-3971

Attention:              Marvin
Ragan, Senior Vice President

 

with
a copy (for informational purposes only) to:

 

NELSON
MULLINS RILEY & SCARBOROUGH, LLP

Atlantic
Station

201
17th Street, Suite 1700

Atlanta,
Georgia  30363

Telephone:            (404) 322-6218

Facsimile:             (404)
817-6041

Attention:              J. Brennan Ryan, Esq.

 

and

 

DINUR
AND DELUCA, LLP

One
Lakeside Commons

990
Hammond Drive, Suite 760

Atlanta,
Georgia  30328

Telephone:            (770) 395-3170

Facsimile:             (770)
395-3171

Attention:              Daniel D. Dinur

 

If
to a Purchaser, to its address and facsimile number set forth under such
Purchaser’s name on the signature page hereto, with copies to such
Purchaser’s representative as set forth under such Purchaser’s name on the
signature page hereto, or to such other address and/or facsimile number
and/or to the attention of such other Person as the recipient party has
specified by written notice given to each other party five days prior to the
effectiveness of such change.  Written
confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender’s facsimile machine containing the time, date,
recipient facsimile number and an image of the first page of such
transmission or (C) provided by an overnight courier service, shall be
rebuttable evidence of personal service, receipt by facsimile or receipt from
an overnight courier service in accordance with clause (A), (B) or (C) above,
respectively.

 

(g)           Successors
and Assigns.  This Agreement shall be
binding upon and inure to the benefit of the parties and their respective successors
and assigns, including any purchasers of the Common Shares.  The Bank shall not assign this Agreement or
any rights or obligations hereunder without the prior written consent of the
holders of at least two-thirds of the aggregate 

 

28

 

number
of Common Shares issued hereunder.  A
Purchaser may assign some or all of its rights hereunder without the consent of
the Bank if in compliance with this Agreement and applicable law, in which
event such assignee shall be deemed to be a Purchaser hereunder with respect to
such assigned rights and shall be bound by the terms and conditions of this
Agreement that apply to “Purchasers.”

 

(h)           No
Third Party Beneficiaries.  Except as
expressly set forth herein, this Agreement is intended for the benefit of the
parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.

 

(i)            Survival.  Unless this Agreement is terminated under
Section 8, all representations and warranties of the Purchasers and the
Bank contained in Sections 2 and 3, and the agreements and covenants set forth
in Sections 4, 5 and 9 shall survive the Closing.  Each Purchaser shall be responsible only for
its own representations, warranties, agreements and covenants hereunder.

 

(j)            Further
Assurances.  Each party shall do and
perform, or cause to be done and performed, all such further acts and things,
and shall execute and deliver all such other agreements, certificates,
instruments and documents, as any other party may reasonably request in order
to carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.

 

(k)           Indemnification.  In consideration of each Purchaser’s
execution and delivery of the Transaction Documents and acquiring the Common
Shares thereunder, and in addition to all of the Bank’s other obligations under
the Transaction Documents, the Bank shall defend, protect, indemnify and hold
harmless each Purchaser and each other holder of the Common Shares and all of
their shareholders, partners, members, officers, directors, employees and
direct or indirect investors and any of the foregoing Persons’ agents or other
representatives (collectively, the “Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities and damages, and expenses in connection
therewith (irrespective of whether any such Indemnitee is a party to the action
for which indemnification hereunder is sought), and including reasonable
attorneys’ fees and disbursements incurred by any Indemnitee as a result of, or
arising out of, or relating to any misrepresentation or breach of any
representation, warranty, covenant or agreement of the Bank contained in the
Transaction Documents.

 

(l)            No
Strict Construction.  The language
used in this Agreement will be deemed to be the language chosen by the parties
to express their mutual intent, and no rules of strict construction will
be applied against any party.

 

(m)          Rescission
and Withdrawal Right. 
Notwithstanding anything to the contrary contained in (and without
limiting any similar provisions of) the Transaction Documents, whenever any
Purchaser exercises a right, election, demand or option under a Transaction
Document and the Bank does not timely perform its related obligations within
the periods therein provided, then such Purchaser may rescind or withdraw, in
its sole discretion 

 

29

 

from
time to time upon written notice to the Bank, any relevant notice, demand or
election in whole or in part without prejudice to its future actions and rights

 

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

 

(o)           Independent
Nature of Purchasers’ Obligations and Rights.  The obligations of each Purchaser under any
Transaction Document are several and not joint with the obligations of any
other Purchaser, and no Purchaser shall be responsible in any way for the
performance of the obligations of any other Purchaser under any Transaction
Document.  The decision of each Purchaser
(other than those Purchasers that are affiliates of each other) to purchase the
Common Shares pursuant to the Transaction Documents has been made by such
Purchaser independently of any other non-affiliated Purchaser and independently
of any information, materials, statements or opinions as to the business,
affairs, operations, assets, properties, liabilities, results of operations,
condition (financial or otherwise) or prospects of the Bank, which may have
been made or given by any other non-affiliated Purchaser or by any agent or
employee of any other non-affiliated Purchaser, and no Purchaser and any of its
agents or employees shall have any liability to any other Purchaser (or any
other Person) relating to or arising from any such information, materials,
statement or opinions.  Nothing contained
herein or in any other Transaction Document, and no action taken by any
Purchaser pursuant hereto or thereto, shall be deemed to constitute the
Purchasers as a partnership, an association, a joint venture or any other kind
of entity, or create a presumption that the Purchasers are in any way acting in
concert or as a group, and the Bank will not assert any such claim with respect
to such obligations or the transactions contemplated by the Transaction
Documents.  Each Purchaser (other than
those Purchasers that are affiliates of each other) confirms that it has
independently participated in the negotiation of the transaction contemplated
hereby with the advice of its own counsel and advisors and no other
non-affiliated Purchaser has acted as agent for such Purchaser in connection
with making its investment hereunder and that no non-affiliated Purchaser will
be acting as agent of such Purchaser (and its affiliates) in connection with
monitoring its investment in the Common Shares or enforcing its rights under
the Transaction Documents.  Each
Purchaser shall be entitled to independently protect and enforce its rights,
including, without limitation, the rights arising out of this Agreement or out
of any other Transaction Documents, and it shall not be necessary for any other
Purchaser to be joined as an additional party in any proceeding for such
purpose.

 

(p)           Publicity.  Except as may be required by applicable law,
neither the Bank nor any representative of the Bank (including the Placement
Agent) will issue any press release or public statement that identifies any
Purchaser or any investment advisor to a Purchaser, or 

 

30

 

otherwise
makes any public statement with respect to any Purchaser or any investment
advisor to a Purchaser hereby without the prior written consent of such
Purchaser.  Any such press release or
public statement required by applicable law shall only be made by the Bank
after reasonable notice and opportunity for review by the Purchasers.

 

[Signatures appear on the
following pages.]

 

31

 

 

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

 

	
   

  	
  STATE
  BANK AND TRUST COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Marvin Ragan

  
	
   

  	
   

  	
  Marvin
  Ragan

  
	
   

  	
   

  	
  Senior
  Vice President

  

 

 

[Remainder of page intentionally
left blank.]

 

 

[Signature pages for
Purchasers appear on the following pages.]

 

 

Bank Signature Page to Agreement

 

 

	
   

  	
  NAME OF PURCHASER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Contact
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  E-mail:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Number
  of Common Shares:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Purchase
  Price Per Share: $10.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Aggregate
  Purchase Price: $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Tax
  ID No.:

  	
   

  
														

 

	
  Legal
  Representative Address:

  	
   

  
	
   

  	
   

  
	
  Attn:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
  Telephone:

  	
   

  	
   

  
	
  Facsimile:

  	
   

  	
   

  
	
  E-mail:

  	
   

  	
   

  

 

Purchaser Signature Page to Agreement

 

 

SUMMARY INSTRUCTION SHEET FOR PURCHASER

 

(To be read in conjunction with the entire

preceding Agreement)

 

A.                                 Complete the
following items on the Agreement:

 

1.                                       Signature
page:  Provide the information requested
on the signature page.

 

2.                                       Provide the
information requested in the Book Entry and Wire Information Questionnaire
attached hereto as Appendix I, including wire instructions for the return of
funds if the Agreement is terminated pursuant to Section 8.

 

3.                                       Provide the information
requested by the Accredited Investor Questionnaire attached hereto as Appendix
II.

 

B.                                   Please e-mail
to dfarrell@fbr.com or fax to (703) 469-1131 the properly completed and signed
Agreement, including the properly completed Appendix I and Appendix II.  Please send the originals to:

 

FBR
Capital Markets & Co.

1001
Nineteenth Street North

Arlington,
Virginia  22209

 

Attention:  Dawn Farrell

 

C.                                   Instructions
regarding the transfer of funds for the purchase of Common Shares will be sent
by facsimile to the Purchaser by the Placement Agent at a later date.

 

Summary Instruction
Sheet for Purchaser

 

 

APPENDIX I

 

STATE BANK AND TRUST COMPANY

BOOK ENTRY AND WIRE INFORMATION QUESTIONNAIRE

 

Please
provide us with the following information:

 

	
  A. DTC INFORMATION:

  
	
   

  
	
  Name
  of DTC Participant:

  
	
   

  
	
   

  
	
  Participant’s
  DTC Account Number:

  
	
   

  
	
   

  
	
  Investor’s
  Account Number with Participant:

  
	
   

  

 

 

Provide
the following information for regarding the Contact Person at DTC Participant:

 

	
  Name:

  	
   

  
	
   

  	
   

  
	
  Address

  	
   

  
	
   

  	
   

  
	
  Telephone
  Number:

  	
   

  
	
   

  	
   

  
	
  Fax
  Number:

  	
   

  
	
   

  	
   

  
	
  E-mail:

  	
   

  

 

 

B.  RETURN WIRE INSTRUCTION INFORMATION:

 

Purchaser’s
wire instructions for return of funds invested if the Stock Purchase Agreement
is terminated pursuant to Section 8 is as follows:

 

	
  Bank
  Name:

  	
   

  
	
   

  	
   

  
	
  Bank
  Address

  	
   

  
	
   

  	
   

  
	
  Account
  Number:

  	
   

  
	
   

  	
   

  
	
  ABA
  Number:

  	
   

  

 

 

APPENDIX II

 

STATE BANK AND TRUST COMPANY

ACCREDITED INVESTOR QUESTIONNAIRE

 

Note to Purchasers:

 

For Corporations,
Partnerships, Trusts, Foundations, Joint Purchasers (other than married
couples) and Other Entities, please provide the information requested by Appendix II-1.

 

For
Individuals (including married couples), please provide the information
requested by Appendix II-2.

 

 

APPENDIX II-1

 

Accredited
Investor Questionnaire

for

Corporations, Partnerships, Trusts, Foundations, 

Joint Purchasers (other than married couples) and Other Entities

 

If
the undersigned is a corporation, partnership, trust, pension plan, foundation,
joint purchaser (other than a married couple) or other entity, an authorized
officer, partner, or trustee must complete, date and sign this Certificate.

 

Capitalized
terms not defined herein have the meaning ascribed to them in the Stock
Purchase Agreement.

 

CERTIFICATE

 

The
undersigned certifies that the representations and responses below are true and
accurate:

 

(a)                                  The undersigned has been
duly formed and is validly existing and has full power and authority to invest
in the Bank. The person signing on behalf of the undersigned has the authority
to execute and deliver the Stock Purchase Agreement on behalf of the
undersigned and to take other actions with respect thereto.

 

(b)                                 Indicate the
form of entity of the undersigned:

 

o                                    Limited
Partnership

o                                    General Partnership

o                                    Corporation

o                                    Revocable Trust
(identify each grantor and indicate under what circumstances the trust is
revocable by the grantor):

 

	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Continue
  on a separate piece of paper, if necessary.)

  

 

o                                    Other Type of
Trust (indicate type of trust and, for trusts other than pension trusts, name
the grantors and beneficiaries):

 

	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Continue
  on a separate piece of paper, if necessary.)

  

 

1

 

o                                    Other form of
organization (indicate form of organization):

	
   

  

 

(c)                                  Indicate the approximate
date the undersigned entity was formed:

 

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

 

o (1)                  A bank as defined in
Section 3(a)(2) of the 1933 Act, or any savings and loan association
or other institution pursuant to Section 3(a)(5)(A) of the 1933 Act
whether acting in its individual or fiduciary capacity;

 

o (2)                  A broker or dealer
registered pursuant to Section 15 of the Securities Exchange Act of 1934;

 

o (3)                  An insurance company as
defined in Section 2(13) of the 1933 Act;

 

o (4)                  An investment company
registered under the Investment Company Act of 1940 or a business development
company as defined in Section 2(a)(48) of that act;

 

o (5)                  A Small Business Investment
Company licensed by the U.S. Small Business Administration under Section 301(c) or
(d) of the Small Business Investment Act of 1958;

 

o (6)                  A plan established and
maintained by a state, its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions, for the benefit of
its employees, if such plan has total assets in excess of $5,000,000;

 

o (7)                  An employee benefit plan
within the meaning of the Employee Retirement Income Security Act of 1974, if
the investment decision is made by a plan fiduciary, as defined in
Section 3(21) of such act, which is either a bank, savings and loan
association, insurance company, or registered investment adviser, or if the
employee benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, with investment decisions made solely by persons that are
accredited investors;

 

o (8)                  A business development
company as defined in Section 202(a)(22) of the Investment Advisers Act of
1940;

 

o (9)                  An organization described in
Section 501(c)(3) of the Internal Revenue Code, a corporation,
Massachusetts or similar business trust, or partnership, 

 

2

 

not formed for the specific
purpose of acquiring the Common Shares, with total assets in excess of
$5,000,000;

 

o (10)            A trust, with total assets
in excess of $5,000,000, not formed for the specific purpose of acquiring the
Common Shares, whose purchase is directed by a sophisticated person who has
such knowledge and experience in financial and business matters that such
person is capable of evaluating the merits and risks of investing in the Bank;

 

o (11)            An entity in which all of
the equity owners qualify under any of the above subparagraphs. If the
undersigned belongs to this investor category only, list the equity owners of
the undersigned, and the investor category which each such equity owner
satisfies:

 

	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Continue
  on a separate piece of paper, if necessary.)

  

 

 

	
  Dated:
                                    ,
  2009

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name
  of Purchaser:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
  An
  Authorized Officer, Partner or Trustee

  
				

 

3

 

APPENDIX II-2

 

Accredited Investor Questionnaire

for

Individuals (including married couples)

 

If
the undersigned is an Individual (or married couple), the undersigned must
complete, date and sign this Certificate.

 

CERTIFICATE

 

I
certify that the representations and responses below are true and accurate:

 

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

 

o                                    (1)                              A natural
person whose individual net worth, or joint net worth with that person’s
spouse, at the time of his or her purchase exceeds $1,000,000;

 

o                                    (2)                              A natural
person who had an individual income in excess of $200,000 in each of the two
most recent years, or joint income with that person’s spouse in excess of
$300,000, in each of those years, and has a reasonable expectation of reaching
the same income level in the current year;

 

o                                    (3)                                  An executive
officer or director of the Bank.

 

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

 

	
   

  
	
   

  
	
   

  
	
   

  
	
   

  

 

 

	
  Dated:
                                       ,
  2009

  	
   

  
	
   

  	
   

  
	
  Name(s) of
  Purchaser:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  
	
   

  	
  (If
  joint ownership, both individuals must execute this

  	
   

  
	
   

  	
  Certificate.)

  	
   

  
				

 

1

 

EXHIBITS

 

	
  Exhibit A

  	
  Risk
  Factors

  
	
  Exhibit B

  	
  Form of
  Counsel Opinion for the Bank

  
	
  Exhibit C

  	
  Form of
  Secretary’s Certificate

  
	
  Exhibit D

  	
  Form of
  Officer’s Certificate

  

 

 

EXHIBIT A

 

RISK FACTORS

 

There are many risks and uncertainties related to the Bank’s business
and operations and an investment in the Common Shares.  Before making an investment decision, the
Purchaser should read carefully and consider the risk factors below relating to
the Bank and this offering of the Common Shares.  The Purchaser should carefully consider the
risks and uncertainties described below together with all other information
provided with regard to evaluating the offering of the Common Shares and the
Proposed Acquisition, including, but not limited to, the Offering Summary.  The risks and uncertainties described below
are not the only ones the Bank faces. 
Additional risks and uncertainties not presently known to the Bank or
that may be deemed currently immaterial also may adversely affect the Bank’s
business, financial condition and operations. 
Any of the following risks could negatively affect its business,
financial condition and results of operations.

 

The risks discussed below also include forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995, and
actual results may differ substantially from those discussed.  Such projections and information are based on
assumptions about future events that are inherently uncertain and subjective,
and they may change.  No representation
or warranty is made about whether projected events or results will occur or
will be obtained.

 

The future results of the Bank could be affected by subsequent events
and could differ materially from those expressed in forward-looking
statements.  If future events and actual
performance differ from the Bank’s assumptions, the actual results could vary
significantly from the performance projected in the forward-looking statements.
 The Bank cautions readers not to place
undue reliance on any forward-looking statements.

 

Risks
Specifically Related to the Bank’s Proposed Acquisition

 

The Bank’s current opportunity to acquire the Target Banks from the
FDIC may present challenges, and the Bank may incur unanticipated losses
related to the assets and liabilities of such financial institutions.

 

The
Bank is evaluating an opportunity to acquire the Target Banks from the
FDIC.  It will use the proceeds of this
offering to acquire the assets and liabilities of certain Target Banks that are
in receivership through the FDIC bid process for failed institutions.  Such an acquisition will require the Bank to
enter into the P&A Agreement with the FDIC. 
The P&A Agreement is a form document prepared by the FDIC, and the
ability to negotiate the terms of this agreement is limited or
non-existent.  As a result, the P&A
Agreement provides for limited disclosure about, and limited indemnification
for, risks associated with, the Target Banks and is only that which is provided
for by the FDIC.  There is a risk that
such disclosure regarding, and indemnification for, the Target Banks will not
be sufficient and the Bank will incur unanticipated losses.

 

A-1

 

The success of the Proposed Acquisition
will depend on the Bank’s ability to successfully combine the Target Banks’
business with the Bank’s business, and, if the Bank experiences difficulties
with the integration process, the anticipated benefits of the acquisition may
not be realized fully or at all or may take longer to realize than expected.

 

The
success of the Proposed Acquisition will depend, in part, on the Bank’s ability
to successfully combine the Target Banks’ business with the Bank’s
business.  As with any acquisition
involving financial institutions, there may be business disruptions that result
in the loss of customers or cause customers to remove their accounts and move
their business to competing financial institutions.  It is possible that the integration process
could result in the disruption of ongoing business or inconsistencies in
standards, controls, procedures and policies that adversely affect the Bank’s
ability to maintain relationships with clients, customers, depositors and
employees or to achieve the anticipated benefits of the acquisition.  Integration efforts, including integration of
the Target Banks’ systems into the Bank’s current systems, will also divert the
Bank’s management’s attention and resources. 
If the Bank experiences difficulties with the integration process, the
anticipated benefits of the acquisition may not be realized fully or at all or
may take longer to realize than expected.

 

The Bank has made certain assumptions regarding the potential losses it
will incur in connection with its acquisition of the assets and liabilities of
the Target Banks from the FDIC; if these assumptions are inaccurate, or if the
loss share provisions provided for in the P&A agreement are administered
improperly or, in the future, the FDIC interprets such provisions in a way
different from what the Bank anticipates, then the Bank’s losses could
increase.

 

The
Bank is seeking to acquire the assets and liabilities of certain Target Banks
that are in receivership through the FDIC bid process for failed
institutions.  In conjunction with the
acquisitions, the Bank will be discounting portions of the acquired loan
portfolios based on its estimates of remaining credit losses related to
credit-impaired loans.  In addition, the
Bank will enter into a loss sharing agreement with the FDIC, pursuant to which
the FDIC will retain 80% of the loan losses incurred in connection with the
Target Banks’ loans, up to an agreed upon maximum threshold amount of aggregate
losses, and will assume 95% of any additional loan losses above such threshold
amount.  Through the loss sharing
arrangement, the FDIC absorbs a significant portion of the loss from the Target
Banks’ asset portfolios, and the asset management and disposition incentives of
the Bank and the FDIC become more aligned as both parties are sharing in the
loss.  If the loss share provisions
provided for in the loss sharing agreement are administered improperly or, in
the future, the FDIC interprets such provisions in a way different from what
the Bank anticipates, then the Bank’s losses could increase.

 

The
Bank will establish its bid to the FDIC for the Target Banks to cover its
anticipated losses, as shown in “Preliminary Bid Calculations,” on page 17
of the Offering Summary.  However, there
is no assurance that loans the Bank will acquire will not further deteriorate
in value, below the Bank’s estimates, such estimates being reflected in the
“Management Loss Assumption Analysis of Target Bank Loans,” set forth on
page 16 of the Offering Summary.  As
a result, if the Bank is required to take additional markdowns on the acquired
loan portfolios or on the other assets it acquires, the Bank will incur its pro
rata portion of additional losses under the loss sharing agreement, which could
materially and adversely affect its business, financial 

 

A-2

 

condition
and results of operations and which could cause a material negative deviation
from the results projected in “Model Summary,” on page 18 of the Offering
Summary (the “Model Summary”).

 

The Bank’s success is dependent upon the new management team, which may
be unable to successfully implement their proposed business strategy.

 

The
Bank’s success is expected to be largely dependent upon its proposed new
management team consisting of Joseph W. Evans, who will serve as the
Bank’s Chairman and Chief Executive Officer, J. Daniel Speight, who will
serve as the Bank’s Vice Chairman, Chief Operating Officer and Chief Financial
Officer, and Kim Michael Childers, who will serve as the Bank’s President
and Chief Credit Officer.  The proposed
new management team intends to adopt a traditional, community-focused
commercial banking strategy.  See “State Bank and Trust Company Plan for Target Bank,” on
page 11 of the Offering Summary.  In
order to execute this new business strategy, the new management team will need
to, among other things:

 

·                  attract
sufficient retail and commercial deposits;

 

·                  attract
and maintain business banking relationships with businesses in the Bank’s
market area;

 

·                  attract
and retain experienced commercial and community bankers;

 

·                  identify
and pursue suitable opportunities for opening new branches in the Bank’s market
area;

 

·                  maintain
adequate regulatory capital and comply with applicable federal and state
regulations;

 

·                  attract
sufficient loans, including correspondent and purchased loans that meet prudent
credit standards; and

 

·                  maintain
expenses in line with their current projections.

 

Failure
to achieve these strategic goals could adversely affect the Bank’s ability to
successfully implement the new management team’s business strategies, as well
as the Bank’s business, financial condition and results of operations, and,
therefore, could cause a material negative deviation from the results projected
in the Model Summary.

 

No assurance can be made that the Bank’s proposed new management team’s
strategies for the enhancement of shareholder value will be accomplished or
that other strategies may be undertaken.

 

The
Bank’s proposed new management team contemplates taking certain actions after
completion of this offering in order to enhance shareholder value, including
closing various branches, opening a new branch in Atlanta, consolidating
operation centers, reviewing personnel, assembling a team for correspondent
banking and purchasing performing loans from the FDIC and others, beginning a
special asset division, strategically repricing deposits, and continuing to
review FDIC assisted deals on a whole bank and deposit only basis.  There is no assurance that 

 

A-3

 

any
or all of the actions discussed above will be accomplished, that other such
strategies will be undertaken, or that enhanced shareholder value will be
realized.

 

Risks
Generally Related to the Bank’s Future Business

 

Recent negative developments in the financial industry and the current
economic environment pose significant challenges for the Bank and its industry
and could adversely affect the Bank’s business, financial condition and results
of operations.

 

The
Bank is, and will be, operating in a challenging and uncertain economic
environment, including generally uncertain national and local conditions.  Negative developments in the global credit
and securitization markets during 2008 have resulted in uncertainty in the
financial markets in general, with the expectation of the general economic
downturn continuing in 2009. As a result of this “credit crunch,” commercial as
well as consumer loan portfolio performances have deteriorated at many
institutions and the competition for deposits and quality loans has increased
significantly.  Global securities
markets, and bank holding company stock prices in particular, have been
negatively affected, as has the ability of banks and bank holding companies to
raise capital or borrow in the debt markets.

 

Financial
institutions like the Bank have been, and may continue to be, affected by sharp
declines in the real estate market, including falling home prices and
increasing delinquencies, foreclosures and increased unemployment.  Concerns over the stability of the financial
markets and the economy have resulted in decreased lending by financial
institutions to their customers and to each other with such concerns leading to
increased commercial and consumer deficiencies, lack of customer confidence,
increased market volatility and widespread reduction in general business activity.  The Bank does not expect these difficult
conditions to improve in the near future. 
A worsening of these conditions would likely exacerbate the adverse
effects on the Bank.

 

As
a result, the Bank may face the following risks:

 

·                  Economic
conditions that negatively affect housing prices and the job market may
continue to cause the credit quality of the Bank’s loan portfolios to
deteriorate;

 

·                  Market
developments that affect consumer confidence may cause adverse changes in
payment patterns by the Bank’s customers, causing increases in delinquencies
and default rates on loans and other credit facilities;

 

·                  The
processes that the Bank uses to estimate its allowance for loan losses and
reserves may no longer be reliable because they rely on judgments such as
forecasts of economic conditions, that may no longer be capable of accurate
estimation;

 

·                  The
value of the Bank’s securities portfolio may decline; and

 

·                  The
Bank may face increased regulation of its industry, and the costs of compliance
with such regulation may increase.

 

A-4

 

These
conditions or similar ones may continue to persist or worsen, causing the Bank
to experience continuing or increased adverse effects on its business, financial
condition, results of operations and the price of the Common Stock.

 

The banking industry is heavily regulated, and that regulation could
limit or restrict the Bank’s activities and adversely affect its financial
results.

 

The
Bank operates in a highly regulated industry and is subject to examination,
supervision, and comprehensive regulation by various federal and state
agencies, including the Federal Deposit Insurance Corporation (the “FDIC”) and the State of Georgia Department of Banking and Finance.  The Bank’s compliance with these regulations
is costly and restricts some of its activities, including payment of dividends,
mergers and acquisitions, investments, loans and interest rates and locations
of offices.  The Bank is also subject to
capitalization guidelines established by its regulators, which require the Bank
to maintain adequate capital to support its business.

 

In
light of current conditions in the global financial markets and the global
economy, regulators have increased their focus on the regulation of the
financial services industry.  Most
recently, governments in the U.S. and abroad have intervened on an
unprecedented scale.  Proposals for
legislation, including a comprehensive overhaul of the financial regulatory
system in the U.S., have been, and are expected to be, introduced in the U.S.
Congress, in state legislatures and around the world.  These proposals are likely to alter standards
used to measure regulatory compliance and to determine the adequacy of
liquidity, risk management and other operational practices for financial
services companies.  The Bank is unable
to predict whether any of these legislative and regulatory initiatives will
succeed, which form they will take, or whether any additional changes to
statutes or regulations, including the interpretation or implementation of
those statutes or regulations, will occur in the future.  Any action of that nature could affect the
Bank in substantial and unpredictable ways and could have an adverse effect on
its business, financial condition, results of operations and the price of the
Common Stock.

 

Changes in monetary policy and interest rates could adversely affect
the Bank’s profitability.

 

The
Bank’s results of operations are affected by credit policies of monetary
authorities, particularly the Board of Governors of the Federal Reserve System
(the “Federal Reserve”).  The Bank’s profitability depends to a
significant extent on the Bank’s net interest income.  Net interest income is the difference between
interest income on interest-earning assets, such as loans and investments, and
interest expense on interest-bearing liabilities, such as deposits and
borrowings.  Interest rates are highly
sensitive to many factors that are beyond the Bank’s control, including general
economic conditions and policies of various governmental and regulatory
agencies.  Changes in monetary policy,
including changes in interest rates, could influence not only the interest the
Bank receives on loans and securities and the interest it pays on deposits and
borrowings, but those changes could also affect its ability to originate loans
and obtain deposits.

 

A-5

 

The
Bank’s net interest income will be adversely affected if market interest rates
change such that the interest it pays on deposits and borrowings increases
faster than the interest earned on loans and investments.  Changes in interest rates could also
adversely affect the income of some of the Bank’s noninterest income
sources.  For example, if mortgage
interest rates increase, the demand for residential mortgage loans will likely
decrease, which will have an adverse effect on the Bank’s mortgage loan fee
income.  Continuing declines in security
values could further reduce trust and investment income.

 

In
light of changing conditions in the national economy and in the financial
markets, particularly the uncertain economic environment, the continuing threat
of terrorist acts and the current military operations in the Middle East, the
Bank cannot predict possible future changes in interest rates, which may
negatively affect its deposit levels, loan demand and its business and
earnings.  Furthermore, the actions of
the United States and other governments in response to ongoing economic crises
may result in currency fluctuations, exchange controls, market disruption and
other adverse effects.

 

Changes in local economic conditions where the Bank operates could have
a negative effect.

 

The
Bank’s success depends significantly on growth, or lack thereof, in population,
income levels, deposits and housing starts in the geographic markets it serves
in the State of Georgia.  The local
economic conditions in these areas have a significant impact on the Bank’s
commercial, real estate and construction loans, the ability of borrowers to
repay these loans, and the value of the collateral securing these loans.  Adverse changes in, and further deterioration
of, the economic conditions of the Southeastern United States in general or any
one or more of the Bank’s local markets could negatively affect the Bank’s
financial condition, results of operations and the Bank’s profitability.  A continuing deterioration in economic
conditions could result in the following consequences, any of which could have
a material adverse effect on the Bank’s business:

 

·                   loan
delinquencies may increase;

 

·                   problem
assets and foreclosures may increase;

 

·                   demand
for the Bank’s products and services may decline; and

 

·                   collateral
for loans that the Bank makes, especially real estate, may decline in value, in
turn reducing a customer’s borrowing power, and reducing the value of assets
and collateral associated with the Bank’s loans.

 

The Bank will face strong competition from
other financial services providers.

 

The
Bank has and will continue to operate in highly competitive markets for the
products and services it offers.  The
competition among financial services providers to attract and retain customers
is strong.  Customer loyalty can be
easily influenced by a competitor’s new products, especially offerings that
could provide cost savings or a higher return to the customer.  Some of the Bank’s competitors may be better
able to provide a wider range of products and services over a greater
geographic area.  The Bank has and will
continue to compete with commercial banks, credit unions, savings and loan
associations, mortgage banking firms, consumer finance 

 

A-6

 

companies,
securities brokerage firms, insurance companies, money market funds, and other
mutual funds, as well as other regional, super-regional, national and
international financial institutions that operate offices in the Bank’s market
and elsewhere.  Moreover, this highly
competitive industry could become even more competitive as a result of
legislative, regulatory and technological changes and continued consolidation.

 

Some
of the Bank’s competitors may have fewer regulatory constraints, lower cost
structures and higher lending limits.  In
terms of lending limits, the Bank’s legally mandated lending limits are and
would be lower than those of some of its competitors because it will have less
capital than such competitors.  The
Bank’s lower lending limits may discourage borrowers with lending needs that exceed
those limits from doing business with it. 
While the Bank may try to serve these borrowers by selling loan
participations to other financial institutions, this strategy may not succeed
in this current market because the number of institutions that are willing to
act as loan participants is decreasing.

 

While
the Bank believes it can and does successfully compete with these other
financial institutions in its market areas, it may face a competitive
disadvantage as a result of its relatively smaller size, lack of geographic
diversification beyond the State of Georgia and inability to spread its
marketing costs across a broader market.

 

Future growth or operating results may require the Bank to raise
additional capital, but that capital may not be available or may be dilutive.

 

Although
the Bank expects to raise approximately $250 million in this offering, to the
extent that its future operating results erode capital, or if it elects to
expand through loan growth, the Bank may be required to raise additional
capital.  In addition, the Bank is required
by federal and state regulatory authorities to maintain adequate levels of
capital to support its operations.

 

The
Bank’s ability to raise capital will depend on conditions in the capital
markets, which are outside of the Bank’s control and largely do not depend on
the Bank’s financial performance. 
Accordingly, the Bank cannot be assured of its ability to raise capital
when needed or on favorable terms.  If
the Bank cannot raise additional capital when needed, it will be subject to
increased regulatory supervision and the imposition of restrictions on its
growth and business.  These restrictions
could negatively affect the Bank’s ability to operate or further expand its
operations through loan growth, acquisitions or the establishment of additional
branches and may result in increases in operating expenses and reductions in
revenues that could have a material adverse effect on the Bank’s financial
condition, results of operations and the price of Common Stock.

 

Liquidity needs could adversely affect the Bank’s results of operations
and financial condition.

 

The
Bank’s primary sources of funds are customer deposits and loan repayments.  Deposit levels may be affected by a number of
factors, including rates paid by competitors, general interest rate levels,
returns available to customers on alternative investments and general economic
conditions.  Moreover, upon completion of
the assumption of the Target Banks’ 

 

A-7

 

deposit
liabilities from the FDIC, the Bank intends to reprice some or all of the
acquired deposits to conform with current market conditions.  If the Bank reprices these liabilities too
aggressively, the affected depositors could choose to withdraw their deposits,
which could result in a need for new funding sources to replace these lost
deposits.  Scheduled loan repayments are
a relatively stable source of funds; however, they are subject to the ability
of borrowers to repay the loans.  The
ability of borrowers to repay loans can be adversely affected by a number of
factors outside of the Bank’s control, including changes in economic
conditions, adverse trends or events affecting business industry groups,
reductions in real estate values or markets, business closings or lay-offs,
inclement weather, natural disasters and international instability.  Accordingly, the Bank may be required from
time to time to rely on secondary sources of liquidity to meet withdrawal
demands or otherwise fund operations. 
Those sources may include Federal Home Loan Bank (“FHLB”)
advances, brokered deposits and federal funds lines of credit from
correspondent banks.  While the Bank
believes that these sources are currently adequate, there can be no assurance
they will be sufficient to meet future liquidity demands, particularly if the
Bank experiences atypical deposit withdrawal demands or increased loan demand
or if regulatory decisions should limit available funding sources such as
brokered deposits.  The Bank may be
required to slow or discontinue loan growth, capital expenditures or other
investments or liquidate assets should those sources not be adequate.

 

The Bank will face risks with respect to
future expansion and acquisitions or mergers.

 

In
the future, the Bank may seek to acquire other financial institutions or parts
of those institutions, including additional purchases from the FDIC.  However, the Bank may not have the
opportunity to make suitable acquisitions on favorable terms, which could
negatively impact the growth of its business. 
The Bank expects that other banking and financial companies, many of
which have significantly greater resources, will compete with it to acquire
compatible businesses.  This competition
could increase prices for acquisitions that the Bank would likely pursue.  Also, acquisitions of regulated businesses
such as banks are subject to various regulatory approvals.  If the Bank fails to receive the appropriate
regulatory approvals, it will not be able to consummate an acquisition that it
believes is in its best interests.

 

The Bank’s financial condition may be affected negatively by the costs
of litigation.

 

The
Bank may be involved from time to time in a variety of litigation,
investigations or similar matters arising out of its business.  The Bank’s insurance may not cover all claims
that may be asserted against it, and any claims asserted against it, regardless
of merit or eventual outcome, may harm the Bank’s reputation.  Should the ultimate judgments or settlements
in any litigation or investigation significantly exceed the Bank’s insurance
coverage, they could have a material adverse effect on its business, financial
condition and results of operations.  In
addition, the Bank may not be able to obtain appropriate types or levels of
insurance in the future, nor may it be able to obtain adequate replacement
policies with acceptable terms, if at all.

 

The Bank may be required to pay significantly higher FDIC premiums in
the future.

 

Recent
insured institution failures, as well as deterioration in banking and economic
conditions, have significantly increased the loss provisions of the FDIC,
resulting in a decline in 

 

A-8

 

the
designated reserve ratio to historical lows. 
The FDIC expects a higher rate of insured institution failures in the
next few years compared to recent years. 
Therefore, the reserve ratio may continue to decline.  Additionally, the Emergency Economic
Stabilization Act temporarily increased the limit on FDIC coverage to $250,000
through December 31, 2009, which was extended to December 13, 2019 on
May 20, 2009.

 

These
developments have caused the premiums assessed by the FDIC to increase.  Specifically, beginning April 1, 2009,
the deposit insurance assessment increased to 22 basis points per $100 of
deposits for institutions in Risk Category II, which is the category into which
the Bank is likely to fall. 
Additionally, on May 22, 2009, the FDIC announced a final
rule imposing a 5 basis point special emergency assessment on
June 30, 2009, payable September 30, 2009.  The amount of the assessment will be $0.05
for each $100 of assets, less Tier 1 capital, as of June 30, 2009, but the
amount of the assessment is capped at 10 basis points of domestic
deposits.  The final rule also
allows the FDIC to impose additional special emergency assessments on or after
September 30, 2009, of up to 5 basis points per quarter, if necessary to
maintain public confidence in FDIC insurance. 
The FDIC has indicated that a second assessment is probable.  These higher FDIC assessment rates and
special assessments will have an adverse impact on the Bank’s results of
operations and financial condition.

 

Changes in accounting policies and practices, as may be adopted by the
regulatory agencies, the Financial Accounting Standards Board, or other
authoritative bodies, could materially impact the Bank’s financial statements.

 

The
Bank’s accounting policies and methods are fundamental to how it records and
reports its financial condition and results of operations.  From time to time, the regulatory agencies,
the Financial Accounting Standards Board, and other authoritative bodies change
the financial accounting and reporting standards that govern the preparation of
the Bank’s financial statements.  These
changes can be difficult to predict and can materially impact how the Bank
records and reports its financial condition and results of operations.

 

The Bank must respond to rapid
technological changes, and these changes may be more difficult or expensive
than anticipated.

 

The
Bank will have to respond to future technological changes. Specifically,
if the Bank’s competitors introduce new products and services embodying new
technologies, or if new industry standards and practices emerge, then the
Bank’s existing product and service offerings, technology and systems may be
impaired or become obsolete.  Further, if
the Bank fails to adopt or develop new technologies or to adapt its products
and services to emerging industry standards, then the Bank may lose current and
future customers, which could have a material adverse effect on its business,
financial condition and results of operations. 
The financial services industry is changing rapidly and in order to
remain competitive, the Bank must continue to enhance and improve the
functionality and features of its products, services and technologies.  These changes may be more difficult or
expensive than the Bank anticipates.

 

A-9

 

Risks
Related to Investing in the Common Stock

 

There is no public market for the Common Stock.

 

There
is no public market for the Bank’s Common Stock and, as none should be expected
to develop in the foreseeable future, a Purchaser may be unable to liquidate
his, her, or its investment and should be prepared to bear the economic risk of
an investment for an indefinite period. 
The Bank cannot predict the extent to which an active public market for
the Common Stock will develop or be sustained after this Proposed
Acquisition.  In recent years, the stock
market has experienced a high level of price and volume volatility, and market
prices for the stock of many companies have experienced wide price fluctuations
that have not necessarily been related to operating performance.

 

The
Bank cannot predict the effect of future sales of the Common Stock in the
market, the availability of the Common Stock for sale in the market, or the
market price of the Common Stock. 
Therefore, the Bank cannot assure the Purchaser that sales of
substantial amounts of the Common Stock in the market, or the potential for
large amounts of market sales, would not cause the price of the Common Stock to
decline or impair the Bank’s ability to raise capital.  Following the Proposed Acquisition, the Bank
expects to have approximately 25,767,437 shares of Common Stock
outstanding.

 

The Purchaser’s funds that are being held
in escrow in the amount of such Purchaser’s Purchase Price will not be
available to the Purchaser for a period of time, and the
Purchaser may not revoke his, her or its subscription.

 

All
subscription funds will be held in an escrow account maintained by the Escrow
Agent  until the earlier of the
Closing, the rejection of the subscription or the termination of this offering
pursuant to Section 8 of the Agreement. 
During such time, the Purchaser may not revoke his, her or its
subscription.  The Purchaser will not
earn interest on its investment or have use of its funds during such period,
even if the Bank ultimately does not accept such Purchaser’s subscription or if
the offering is terminated.

 

If the Bank’s stock price fluctuates after this offering, the Purchaser
could lose a significant part of its investment.

 

The
market price of the Bank’s stock may be influenced by many factors, some of
which are beyond the Bank’s control, including those described above in this
Exhibit A and the following:

 

·                   general
economic and stock market conditions;

 

·                   risks
related to the Bank’s business and the Bank’s industry, including those
discussed above;

 

·                   changes
in conditions or trends in the Bank’s industry, markets or customers;

 

·                   strategic
actions by the Bank or the Bank’s competitors;

 

A-10

 

·                   announcements
by the Bank or the Bank’s competitors of significant contracts, acquisitions,
joint marketing relationships, joint ventures or capital commitments;

 

·                   variations
in the Bank’s quarterly operating results and those of the Bank’s competitors;

 

·                   future
sales of the Common Stock or other securities;

 

·                   investor
perceptions of the investment opportunity associated with the Common Stock
relative to other investment alternatives; and

 

·                   continuing
threats of terrorist acts.

 

As
a result of these factors, investors in the Common Stock may not be able to
resell their shares at or above the offering price or may not be able to resell
them at all.  These broad market and
industry factors may materially reduce the market price of the Common Stock,
regardless of the Bank’s operating performance. 
In addition, price volatility may be greater if the public float and
trading volume of the Common Stock is low.

 

The market price of the Common Stock may decline after the stock
offering.

 

The
Bank is currently offering for sale 25,000,000 shares of the Common Stock.  The possibility that substantial amounts of
shares of the Common Stock may be sold in the public market may cause market
prices for the Common Stock to decrease. 
Additionally, because stock prices generally fluctuate over time, there
is no assurance that Purchasers of the Common Shares will be able to sell
shares after the offering at a price equal to or greater than the actual
purchase price.  Purchasers should
consider these possibilities in determining whether to purchase the Common
Shares and the timing of any sale of shares of the Common Stock.

 

The Common Stock is illiquid, and the transfer of
the Common Shares purchased in this offering may be restricted.

 

The
Bank is offering the Common Shares pursuant to exemptions from registration
under applicable federal and state securities laws, and any transfer of the
Common Shares purchased in this offering may be restricted unless exemptions
from such registration provisions are applicable to the transfer or unless the
transfer of the Common Stock is registered pursuant to applicable federal and
state securities laws.  Therefore,
holders of the Common Shares may be required to bear the economic risk of this
investment for an indefinite period of time.

 

The Bank’s new management team will have
broad discretion over the use of the proceeds of this offering.

 

All
of the estimated net proceeds from this offering will be allocated to acquire
the assets and liabilities of the Target Banks and for general corporate
purposes, including the put right to the shareholders that held shares prior to
the Closing.  Although this is the intended
use of the proceeds, the Bank’s new management team will have broad discretion
as to the application of such proceeds.

 

A-11

 

The offering price for the Common Shares
has been established arbitrarily and may not reflect current or future value of
the Common Shares.

 

The
offering price for the Common Shares offered hereby was arbitrarily determined
and is unrelated to any specific investment criteria and may not reflect
current or future value of the Common Shares. 
There can be no assurance that the Bank’s future valuation will be equal
to or higher than the valuation reflected in the Common Shares in this
offering, and indeed such future valuation could be lower.

 

The Bank does not anticipate declaring
dividends in the foreseeable future.

 

Holders
of the Common Stock are not entitled to receive dividends unless declared by
its Board of Directors.  Since the Bank’s
inception, it has not paid any dividends on the Common Stock and does not
intend to pay dividends in the foreseeable future.  Even if the Bank decides to pay dividends,
its ability to do so will be limited by regulatory restrictions, its financial
condition, results of operation, capital requirements, level of indebtedness,
and such other factors as the Bank’s Board of Directors deems relevant.  The ability of the Bank to pay dividends is
limited by its obligations to maintain sufficient capital and by other
restrictions on its dividends that are applicable to banks.  If the Bank does not satisfy these regulatory
requirements, it will be unable to pay dividends on the Common Stock.

 

An entity holding as little as a 5% interest in the Bank’s outstanding
Common Stock could, under certain circumstances, be subject to regulation as a “bank
holding company.”

 

Any
entity, including a “group” composed of natural persons, owning or controlling
with the power to vote 25% or more of the Bank’s outstanding Common Stock, or
5% or more if the holder otherwise exercises a “controlling influence” over the
Bank, may be subject to regulation as a “bank holding company” in accordance
with the Bank Holding Company Act of 1956, as amended (the “BHC Act”).  In
addition, (i) any bank holding company or foreign bank with a U.S.
presence may be required to obtain the approval of the Federal Reserve under
the BHC Act to acquire or retain 5% or more of the Bank’s outstanding Common
Stock and (ii) any person not otherwise defined as a company by the BHC
Act and its implementing regulations may be required to obtain the approval of
the Federal Reserve under the Change in Bank Control Act to acquire or retain
10% or more of the Bank’s outstanding Common Stock.  Becoming a bank holding company imposes
statutory and regulatory restrictions and obligations, such as providing
managerial and financial strength for any bank subsidiaries.  Regulation as a bank holding company could
require the holder to divest all or a portion of the holder’s investment in the
Common Stock or those nonbanking investments that may be deemed impermissible
or incompatible with bank holding company status, such as a material investment
in a company unrelated to banking.

 

Anti-takeover provisions in the Bank’s charter documents could
discourage, delay or prevent a change of control of the Bank and diminish the
value of the Common Stock.

 

Some
of the provisions of the Bank’s articles of incorporation and bylaws could make
it difficult for the Bank’s shareholders to change the composition of the Bank’s
Board of Directors, 

 

A-12

 

preventing
them from changing the composition of management.  In addition, the same provisions may
discourage, delay or prevent a merger or acquisition that the Bank’s
shareholders may consider favorable.

 

These
provisions include:

 

·                   authorizing
the Bank’s Board of Directors to issue preferred shares without shareholder
approval;

 

·                   no
preemptive rights; and

 

·                   pursuant
to the Georgia Business Corporation Code § 14-2-728, no cumulative voting.

 

These
anti-takeover provisions could impede the ability of the Bank’s common
shareholders to benefit from a change of control and, as a result, could have a
material adverse effect the market price of the Common Stock and the Purchasers’
ability to realize any potential change-in-control premium.

 

The Bank’s securities are not FDIC insured.

 

The
Bank’s securities, including the Common Stock, are not savings or deposit
accounts or other obligations of the Bank, and are not insured by the Deposit
Insurance Fund, the FDIC or any other governmental agency and are subject to
investment risk, including the possible loss of principal.

 

The price of the Common Shares is not a guarantor of future value.

 

The
price of the Common Shares may not indicate the market price for the Common
Stock after the Proposed Acquisition is completed or at any future time.  The price of the Common Shares was determined
by considering a variety of factors, including, among other things, the prices
at which the Common Stock has most recently been sold, the history of, and
prospects for, the banking industry in the Bank’s market area, the price to
earnings and price to book value multiples represented by the price, the prices
of Common Stock of comparable companies, and the Bank’s historical and
prospective cash flow and earnings and those of comparable companies in recent
periods.

 

The Bank’s future capital needs could
result in dilution of the Purchasers’ investment.

 

The
Bank’s Board of Directors may determine from time to time that there is a need
to obtain additional capital through the issuance of additional shares of the
Common Stock or other securities. 
Particularly given the current depressed market for financial stocks,
these issuances would likely dilute the ownership interests of the Purchasers
and may dilute the per share book value of the Common Stock.  New investors may also have rights,
preferences, and privileges senior to the Bank’s current shareholders who may
be adversely impacted by the new investors.

 

A-13

 

EXHIBIT B

 

FORM OF OPINION OF COUNSEL FOR THE BANK

 

The
opinion of Dinur and DeLuca, LLP, counsel for State Bank and Trust Company (the
“Bank”), to be delivered pursuant to
Section 7(b) of the Stock Purchase Agreement dated July 14, 2009
by and among the Bank and each of the Purchasers named therein (the “Purchase Agreement”) shall be to the effect that:

 

(A)          The
Bank (a) has been duly incorporated and is validly existing as a banking
corporation in good standing under the laws of the State of Georgia and
(b) has the corporate power to own its property, to conduct the business
in which it is engaged and which it is proposed to be engaged immediately after
the consummation of the Proposed Acquisition, to execute and deliver each of
the Transaction Documents (as defined in the Purchase Agreement) and the
P&A Agreement to which it is a party and to perform its obligations
thereunder.

 

(B)           The
Bank is duly qualified to transact business and in good standing as a foreign
corporation in each jurisdiction in which the character or location of its
assets or properties (owned, leased or licensed) or the nature of its
businesses makes such qualification necessary, except for such jurisdictions
where the failure to so qualify, individually or in the aggregate, would not
have a Bank Material Adverse Effect (as defined in the Purchase Agreement).

 

(C)           The
Bank has duly authorized, executed and delivered each of the Transaction
Documents and the P&A Agreement, and each Transaction Document and the
P&A Agreement constitutes the legal, valid and binding obligation of the
Bank and is enforceable against the Bank in accordance with its terms, except
as the enforcement hereof may be limited by (i) bankruptcy, insolvency,
moratorium, reorganization, receivership, conservatorship or other similar laws
relating to or affecting the enforcement of creditors’ rights or
(ii) general equity principles, regardless of whether such enforceability
is considered in a proceeding in equity or at law.

 

(D)          The
Common Shares (as defined in the Purchase Agreement) have been duly authorized
and, when issued and delivered in accordance with the terms of the Purchase
Agreement, will be validly issued, fully paid and non-assessable.  Except as provided for in the Agreement, the
issuance of the Common Shares will not be subject to any preemptive or similar
rights.

 

(E)           To
such counsel’s knowledge, the Bank is not in breach of, or in default under
(nor has any event occurred which with notice, lapse of time, or both would
constitute a breach of, or default under), any license, indenture, mortgage,
deed of trust, bank loan or any other agreement or instrument to which the Bank
is a party or by which its respective properties may be bound or affected or
under any law, regulation or rule or any decree, judgment or order
applicable to the Bank, which breach or default would have a Bank Material
Adverse Effect.

 

(F)           The
execution, delivery and performance of the Transaction Documents and the
P&A Agreement by the Bank and the consummation of the transactions
contemplated thereby (including, without limitation, the issuance and sale of
the Common Shares) do not and will not (i) conflict with or result in a
breach of any of the terms and provisions of, or constitute a default (or an
event which with notice or lapse of time, or both, would constitute a default)
under, or 

 

B-1

 

result
in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Bank pursuant to, any indenture, mortgage, deed of
trust, loan agreement or any other agreement, instrument, franchise, license or
permit known to such counsel to which the Bank is a party or by which any of
the Bank or its respective properties or assets may be bound, except for such
violations as would not, individually or in the aggregate, have a Bank Material
Adverse Effect, (ii) violate the Articles of Incorporation or Bylaws of
the Bank or (iii) violate any provision of any federal or state law,
statute, rule or regulation which applies to the Bank.

 

(G)           Based
upon the representations, warranties and agreements of the Purchasers in
Section 2 of the Purchase Agreement, it is not necessary in connection
with the offer, sale and delivery of the Common Shares to the Purchasers under
the Purchase Agreement to register the Common Shares under the Securities Act
of 1933, as amended, it being understood that no opinion is expressed as to any
subsequent resale of any Common Shares.

 

(H)          To
our knowledge, after having made inquiry of officers of the Bank but without
having made any other investigation, the Bank is not a party to any action,
suit or proceeding.

 

(I)            The
Bank has received approval from the Bank’s primary regulators regarding the
appointment of the proposed management team after the completion of the
Proposed Acquisition.(1)

 

(1)   This opinion will be based upon a certificate
from the management team that includes a copy of confirmation in writing from
the FDIC and Georgia Department of Banking and Finance with regard to the
Interagency Notice of Change in Control that the management team filed with
such regulators.

 

B-2

 

EXHIBIT C

 

STATE BANK AND TRUST COMPANY

 

SECRETARY’S CERTIFICATE

 

July     , 2009

 

I,
Marvin Ragan, Corporate Secretary of State Bank and Trust Company, a Georgia  banking corporation (the “Bank”),
hereby certify that:

 

(a)           The Bank’s records indicate that the
total number of shares of the common stock of the Bank issued and outstanding
immediately prior to the closing of the transactions contemplated by that
certain Stock Purchase Agreement, dated as of July 14, 2009, by and among
the Bank and the Purchasers set forth therein (the “Agreement”),
was 767,437 shares of common stock, and, as of the date hereof, after giving
effect to the issuance of 28,455,000 shares pursuant to the terms of the
Agreement and the issuance of 800,000 shares pursuant to certain other
agreements, the total number of shares of common stock of the Bank outstanding
will be 30,022,437 shares;

 

(b)           Attached hereto as Annex A is a true
and complete copy of the Articles of Incorporation of the Bank, as in full
force and effect as of the date hereof;

 

(c)           Attached hereto as Annex B is a true
and complete copy of the Bylaws of the Bank, as in full force and effect as of
the date hereof;

 

(d)           Attached hereto as Annex C is a true,
complete and correct copy of all resolutions of the Board of Directors and of
each committee, if any, thereof, of the Bank adopted by unanimous written
consent or at a meeting called at which a quorum was present and acting
throughout, relating either directly or indirectly to the Transaction Documents
and the P&A Agreement (each as such term is defined in the Agreement) and
all transactions in connection therewith, all of which resolutions have not
been amended, modified or rescinded and are in full force and effect on the
date hereof and which resolutions are the only resolutions adopted by the Board
of Directors or any committee, if any, thereof relating either directly or
indirectly to the Transaction Documents, the P&A Agreement and the transactions
contemplated in connection therewith.

 

Capitalized
terms that are not defined herein have the meanings ascribed to them in the
Agreement.

 

Signature appears on the following page.

 

C-1

 

IN WITNESS WHEREOF, I have hereunto
signed my name as of the date first written above.

 

	
   

  	
  STATE BANK AND TRUST COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Marvin
  Ragan

  
	
   

  	
   

  	
  Corporate
  Secretary

  

 

C-2

 

EXHIBIT D

 

STATE BANK AND TRUST COMPANY

 

OFFICER’S CERTIFICATE

 

July     , 2009

 

The
undersigned, Marvin Ragan, Senior Vice President of State Bank and Trust
Company (the “Bank”), does hereby certify that I
am the duly appointed, qualified and acting Senior Vice President of the
Bank.  For purposes of this Certificate,
the terms used and not defined herein shall have the respective meanings
specified in that certain Stock Purchase Agreement, dated as of July 14,
2009 (the “Agreement”), by and among the Bank
and the Purchasers set forth therein.

 

Pursuant
to Section 7(e) of the Agreement, the undersigned certifies as of the
date of this Certificate that (i) the representations and warranties of
the Bank contained in Section 3 of the Agreement were true and correct in
all material respects (except for those representations and warranties that are
qualified by materiality or Bank Material Adverse Effect, which were true and
correct in all respects) as of the date of the Agreement and as of the Closing
Date as though made at that time (except that representations and warranties
that speak as of a specific date shall be true and correct as of such specified
date), and (ii) the Bank has performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by the
Transaction Documents and the P&A Agreement (and by the FDIC and Georgia
Department of Banking and Finance, if any) to be performed, satisfied or
complied with by the Bank at or prior to the Closing Date.

 

Capitalized
terms that are not defined herein have the meanings ascribed to them in the
Agreement.

 

Signature appears on the following page.

 

D-1

 

IN WITNESS WHEREOF, I have hereunto
signed my name as of the date first written above.

 

 

	
   

  	
  STATE BANK AND TRUST COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Marvin
  Ragan

  
	
   

  	
   

  	
  Senior
  Vice President

  

 

D-2EXHIBIT 10.9

 

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR ANY STATE SECURITIES LAWS. 
SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAWS.

 

WARRANT TO PURCHASE COMMON STOCK
OF

STATE BANK AND TRUST
COMPANY

 

This warrant agreement (the “Warrant”), effective as of June 24, 2009
(the “Effective Date”), certifies that                            
or his assigns (each individually, the “Holder”), for value received, is
entitled to purchase from STATE BANK AND TRUST
COMPANY, Pinehurst, Georgia, a Georgia state bank (the “Company”),
fully-paid and nonassessable Common Shares of the Company (the “Common Shares”)
on the terms and subject to the conditions set forth herein.

 

1.                                      GENERAL.

 

1.1                               Purchase
of Units; Associated Warrant.  This Warrant is issued in connection with,
and as part of, the Holder’s purchase of units of the Company pursuant to that
certain Subscription Agreement dated April 1, 2009, with each unit
containing a Common Share and a warrant to purchase 3.337675 Common Shares.

 

1.2                               Type of
Shares Subject to Warrant.  This Warrant shall be exercisable for Common
Shares, as adjusted pursuant to the other provisions of this Warrant.

 

1.3                               Per
share Exercise Price of Warrant.  The per share exercise price of this Warrant
shall be $10.00, as adjusted pursuant to the other provisions of this Warrant
(the “Purchase Price”).

 

1.4                               Number
of Shares Subject to Warrant.  The number of Common Shares issuable upon
full exercise of this Warrant shall initially be 400,521.

 

1.5                               Term.  This Warrant may be exercised at any time or
from time to time until 5:00 p.m. Eastern time on April 1, 2019 (the “Expiration
Date”).

 

2.                                      EXERCISE;
ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.

 

2.1                               General.  This Warrant shall be
exercised by surrender to the Company at its principal office (or at such other
location as the Company may advise the Holder in writing) of this Warrant
properly endorsed with the Form of Subscription attached hereto duly
filled in and signed and, if applicable, upon payment in cash or by check of
the aggregate Purchase Price for the number of Common Shares for which this
Warrant is being exercised determined in accordance with the provisions
hereof.  The Common Shares purchased
under this Warrant shall be and are deemed to be issued to the Holder hereof as
the record owner of such shares as of the close of business on the date on
which this Warrant shall have been surrendered, properly endorsed, the
completed, executed Form of Subscription delivered and payment made for
such Common Shares.  In case of a
purchase of fewer than all the Common Shares that may be purchased under this
Warrant, the Company shall cancel this Warrant and execute and deliver a new
Warrant or Warrants of like tenor for the balance of the Common Shares
purchasable under the Warrant surrendered upon such purchase to the Holder
within a reasonable time and in any event within 10 days after the rights
represented by this Warrant have been so exercised.

 

 

2.2                               Net
Issue Exercise. 
Notwithstanding any provisions herein to the contrary, if the fair
market value of one Common Shares is greater than the Purchase Price (at the
date of calculation as set forth below), in lieu of exercising this Warrant for
cash, the Holder may elect to receive Common Shares equal to the value (as
determined below) of this Warrant (or the portion thereof being canceled) by
surrender of this Warrant at the principal office of the Company together with
the properly endorsed Form of Subscription and notice of such election in
which event the Company shall issue to the Holder a number of Common Shares
computed using the following formula:

 

	
   

  	
  X
  = Y (A-B)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
                A

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Where

  	
  X
  =       the number of Common Shares to be
  issued to the Holder

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Y
  =       the number of Common Shares
  purchasable under the Warrant or, if only a portion of the Warrant is being
  exercised, the portion of the Warrant being canceled (at the date of such
  calculation)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A
  =       the fair market value of one
  Common Share (at the date of such calculation)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B
  =       Purchase Price (as adjusted to the
  date of such calculation)

  

 

For
purposes of the above calculation, fair market value of one Common Share shall
be determined by the Company’s Board of Directors in good faith; provided,
however, that (a) in the event that this Warrant is exercised pursuant to
this Section 2.1 in connection with the Company’s initial public offering
of its Common Stock, the fair market value per share shall be the product of (i) the
per share offering price to the public of the Company’s initial public
offering, and (ii) the number of Common Shares into which each Warrant
Share is convertible at the time of such exercise; and (b) in the event
that this Warrant is exercised after the Company’s initial public offering of
its Common Shares, the fair market value per share shall be the average closing
price of the Company’s Common Shares over the five trading days immediately
preceding the time of exercise.

 

3.                                      SHARES
TO BE FULLY PAID; RESERVATION OF SHARES.

 

The
Company covenants and agrees that all Common Shares that may be issued upon the
exercise of the rights represented by this Warrant will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable and free from all
preemptive rights of any shareholder and free of all taxes, liens and charges
with respect to the issue thereof.  The
Company will take all such action as may be necessary to assure that such
Common Shares may be issued as provided herein without violation of any
applicable law or regulation or the Company’s organizational documents, or of any
requirements of any domestic securities exchange upon which the Common Shares
may be listed; provided, however, that the Company shall not be required to
effect a registration under Federal or state securities laws with respect to
such exercise.

 

4.                                      ADJUSTMENT
OF PURCHASE PRICE AND NUMBER OF COMMON SHARES.

 

The
Purchase Price and the number of Common Shares purchasable upon the exercise of
this Warrant shall be subject to adjustment from time to time upon the
occurrence of certain events described 

 

2

 

in
this Section 4.  Upon each
adjustment of the Purchase Price, the Holder shall thereafter be entitled to
purchase, at the Purchase Price resulting from such adjustment, the number of
Common Shares obtained by multiplying the Purchase Price in effect immediately
prior to such adjustment by the number of Common Shares purchasable pursuant
hereto immediately prior to such adjustment, and dividing the product thereof
by the Purchase Price resulting from such adjustment.

 

4.1                               Subdivision
or Combination of Common Shares.  In case the Company shall at any time
subdivide its outstanding Common Shares into a greater number of shares, the
Purchase Price in effect immediately prior to such subdivision shall be proportionately
reduced, and conversely, in case the outstanding Common Shares shall be
combined into a smaller number of shares, the Purchase Price in effect
immediately prior to such combination shall be proportionately increased.

 

4.2                               Dividends
in Common Shares, Other Shares, Property, Reclassification.  If at any time or from time to time the
holders of the class and series of shares for which this Warrant is then
exercisable (or any other securities at the time receivable upon the exercise
of this Warrant), shall have received or become entitled to receive, without
payment therefor,

 

(a)                                  Common Shares
or any other securities that are at any time directly or indirectly convertible
into or exchangeable for Common Shares of the Company, or any rights or options
to subscribe for, purchase or otherwise acquire any of the foregoing by way of
dividend or other distribution,

 

(b)                                  any cash paid
or payable (other than as a cash dividend or distribution), or

 

(c)                                  Common Shares
or any other securities or property (including cash) by way of spinoff,
split-up, reclassification, combination of shares or similar corporate
rearrangement, (other than Common Shares issued as a stock split or adjustments
in respect of which shall be covered by the terms of Section 4.1 above),

 

then
and in each such case, the Holder shall, upon the exercise of this Warrant, be
entitled to receive, in addition to the number of shares receivable thereupon,
and without payment of any additional consideration therefor, the amount of
shares and other securities and property (including cash in the cases referred
to in clause (b) above) that such Holder would hold on the date of such
exercise had it been the holder of record of such Common Shares as of the date
on which holders of Common Shares received or became entitled to receive such
shares or all other additional shares and other securities and property.

 

4.3                               Reorganization,
Consolidation, Merger or Sale.  If any recapitalization, reclassification or
reorganization of the capital stock of the Company, or any consolidation or
merger of the Company with another entity, or the sale of all or substantially
all of its assets or other transaction shall be effected in such a way that
holders of the class and series of capital stock for which this Warrant is then
exercisable shall be entitled to receive stock, securities, or other assets or
property (an “Corporate Change”), then, as a condition of such Corporate
Change, lawful and adequate provisions shall be made by the Company whereby the
Holder hereof shall thereafter have the right to purchase and receive (in lieu
of the Common Shares of the Company immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby) such shares,
securities or other assets or property as may be issued or payable with respect
to or in exchange for a number of outstanding shares equal to the number of
Common Shares immediately theretofore purchasable and receivable upon the
exercise of this Warrant.  In the event
of any Corporate Change, appropriate provision shall be made by the Company
with respect to the rights and interests of the Holder of this Warrant to the
end that the provisions hereof (including, without limitation, provisions for
adjustments of the Purchase Price and of the number of shares purchasable and
receivable upon the exercise of this Warrant) shall thereafter be applicable,
in 

 

3

 

relation
to any shares, securities or assets thereafter deliverable upon the exercise of
this Warrant.  The Company will not
effect any such consolidation, merger or sale unless, prior to the consummation
thereof, the successor corporation (if other than the Company) resulting from
such consolidation or the corporation purchasing such assets shall assume
by reasonable written instrument, executed and mailed or delivered to the
Holder at the last address of such Holder appearing on the books of the
Company, the obligation to deliver to such Holder such shares, securities or
assets as, in accordance with the foregoing provisions, such Holder may be
entitled to purchase.

 

4.4                               Certain
Events.  If any change
in the outstanding class and series of shares for which this Warrant is
exercisable or any other event occurs as to which the other provisions of this
Section 4 are not strictly applicable or if strictly applicable would not
fairly protect the purchase rights of the Holder in accordance with such
provisions, then the Company shall make an adjustment in the number and class
of shares available under this Warrant, the Purchase Price or the application
of such provisions, so as to protect the purchase rights of the Holder.  The adjustment shall give the Holder of this
Warrant upon exercise for the same aggregate Purchase Price the total number,
class and kind of shares as the Holder would have owned had this Warrant been
exercised prior to the event and had the Holder continued to hold such shares
until after the event requiring adjustment.

 

4.5                               Notices
of Change.

 

(a)                                  Immediately
upon any adjustment in the number or class of shares subject to this Warrant
and of the Purchase Price, the Company shall give written notice thereof to the
Holder, setting forth in reasonable detail and certifying the calculation of
such adjustment.

 

(b)                                  The Company
shall give written notice to the Holder at least 10 days prior to the date on
which the Company closes its books or takes a record for determining rights to
receive any dividends or distributions.

 

(c)                                  The Company
shall also give written notice to the Holder at least 20 days prior to the date
on which a Corporate Change, Change of Control or initial public offering of
Common Stock shall take place.  “Change
of Control” shall mean (x) a sale, lease or disposition of all of
substantially all of the assets of the Company or (y) any consolidation or
merger of the Company with or into any other entity, or any other corporate
reorganization, in which the Company’s unitholders immediately prior to such
consolidation, merger or reorganization own less than 50% of the surviving
entity’s or its parent’s voting power immediately after such consolidation,
merger or reorganization.

 

5.                                      NO
VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY.

 

Except
as expressly set forth herein, nothing contained in this Warrant shall be
construed as conferring upon the Holder the right to vote or to consent or to
receive notice as a shareholder of the Company or any other matters or any
rights whatsoever as a shareholder of the Company.  No dividends or interest shall be payable or
accrued in respect of this Warrant or the shares purchasable hereunder until,
and only to the extent that, this Warrant shall have been exercised.  No provisions hereof, in the absence of
affirmative action by the Holder to purchase Common Shares of the Company shall
give rise to any liability of the Holder for the Purchase Price or as a
shareholder of the Company, whether such liability is asserted by the Company
or by its creditors.

 

6.                                      REGISTRATION
RIGHT.  The Company agrees to grant
the Holder piggyback registration rights to register this Warrant and the
shares issuable upon exercise of this Warrant with the Securities and Exchange
Commission.  Such rights will be granted
if, and only if, the Company agrees to grant registration rights to another
holder(s) of Company shares or warrants, and the terms of these piggyback 

 

4

 

rights
will be the same as the piggyback rights granted to the other holder(s).  The Company agrees to ensure that any such
registration rights agreement will include the Holder as a party thereto, or a
third party beneficiary thereof, consistent with this Section 6.

 

7.                                      REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.

 

7.1                               Authority.  The execution and delivery by the Company of
this Warrant and the performance of all obligations of the Company hereunder,
including the issuance to Holder of the right to acquire shares of the Company’s
capital stock hereunder, have been duly authorized by all necessary corporate
action on the part of the Company, and this Warrant is consistent with the
Company’s articles of incorporation and bylaws and constitutes a legal, valid
and binding agreement of the Company, enforceable in accordance with its terms.

 

7.2                               Consents
and Approvals.  No consent
or approval of, giving notice to, registration with, or taking of any other
action in respect of any state, Federal or other governmental authority or
agency is required with respect to the execution, delivery and performance by
the Company of its obligations under this Warrant, except for any filing which
may be required by applicable Federal and state securities laws, which filings
will be made and effective by the time required by such laws.

 

8.                                      MODIFICATION
AND WAIVER.

 

This
Warrant and any provision hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of is sought.

 

9.                                      NOTICES.

 

Any
notice, request or other document required or permitted to be given or
delivered to the holder hereof or the Company shall be delivered or shall be
sent by certified mail, postage prepaid, to Holder at its address as shown on
the books of the Company or such other address as either may from time to time
provide to the other.

 

10.                               BINDING
EFFECT ON SUCCESSORS.

 

This
Warrant shall be binding upon any corporation succeeding the Company by merger,
consolidation or acquisition of all or substantially all of the Company’s
assets.

 

11.                               DESCRIPTIVE
HEADINGS AND GOVERNING LAW.

 

The
description headings of the several sections and paragraphs of this Warrant are
inserted for convenience only and do not constitute a part of this
Warrant.  This Warrant shall be construed
and enforced in accordance with, and the rights of the parties shall be
governed by, the laws of the State of Georgia.

 

12.                               LOST WARRANTS.

 

The
Company covenants to the Holder hereof that upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
this Warrant and, in the case of any such loss, theft or destruction, upon
receipt of an indemnity reasonably satisfactory to the Company, or in the case
of any such mutilation upon surrender and cancellation of this Warrant, the
Company, at Holder’s expense, will make and deliver a new warrant, of like
tenor, in lieu of the lost, stolen, destroyed or mutilated warrant.

 

5

 

13.                               FRACTIONAL
SHARES.

 

No
fractional shares shall be issued upon exercise of this Warrant.  The Company shall, in lieu of issuing any
fractional share, pay the holder entitled to such fraction a sum in cash equal
to such fraction multiplied by the then effective Purchase Price.

 

[SIGNATURES ON FOLLOWING
PAGE]

 

6

 

The
parties hereto have caused this Warrant to be duly executed effective as of the
Effective Date.

 

 

	
   

  	
  STATE BANK AND TRUST COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [

  	
   

  	
  ]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 

EXHIBIT A

 

SUBSCRIPTION/EXERCISE FORM

 

Date: 
                                  ,
20       

 

State
Bank & Trust Company

321
Fullington Avenue

P.O. Drawer
A

Pinehurst,
Georgia 31070

Attn:  President

 

Ladies
and Gentlemen:

 

o                                    The undersigned
hereby elects to exercise the warrant issued to it by State Bank &
Trust (the “Company”) and dated June 24, 2009 (the “Warrant”) to purchase
                      
shares of common stock of the Company (the “Common Shares”) at a purchase price
of $10.00 per share for an aggregate purchase price of
$                                
(the “Purchase Price”).  Pursuant to the
terms of the Warrant, the undersigned has delivered the Purchase Price herewith
in full in cash or by certified check or wire transfer.

 

o                                    The undersigned
hereby elects to convert
                  
shares issuable pursuant to this Warrant pursuant to the provisions of
Section 2 of the Warrant in a cashless exercise for a total number of
Common Shares to be received of
                        .

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

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