Document:

FOURTH AMENDMENT

TO THE

EMPLOYMENT AGREEMENT

BETWEEN FOSTER WHEELER INC.

AND

BETH B. SEXTON

 

This FOURTH AMENDMENT
(this "Amendment") to the Employment Agreement between FOSTER WHEELER INC., a Delaware corporation (the "Company"),
and BETH B. SEXTON (the "Executive"), dated as of April 7, 2008 (the "Agreement"), is made and entered
into as of October 29, 2012 (the "Amendment Effective Date").

 

WHEREAS, Foster
Wheeler Ltd. entered into the Agreement with the Executive;

 

WHEREAS, the
Company thereafter assumed the Agreement from Foster Wheeler Ltd. on or about February 9, 2009, and the Company and the Executive
entered into a (i) First Amendment to the Agreement, effective January 18, 2010 ("First Amendment"), (ii) Second Amendment
to the Agreement, effective May 4, 2010 ("Second Amendment"), and (iii) Third Amendment to the Agreement, dated February
22, 2011 (the "Third Amendment");

 

WHEREAS, the
Company is relocating the Executive’s primary office from Geneva, Switzerland to Reading, England and the Company acknowledges
that such relocation constitutes a material negative change in the employment relationship such that the Executive may terminate
employment for good reason pursuant to the Agreement Section 4.1.2(iv) (Termination; For Good Reason By the Executive);

 

WHEREAS, in
exchange for the valuable consideration provided by this Amendment, the Executive has agreed to (i) acknowledge and waive exercising
the Executive’s right to terminate employment for Good Reason relating to the relocation of the Executive’s principal
business location from Geneva, Switzerland to Reading, England and (ii) permit the secondment of this Agreement, as modified, to
another affiliate of the Company; and

 

WHEREAS, pursuant
to Section 9.6 of the Agreement, an amendment to the Agreement may be made pursuant to the written consent of the Company and the
Executive.

 

NOW THEREFORE,
for good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, and in further consideration
of the following mutual promises, covenants and undertakings, the parties agree by executing this Amendment to amend the Agreement,
including its First Amendment, Second Amendment and Third Amendment, as follows:

 

		1.	The Agreement is amended by replacing the Addendum set forth in the Second Amendment and incorporating
the provisions set forth in the Third Amendment with the following:

 

ADDENDUM

 

This Addendum sets
forth the terms and conditions applicable during the Executive's performance of duties (as described in Agreement Section 1.1),
for the period beginning on March 1, 2013 (the “Reading Move Date”) and ending on the date the Agreement is terminated
pursuant to Agreement Section 4 (the "Term"), provided, however, that sections of this Addendum shall become effective
on a date other than the Reading Move Date if and to the extent a different effective date is set forth below. Unless otherwise
provided in this Addendum, all Agreement terms, including its First Amendment, Second Amendment and Third Amendment (including
the Executive's entitlement to the compensation and benefits described in Agreement Section 3, as adjusted for merit increases
since the date of the Agreement) shall remain in full force and effect during the Term.

 

    	 

    	 

    

 

 

		A-1.	Location.

 

During the Term, the
Executive shall perform her duties (as described in Agreement Section 1) primarily at Foster Wheeler Energy Limited’s
(“FWEL’s”) offices in Reading, England, subject to reasonable travel requirements consistent with the nature
of the Executive's duties from time to time on behalf of the Company. The Executive shall keep a residence within reasonable daily
commute of the Reading, England area throughout the Term.

 

		A-2.	Long-Term Incentive Awards.

 

Upon the Executive's
termination of employment (other than for Cause), all stock options outstanding as of the Executive's Termination Date shall remain
exercisable for the shorter of one (1) year following the Executive's termination of employment or the remainder of the term of
the stock option(s).

 

		A-3.	Miscellaneous Terms.

 

(a)          [Reserved.]

 

(b)          Supplemental
Long-Term Incentive Award. The parties acknowledge and agree that Executive previously received an award of restricted stock
units on a date designated by the Foster Wheeler AG Board of Directors or its Compensation Committee ("Compensation Committee")
during the first open trading window for Section 16 officers subsequent to May 4, 2010 (known as the "Grant Date") with
an economic value as of the Grant Date equal to USD $1,250,000. Such award vests ratably on the first, second, and third
anniversaries of the Grant Date. Restricted stock units that vest shall be settled by issuance of shares as provided in the grant
agreements described above, but in no event later than March 15 of the year following the year in which the restricted stock units
vest. For purposes of this Section, the number of restricted stock units granted to the Executive was consistent with the methodology
used for valuing restricted stock unit awards granted to employees which was approved and adopted by the Compensation Committee.
Such award was granted under the Company's Omnibus Incentive Plan and governed by separate agreements entered into between the
Executive and the Company or one of its affiliates, and in the event of any inconsistency between such separate agreements and
the terms of the Agreement (including, but not limited to, its Section 4 and this Amendment), the Agreement shall govern and control.
For avoidance of doubt, nothing in the preceding sentence shall be construed to limit the application of any provision of such
separate agreements that expressly refers to and incorporates a provision of this Agreement.

 

(c)          Assignment
Benefits. During the Term and so long as Executive is assigned to Reading, England, the Executive shall be entitled to the
following benefits ("Assignment Benefits"); all the benefits provided for in this Addendum are in addition to the perquisites
and other benefits provided for in the Agreement:

 

(i)          Relocation
Assistance: Effective as of the Amendment Effective Date, the following relocation assistance shall be provided:

 

(1)         The
Company will assist in obtaining the proper work permits and/or visas necessary for the provision of services in England and reimburse
the Executive for any work permit/visa, passport and immigration expenses, including expenses for dependents of the Executive relocating
or intending to relocate to England;

 

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(2)         The
cost of canceling work permits and/or visas that were obtained for the provision of services and/or residency in Switzerland for
the Executive and dependents of the Executive;

 

(3)         The
reasonable cost of any expenses (including penalty costs) related to the termination of Executive’s leases in Switzerland
for the Executive’s primary residence, car, mobile phone, satellite and/or cable subscription or similar expenses provided
the Executive cooperates with the Company and uses reasonable efforts to avoid and/or limit the expenses, if any, incurred in connection
with terminating such leases;

 

(4)         The
costs of any expenses related to Executive’s leases in Switzerland for the Executive’s primary residence and/or car
should such leases not be terminated by the Reading Move Date, provided Executive has used her best efforts to terminate such leases
by the Reading Move Date;

 

(5)         The
reasonable cost of temporary living expenses in either Switzerland or England for a period of one hundred twenty (120) days surrounding
the Reading Move Date and beginning on or after November 1, 2012;

 

(6)         The
reasonable costs of any duplicate housing and utilities costs for the rental of a primary residence in either Switzerland or England
for a period of one hundred twenty (120) days surrounding the Reading Move Date and beginning on or after November 1, 2012;

 

(7)         The
reasonable cost of storing household goods for a period of one hundred twenty (120) days from the date the Executive vacates Executive’s
primary residence in Switzerland, if required;

 

(8)         The
reasonable costs of packing and shipping household goods and automobiles, if applicable, from Switzerland to England and to one
other location, if required;

 

(9)         Reimbursement
for two (2) house hunting trips by the Executive and/or Executive’s spouse of up to four (4) days each, to include reasonable
lodging, transportation and meals;

 

(10)        The
cost of pet relocation, including transportation and kennel fees related to the move from Switzerland to England;

 

(11)        The
reasonable cost for the negotiation and/or leasing fees incurred by Executive in connection with the initial rental of Executive’s
primary residence in the Reading, England area. The Executive may use the services of FWEL’s relocation service provider
for such services; and

 

(12)        The
actual and reasonable cost of miscellaneous expenses not set forth above and incurred related to the relocation of Executive and/or
Executive’s dependents from Switzerland to England provided that Executive obtains the prior written approval of the Company’s
CEO before submitting such expense to the Company for reimbursement.

 

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(ii)         Settling-in
Allowance: A settling-in allowance of USD $30,000 shall be paid within thirty (30) days of the date of the Reading Move Date,
which settling-in allowance shall be paid in British Pounds, as converted using the exchange rate as of the date of payment.

 

(iii)        Assignment
Allowance: The Company shall pay the Executive a monthly allowance as set forth below. For purposes of this Section A-3(c)(iii),
the Second Period shall mean the period from the Amendment Effective Date through the Reading Move Date; and the Third Period shall
mean the first day immediately following the Second Period through the earlier of the Executive’s Termination Date or January
18, 2015.

 

	Allowance	 	Second Period	 	 	Third Period	 
	 	 	 	 	 	 	 
	(1)          Cost-of-living  allowance:	 	CHF	 2,940	(*)	 	£	2,061	 
	 	 	 	 	 	 	 	 	 
	(2)          Housing:	 	CHF	13,800	 	 	£	9,676	 
	 	 	 	 	 	 	 	 	 
	(3)          Transportation:	 	CHF	2,208	 	 	£	1,548	 
	 	 	 	 	 	 	 	 	 
	(4)          Utilities:	 	CHF	400	 	 	£	280	 
	 	 	 	 	 	 	 	 	 
	TOTAL	 	CHF	19,348	 	 	£	13,565	 

 

(*) This amount (CHF 2,940) assumes
the Executive’s immediately family has not relocated to Switzerland. The amount of the Executive’s Second Period Cost-of-living
allowance shall be CHF 5,341 if and when her immediate family relocates to Switzerland, which increased allowance would increase
her Second Period total allowance to CHF 21,749.

 

Through the Reading Move Date,
such allowances shall be payable in advance in Swiss Francs according to the Company's payroll practices. On and after the Reading
Move Date, such allowances shall be payable in British Pounds. The Company shall also provide for reasonable advances to the Executive
for the purpose of obtaining housing and satisfying other relocation expenses.

 

(iv)        Personal
Air Travel and Home Leave: Until the Executive’s immediate family relocates to England, (A) the Company shall provide
reimbursement for one (1) business-class round-trip ticket per month for personal travel between England and the U.S., (B) each
month, the Executive may use the business-class round trip ticket to instead fly one (1) family member from the U.S. to England,
(C) once per quarter, in lieu of the Executive’s trip to the U.S., the Company shall reimburse the cost of business-class
round-trip tickets for the Executive’s family to travel from the U.S. to England, and (D) the Executive may choose to work
from her home or Foster Wheeler office in the U.S. for up to one (1) week per month, it being understood and agreed that this subsection
(D) does not entitle the Executive to be reimbursed for air travel beyond what is set forth elsewhere in this Agreement, including
its subsection (A) above. For the avoidance of doubt, (A), (B) and (C) include reimbursement of associated local ground expenses.
If and after the Executive’s immediate family relocates to England, (X) the Company shall reimburse the Executive for one
(1) trip per twelve (12) months per authorized dependent and for the Executive, (Y) expenses eligible for reimbursement include
a business-class airline ticket and local ground expenses to the original point of origin and (Z) one (1) day of travel shall be
permitted each way as additional vacation.

 

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(v)         Vacation
and Holidays: The Executive's paid time off shall be consistent with that currently provided. United Kingdom public holidays
shall be established by the Company.

 

(vi)        Continued
Medical Coverage. To the extent U.S. medical coverage is not available in England, the Company shall pay for the cost of securing
substantially similar coverage in England for the Executive and the Executive's eligible dependents. Eligible dependents of the
Executive shall continue to maintain medical coverage irrespective of their relocation to England.

 

(vii)       Tax
Equalization.  Under tax equalization, the Executive's obligation for income taxes shall not exceed the amount of income
tax calculated each year on Base Salary, short-term annual pay and long-term incentive pay applying the U.S. tax rules without
taking into consideration any foreign tax credit.  Such amount will be deducted from the Executive's paycheck.  Should
additional income taxes arise in the U.S., Switzerland, or the United Kingdom as a result of an assignment by the Company, the
Company shall pay the additional tax.  The Executive may choose, as an alternative to the U.S. tax equalization program, to
be personally responsible for the Swiss or United Kingdom, as the case may be, income tax on the Executive's Base Salary, short-term
incentive pay and long-term incentive pay.  In addition to the tax equalization on the compensation above, the Executive will
be reimbursed for any wealth tax due in Switzerland or the United Kingdom as a result of an assignment by the Company.

 

(viii)      Tax
Preparation Services:  The Company shall retain the services of a tax consultant to prepare the Executive's U.S., Swiss
and/or United Kingdom tax returns, as required and as related to an assignment by the Company.

 

(ix)         Tax
Gross-Up.  To the extent that the provision of Assignment Benefits (for the avoidance of doubt, including, without limit,
those related to the assignment to Switzerland) results in taxable income to the Executive, the Company shall pay the Executive
an amount to satisfy the Executive's Swiss, United Kingdom and U.S. income tax obligation.  Such payment shall be grossed-up
for taxes and made as soon as practicable after the tax liability arises, but in no event later than the end of the year following
the year in which the tax is due.

 

(x)          Seconded
Arrangement: The Executive shall be seconded to FWEL in Reading, England or such other affiliate of the Company as determined
by the Company and shall continue to remain an employee of the Company. The Executive remains eligible to participate in the Company's
employee benefit plans as set forth in Section 3 of the Agreement and to receive U.S. social security benefits.

 

(xi)         Legal
Services. The Company shall reimburse the Executive for legal fees incurred in relation to an attorney's review of this Amendment,
up to a maximum of USD $5,000.

 

(xii)        Financial/Estate
Planning. The Company shall reimburse the Executive for one-time costs relating to the Executive's financial and estate planning,
such reimbursement to be for such one-time costs incurred during either the assignment to Switzerland or the assignment to England.

 

(xiii)       Compassionate
Leave: The Executive shall be provided with up to five (5) days' paid compassionate leave in relation to the death of an immediate
family member. The Company shall reimburse the Executive and her dependents for the cost of round-trip business airline tickets
to attend funeral services.

 

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(d)          Termination
of Employment. Effective as of the Amendment Effective Date, if the Executive's employment is terminated for any reason, the
terms of Agreement Section 4 (including the amendments to same set forth in this Amendment) shall control; provided, that the relocation
to England shall not constitute an event giving rise to a termination of employment for Good Reason and further provided that after
the Reading Move Date any further relocation for purposes of Section 4.1.2(iv) of the Agreement (Termination; For Good Reason by
the Executive) shall be calculated using Reading, England as the Executive’s principal business location. If the termination
is for any reason other than for Cause or a resignation by the Executive without Good Reason, the Company shall pay the reasonable
costs associated with the repatriation to the U.S, provided, further, that if (i) the Company and the Executive cannot find a mutually
satisfactory agreement related to employment terms and conditions applicable after January 18, 2015, (ii) the Executive resigns
without Good Reason, and (iii) the Executive notifies the Company of the Executive’s intention to resign under the conditions
set forth in (i) and (ii) of this sentence by the earlier of (A) April 17, 2015, or (B) the day the Executive notifies the Company
of the Executive’s intention to resign under the conditions set forth in (i) and (ii) of this sentence, then the Company
shall pay to the Executive the reasonable costs associated with the repatriation to the U.S.

 

		A-4.	Maximum Length of Assignment.

 

For the avoidance of
doubt, the maximum period of time during which the Executive may be considered to be "on assignment" and, therefore,
eligible for assignment-related compensation and Assignment Benefits is through January 18, 2015.

 

		A-5.	Application of Section 409A to Benefits-in-Kind, Expense Reimbursements and Allowances.

 

(a)          Benefits-in-Kind;
Expense Reimbursements. Benefits-in-kind and any provision for reimbursement of expenses during the Executive's assignment
shall be subject to the following rules, as required to comply with Code Section 409A:

 

(i)          The
amount of in-kind benefits provided or expenses eligible for reimbursement in one (1) calendar year may not affect in-kind benefits
or reimbursements to be provided in any other calendar year.

 

(ii)         Expenses
will be reimbursed as soon as administratively possible, but in no event shall expenses be reimbursed later than December 31st
of the year following the year in which the expense was incurred.

 

(iii)        The
right to an in-kind benefit or reimbursement may not be subject to liquidation or exchange for another benefit.

 

(b)          Allowances.
Allowances generally shall be paid monthly. In no event shall the payment of any allowance be made later than March 15th
of the year following the year in which the Executive is entitled to payment.

 

		2.	Counterparts. This Amendment may be executed in two (2) or more counterparts, each
of which shall be deemed to be an original but all of which together will constitute one (1) and the same instrument.

 

[Signature Page Follows]

 

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

 

	 	FOSTER WHEELER INC.
	 	 	 
	 	By:	/s/ J. Kent Masters
	 	Name:	J. Kent Masters
	 	Title:	President & CEO
	 	 	 
	 	  By:	/s/ Beth B. Sexton
	 	 	BETH B. SEXTON

 

    	7SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase
Agreement (this “Agreement”) is dated as of _____________, 2012, by and between NewBridge Bancorp, a North Carolina
corporation (the “Company”), and the purchaser identified on the signature page hereto (including its successors and
assigns, the “Purchaser”). The Purchaser and all other purchasers entering into Securities Purchase Agreements in the
same form as this Agreement concurrently herewith are collectively referred to herein as the “Purchasers.”

 

RECITALS

 

A.           The
Company and the Purchaser are executing and delivering this Agreement in reliance upon the exemption from securities registration
afforded by Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506
of Regulation D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission
(the “Commission”) under the Securities Act. Each other Purchaser and the Company shall enter into a Securities
Purchase Agreement in the same form (collectively, the “Other Purchase Agreements”).

 

B.           The
Purchaser desires to purchase, and the Company desires to sell, upon the terms and conditions stated in this Agreement, (i) that
aggregate number of shares of the Company’s Series B mandatorily convertible cumulative perpetual preferred stock, $100.00
liquidation preference per share (the “Series B Preferred Shares”), set forth below the Purchaser’s name
on the signature page of this Agreement and (ii) that aggregate number of shares of the Company’s Series C mandatorily convertible
cumulative perpetual preferred stock, $100.00 liquidation preference per share (the “Series C Preferred Shares”),
set forth below the Purchaser’s name on the signature page of this Agreement. The Series B Preferred Shares and the Series
C Preferred Shares described below are collectively referred to herein as the “Preferred Shares.”  When
purchased, the Preferred Shares will have the preferences, limitations, relative rights and privileges set forth in the Articles
of Amendment to the Articles of Incorporation in the form attached as Exhibit A hereto (the “Articles of Amendment”)
made a part of the Articles of Incorporation by the filing of the Articles of Amendment with the North Carolina Secretary of State
(the “North Carolina Secretary”).  The Series B Preferred Shares and the Series C Preferred Shares,
respectively, will convert into shares of the Class A Common Stock and shares of Class B Common Stock, respectively, subject to
and in accordance with the terms and conditions of the Articles of Amendment.

 

C.           The
Purchasers are purchasing, in the aggregate, 424,292 Series B Preferred Shares and 132,924 Series C Preferred Shares pursuant to
this Agreement and the Other Purchase Agreements.

 

D.           The
conversion of the Series B Preferred Shares into Class A Common Stock and of the Series C Preferred Shares into Class B Common
Stock is referred to herein as the “Stock Conversion.”

 

    	 

    	 

    

 

F.           Contemporaneously
with the execution and delivery of this Agreement, the Company and the Purchaser shall execute and deliver a Registration Rights
Agreement, substantially in the form attached hereto as Exhibit B (the “Registration Rights Agreement”),
pursuant to which, among other things, the Company will agree to provide certain registration rights with respect to the Securities
under the Securities Act and the rules and regulations promulgated thereunder and applicable state securities laws.

 

G.           The
Company has engaged Keefe, Bruyette & Woods, Inc. and FIG Partners, L.L.C. as its exclusive placement agents (the “Placement
Agents”) for the offering of the Preferred Shares.

 

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

 

ARTICLE I.

 

DEFINITIONS

 

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

 

“Absence of Required
Approvals” has the meaning set forth in Section 5.1(k).

 

“Action”
means any action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition) or investigation
against the Company, any Subsidiary or any of their respective properties or any officer, director or employee of the Company or
any Subsidiary acting in his or her capacity as an officer, director or employee before or by any Governmental Entity.

 

“Affiliate”
means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, Controls,
is Controlled by or is under Common Control with such Person or that would otherwise be considered an “affiliate” as
that term is used in Section 2(k) of the BHC Act. For purposes of this Agreement only, with respect to the Purchaser, any investment
fund or managed account that is managed or advised on a discretionary basis by the same investment manager or investment adviser
as the Purchaser will be deemed to be an Affiliate of the Purchaser. For purposes of this Agreement, the Company and the Purchaser
shall not be deemed Affiliates of one another.

 

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

 

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

 

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

 

“Articles of
Incorporation” means the Articles of Incorporation, as amended, of the Company and all amendments thereto, as the same may
be amended from time to time.

 

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“Bank”
means the Company’s wholly owned subsidiary, NewBridge Bank, a North Carolina banking corporation.

 

“Bank Board”
has the meaning set forth in Section 4.17(a).

 

“Benefit Plans”
has the meaning set forth in Section 3.1(p).

 

“BHC Act”
means the Bank Holding Company Act of 1956, as amended.

 

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

 

“Burdensome Condition”
has the meaning set forth in Section 5.1(l).

 

“Budgets”
has the meaning set forth in Section 4.24.

 

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

 

“Buy-In”
has the meaning set forth in Section 4.1(e).

 

“Buy-In Price”
has the meaning set forth in Section 4.1(e).

 

“Capitalization
Date” has the meaning set forth in Section 3.1(g).

 

“Capitalization
Update” has the meaning set forth in Section 3.1(g).

 

“Change in Bank
Control Act” means the Change in Bank Control Act of 1978, as amended.

 

“Class A Common
Stock” means the class of the Company’s Common Stock to be established following receipt of the Shareholder Approvals
and the filing with the North Carolina Secretary of the Common Stock Articles of Amendment, which class shall have unlimited voting
rights and share pro rata with all other classes of Common Stock in the net assets of the Company upon dissolution.

 

“Class B Common
Stock” means the class of the Company’s Common Stock to be established following receipt of the Shareholder Approvals
and the filing with the North Carolina Secretary of the Common Stock Articles of Amendment, which class shall have no voting rights,
except as specifically required by law, and shall share pro rata with all other classes of Common Stock in the net assets of the
Company upon dissolution.

 

“Closing”
means the closing of the purchase and sale of the Preferred Shares pursuant to this Agreement and the simultaneous closing of the
purchases and sales of the Preferred Shares pursuant to the Other Purchase Agreements between the Company and the other Purchasers.

 

“Closing Date”
means the Trading Day on which the Closing occurs.

 

“Closing Press
Release” has the meaning set forth in Section 4.5.

 

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“Code”
means the Internal Revenue Code of 1986, as amended, and the Treasury Regulations.

 

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

 

“Common Stock”
means the currently authorized common stock, $5.00 par value per share, of the Company, and upon and following the Stock Conversion,
the Class A Common Stock and the Class B Common Stock.

 

“Common Stock
Articles of Amendment” means the Articles of Amendment to the Articles of Incorporation attached hereto as Exhibit C.

 

“Company Counsel”
means Brooks, Pierce, McLendon, Humphrey & Leonard, LLP.

 

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

 

“Company Employees”
has the meaning set forth in Section 3.1(p).

 

“Company Financial
Statements” has the meaning set forth in Section 3.1(i).

 

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

 

“Company Options”
has the meaning set forth in Section 3.1(g).

 

“Company Preferred
Stock” has the meaning set forth in Section 3.1(g).

 

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

 

“Company Restricted
Stock Units” has the meaning set forth in Section 3.1(g).

 

“Company Specified
Representations” means the representations and warranties made in Sections 3.1(a), 3.1(c), 3.1(d), 3.1(e), 3.1(f), 3.1(g),
3.1(k), 3.1(m), 3.1(n), 3.1(cc) and 3.1(dd).

 

“Control”
(including the terms “Controlling”, “Controlled by” or “under Common Control with”) means the
possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise, as such concepts are used and construed under Rule 405 under
the Securities Act.

 

“CRA” has
the meaning set forth in Section 3.1(gg).

 

“De Minimis Amount”
has the meaning set forth in Section 4.7(b).

 

“Deductible”
has the meaning set forth in Section 4.7(b).

 

“Designated Director”
has the meaning set forth in Section 4.17(a).

 

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

 

    	4

    	 

    

 

“Disclosure Schedule”
shall mean a schedule delivered, on or prior to the date of this Agreement, by the Company to the Purchaser setting forth, among
other things, items the disclosure of which is necessary or appropriate either in response to an express disclosure requirement
contained in a provision hereof or as an exception to one or more representations or warranties contained in Section 3.1 with respect
to the Company or the Bank.

 

“DTC” means
The Depository Trust Company.

 

“Effective Date”
means the date on which the initial Registration Statement required by the terms of the Registration Rights Agreement is first
declared effective by the Commission.

 

“______________”
means ______________.

 

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

 

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

 

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

 

“FDIC”
means the Federal Deposit Insurance Corporation.

 

“Federal Reserve”
means the Board of Governors of the Federal Reserve System and any Federal Reserve Bank exercising authority delegated therefrom.

 

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

 

“Governmental
Entity” means any court, arbitrator, governmental or administrative agency or commission, regulatory authority or other governmental
authority or instrumentality, whether federal, state, local or foreign, and any applicable industry self-regulatory organization
or securities exchange (including the Principal Trading Market).

 

“HSR Act”
means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

 

“Indemnified
Party” has the meaning set forth in Section 4.9(a).

 

“Indemnifying
Party” has the meaning set forth in Section 4.9(a).

 

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

 

“Knowledge”
means the actual knowledge of the President and Chief Executive Officer, the Chief Financial Officer, the Senior Executive Vice
Presidents or Chief Risk Officer of the Company and/or the Bank.

 

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

 

    	5

    	 

    

 

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

 

“Losses”
means any and all losses, damages, reasonable costs, reasonable expenses (including reasonable attorneys’ fees and disbursements),
liabilities, settlement payments, awards, judgments, fines, obligations, claims, and deficiencies of any kind, but excluding special,
consequential, exemplary and punitive damages.

 

“Material Adverse
Effect” means, with respect to the Company, any change, circumstance or effect, individually or in the aggregate, that (i)
is, or is reasonably expected to be, materially adverse to the business, results of operations, prospects, or condition (financial
or otherwise), of the Company and its Subsidiaries taken as a whole, or (ii) has impaired, or is reasonably expected to impair
or delay, materially the ability of the Company to perform its obligations under this Agreement or to consummate the Closing; provided,
however, in determining whether a Material Adverse Effect has occurred, there shall be excluded any effect to the extent resulting
from the following:   (A) changes, after the date hereof, in GAAP or regulatory accounting requirements applicable
to financial institutions generally, except to the extent such change disproportionately adversely affects the Company and its
Subsidiaries taken as a whole compared to other similar financial institutions generally, (B) changes, after the date hereof,
in laws of general applicability or interpretations thereof by courts or governmental authorities, except to the extent such change
disproportionately adversely affects in a material manner the Company and its Subsidiaries taken as a whole compared to other similar
financial institutions generally, (C) actions or omissions by the Company taken with the prior written permission of the other
party or upon the recommendation of the other party or required under this Agreement, (D)  the imposition and announcement
of any regulatory enforcement action by the FDIC and the NCCOB as to Bank and by the Federal Reserve as to Company to the extent
such matters were disclosed on Section 3.1(ii) of the Disclosure Schedule as of the date of this Agreement, or (E) changes, after
the date hereof, in global or national or regional political conditions (including the outbreak of war or acts of terrorism) or
in general or regional economic or market conditions affecting financial institutions or their holding companies generally except
to the extent that any such changes in general or regional economic or market conditions have a disproportionate adverse effect
on the Company and its Subsidiaries taken as a whole compared to other similar financial institutions generally.

 

“Material Contract”
means any contract, agreement or understanding of the Company or any Subsidiary that has been, or was required to be, filed as
an exhibit (or incorporated by reference) to the SEC Reports on file as of the date of this Agreement pursuant to Item 601 of Regulation
S-K or identified as a material definitive agreement in a Form 8-K on file as of the date of this Agreement.

 

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

 

“New Securities”
has the meaning set forth in Section 4.19(a).

 

“NCCOB”
means the North Carolina Commissioner of Banks.

 

    	6

    	 

    

 

“North Carolina
Courts” means the state and federal courts sitting in the State of North Carolina.

 

“North Carolina
Secretary” has the meaning set forth in the Recitals.

 

“Observer”
has the meaning set forth in Section 4.17(e).

 

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

 

“Organizational
Documents” means the charter, articles of incorporation, articles of association, operating agreement, partnership agreement
trust agreement, and bylaws, or other similar organizational or operating documents, as applicable, pursuant to which a non-natural
Person was formed or by which it is governed.

 

“Other Purchase
Agreements” has the meaning set forth in the Recitals.

 

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

 

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

 

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

 

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

 

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

 

“Press Release”
has the meaning set forth in Section 4.5.

 

“Previously Disclosed”
means (i) information set forth on the Company’s Disclosure Schedule corresponding or responsive to the provision of this
Agreement to which such information relates; provided, however, that if such information is disclosed in such a way as to make
its relevance or applicability to another provision of this Agreement reasonably apparent on its face, such information shall be
deemed to be responsive to such other provision of this Agreement, and (ii) information publicly disclosed by the Company in (A)
the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011, as filed by it with the Commission
on March 22, 2012, (B) the Company’s Proxy Statement on Schedule 14A, as filed by it with the Commission on April 9, 2012,
(C) the Company’s Forms 10-Q for the interim periods ended March 31, 2012 and June 30, 2012; or (D) any Current Report on
Form 8-K filed or furnished by it with the Commission since January 1, 2012, in each case available prior to the date of this Agreement
(excluding any risk factor disclosures contained in such documents under the heading “Risk Factors” and any disclosure
of risks included in any “forward-looking statements” disclaimer or other statements that are similarly non-specific
and are predictive or forward-looking in nature). Notwithstanding anything in this Agreement to the contrary, the mere inclusion
of an item in a Disclosure Schedule shall not be deemed an admission that such item represents a material exception or material
fact, event or circumstance or that such item has had or would reasonably be expected to have a Material Adverse Effect.

 

    	7

    	 

    

 

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

 

“Primary Investors”
has the meaning set forth in Section 4.23.

 

“Pro Forma Basis”
means the aggregate total of all outstanding shares of the Company’s Class A Common Stock as of the date of the relevant
calculation after giving effect to the transactions described herein, including the filing of the Common Stock Articles of Amendment
and the Stock Conversion, but excluding from such total any issuance of shares of Class A Common Stock pursuant to the TARP Warrant
or any Company Option or award of Company Restricted Stock Units (rounded down to the nearest whole share).

 

“Proxy Statement”
has the meaning set forth in Section 4.14(b).

 

“Purchase Price”
means $100.00 per Series B Preferred Share and $100.00 per Series C Preferred Share.

 

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

 

“Purchaser Indemnified
Party” has the meaning set forth in Section 4.7(a).

 

“Purchaser Specified
Representations” means the representations and warranties made in Sections 3.2(a), 3.2(o) and 3.2(p).

 

“Qualifying Ownership
Interest” has the meaning set forth in Section 4.17(b).

 

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

 

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

 

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

 

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

 

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

 

“Sanctions”
has the meaning set forth in Section 3.1(ff).

 

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

 

    	8

    	 

    

 

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

 

“Securities”
means the Preferred Shares and the Underlying Shares.

 

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

 

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

 

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

 

“Shareholder
Approvals” has the meaning set forth in Section 4.14(a).

 

“Shareholder
Proposals” has the meaning set forth in Section 4.14(a).

 

“Signing Press
Release” has the meaning set forth in Section 4.5.

 

“Special Meeting”
has the meaning set forth in Section 4.14(a).

 

“Stock Certificates”
has the meaning set forth in Section 2.2(a)(ii).

 

“Stock Conversion”
has the meaning set forth in the Recitals.

 

“Subscription
Amount” means the aggregate amount to be paid by the Purchaser for the Preferred Shares purchased hereunder as indicated
on the Purchaser’s signature page to this Agreement under the heading “Aggregate Purchase Price (Subscription Amount)”.

 

“Subsidiary”
means any non-natural Person (A) in which the Company, directly or indirectly, owns sufficient capital stock or holds a sufficient
equity or similar interest such that it is consolidated with the Company in the consolidated financial statements of the Company,
or (B)  that is otherwise a “Subsidiary” of the Company as such term is defined in Section 2(d) or the BHC Act.

 

“TARP Agreement”
means the letter agreement and the Securities Purchase Agreement – Standard Terms between the Company and the Treasury, dated
December 12, 2008.

 

“TARP Preferred
Stock” has the meaning set forth in Section 3.1(g).

 

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

 

“Tax” or
“Taxes” means all United States federal, state, local or foreign income, profits, estimated, gross receipts, windfall
profits, severance, property, intangible property, occupation, production, sales, use, license, excise, emergency excise, franchise,
capital gains, capital stock, employment, withholding, transfer, stamp, payroll, goods and services, value added, alternative or
add-on minimum tax, or any other tax, custom, duty or governmental fee, or other like assessment or charge of any kind whatsoever,
together with any interest, penalties, fines, related liabilities or additions to tax that may become payable in respect thereof
imposed by any Governmental Entity, whether or not disputed.

 

    	9

    	 

    

 

“Tax Benefit”
means net operating loss carryovers, capital loss carryovers, general business credit carryovers, alternative minimum tax credit
carryovers and foreign tax credit carryovers, as well as any potential loss or deduction attributable to an existing “net
unrealized built-in loss” within the meaning of Section 382 of the Code. 

 

“Tax Return”
means any return, declaration, report or similar statement required to be filed with respect to any Taxes (including any attached
schedules), including, without limitation, any information return, claim or refund, amended return and declaration of estimated
Tax.

 

“Third Party
Claim” has the meaning set forth in Section 4.9(a).

 

“Trading Day”
means (i) a day on which the Common Stock is listed or quoted and traded on its Principal Trading Market (other than the OTC
Bulletin Board), or (ii) if the Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day
on which the Common Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the
Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted in any over-the-counter market; provided,
that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading
Day shall mean a Business Day.

 

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

 

“Transaction
Documents” means this Agreement, the schedules and exhibits attached hereto, the Other Purchase Agreements, the Articles
of Amendment, the Common Stock Articles of Amendment, the Registration Rights Agreement, and any other documents or agreements
executed in connection with the transactions contemplated hereunder.

 

“Transfer Agent”
means Computershare Trust Company, N.A., or any successor transfer agent for the Company.

 

“Treasury”
means the United States Department of the Treasury.

 

“Treasury Regulations”
means the regulations promulgated by the Treasury under the Code.

 

“Underlying Shares”
means the shares of Class A Common Stock and the shares of Class B Common Stock into which the Series B Preferred Shares and Series
C Preferred Shares, respectively, will convert, in each case subject to and in accordance with the Articles of Amendment and the
Common Stock Articles of Amendment.

 

“USA PATRIOT
ACT” has the meaning set forth in Section 3.1(gg).

 

“Voting Debt”
has the meaning as set forth in Section 3.1(g).

 

    	10

    	 

    

 

“______________ Purchaser”
means a Purchaser advised by ______________.

 

ARTICLE II.

 

PURCHASE AND SALE

 

2.1          Closing.

 

(a)          Purchase
of Preferred Shares.  Subject to the terms and conditions set forth in this Agreement, at the Closing the Company
shall issue and sell to the Purchaser, and the Purchaser shall purchase from the Company, (i) the number of Series B Preferred
Shares set forth below the Purchaser’s name on the signature page of this Agreement at a per share price equal to the Purchase
Price and (ii) the number of Series C Preferred Shares set forth below the Purchaser’s name on the signature page of this
Agreement at a per share price equal to the Purchase Price.

 

(b)          Closing.  The
Closing of the purchase and sale of the Preferred Shares shall take place at the offices of Brooks, Pierce, McLendon, Humphrey
& Leonard, LLP, 230 N. Elm Street, Suite 2000, Greensboro, NC 27401, on the Closing Date or at such other locations or remotely
by facsimile transmission or other electronic means as the parties may mutually agree and shall occur no later than the fifth (5th)
Business Day following the date on which the conditions to closing set forth in Article V are satisfied (other than those conditions
that by their nature are to be satisfied at Closing but subject to the fulfillment or waiver of those conditions).

 

(c)          Delivery
and Payment.   At the Closing, (i) the Company shall deliver to the Purchaser the number of Preferred Shares set
forth below the Purchaser’s name on the signature page of this Agreement (either in certificated form or book-entry, as the
Purchaser and the Company shall agree) and (ii) the Purchaser shall deliver the Subscription Amount in immediately available funds
by wire transfer to the Company as follows:

 

	 	ABA Routing Number:	#########
	 	Beneficiary:	NewBridge Bancorp
	 	Account #:	#######
	 	Attn:	Kenneth Banner, Secretary/Treasurer

 

Notwithstanding anything
to the contrary set forth herein, a ______________ Purchaser shall not be required to wire its Subscription Amount until it (or its
designated custodian per its delivery instructions) confirms receipt of its Preferred Shares.

 

2.2          Closing
Deliveries.

 

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

 

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

 

    	11

    	 

    

 

(ii)         one
or more stock certificates (if physical certificates are required by the Purchaser; provided, however, that facsimile or “.pdf”
copies of such certificates shall suffice for purposes of Closing with the original stock certificates to be delivered within three
(3) Business Days of the Closing Date), evidencing the Preferred Shares subscribed for by the Purchaser, registered in the name
of the Purchaser or as otherwise set forth on the Investor Questionnaire of the Purchaser included as Exhibit D hereto,
(the “Stock Certificates”) (or, if the Company and the Purchaser agree, the Company shall cause to be made a
book-entry record through the facilities of DTC representing the Preferred Shares registered in the name of the Purchaser or as
otherwise set forth on the Investor Questionnaire);

 

(iii)        a
legal opinion of the Company Counsel, dated as of the Closing Date and in the form attached hereto as Exhibit E, executed
by a partner of the Company Counsel and addressed to the Purchaser;

 

(iv)        a
certificate of the Secretary of the Company, in the form attached hereto as Exhibit F (the “Secretary’s Certificate”),
dated as of the Closing Date, certifying (a) the resolutions adopted by the Board approving the transactions contemplated by this
Agreement and the other Transaction Documents and the issuance of the Securities, (b) the current versions of the Articles
of Incorporation and By-Laws, as amended, of the Company and (c) as to the signatures and authority of natural Persons signing
the Transaction Documents and related documents on behalf of the Company;

 

(v)         the
Compliance Certificate referred to in Section 5.1(g);

 

(vi)        certificates
of existence of each of the Company and the Bank issued by the North Carolina Secretary as of a date within five (5) Business Days
of the Closing Date;

 

(vii)       evidence
of the acceptance of the Company’s filing of the Articles of Amendment by the North Carolina Secretary; and

 

(viii)      the
Registration Rights Agreement duly executed by the Company.

 

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

 

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

 

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

 

(iii)        a
fully completed and duly executed Investor Questionnaire, in the form attached hereto as Exhibit D; and

 

(iv)        the
Registration Rights Agreement duly executed by the Purchaser.

 

    	12

    	 

    

 

ARTICLE III.

 

REPRESENTATIONS AND WARRANTIES

 

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

 

(a)          Organization
and Qualification.  The Company and each of its Subsidiaries is an entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the jurisdiction of its organization, with the requisite power and authority
to own or lease and use its properties and assets and to carry on its business as currently conducted.  Neither the Company
nor any Subsidiary is in violation of any of the provisions of its respective Organizational Documents.  The Company
and each of its Subsidiaries is duly qualified to conduct business and is in good standing in each jurisdiction in which the nature
of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified
or in good standing, as the case may be, has not had and would not have a Material Adverse Effect.  The Company is duly
registered as a bank holding company under the BHC Act.  The Bank is the only Subsidiary of the Company engaged in the
business of commercial banking. The Bank’s deposit accounts are insured up to applicable limits by the FDIC, and all premiums
and assessments required to be paid in connection therewith have been paid when due.

 

(b)          Subsidiaries.  The
Company has Previously Disclosed all of its direct or indirect Subsidiaries. Except for FNB Financial Services Capital Trust I
the Company owns, directly or indirectly, all of the capital stock or comparable equity interests of each such Subsidiary free
and clear of any and all Liens, and all the issued and outstanding shares of capital stock or comparable equity interest of each
Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or
purchase securities.

 

(c)          Authorization;
Enforcement; Validity.  The Company has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by each of the Transaction Documents to which it is a party and otherwise to carry out its obligations
hereunder and thereunder, including, without limitation, to issue the Preferred Shares, in accordance with the terms hereof and
thereof and the Articles of Amendment, and, subject to Shareholder Approvals, to issue the Underlying Shares in accordance with
the Articles of Amendment and the Common Stock Articles of Amendment. The Company’s execution and delivery of each of the
Transaction Documents to which it is a party and the consummation by it of the transactions contemplated hereby and thereby (including,
but not limited to, the sale and delivery of the Preferred Shares and the Underlying Shares) have been duly authorized by all necessary
corporate action on the part of the Company, and no further corporate action is required by the Company, its Board or its shareholders
in connection therewith other than receipt of the Shareholder Approvals. Each of the Transaction Documents to which it is a party
has been (or upon delivery will have been) duly executed by the Company and is, or when delivered in accordance with the terms
hereof or thereof, will constitute the legal, valid and binding obligation of the Company enforceable against the Company in accordance
with its terms, except (i) as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application, (ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies, (iii) insofar as indemnification and contribution provisions relating to liabilities
under securities laws may be limited by applicable law, and (iv) to the extent that receipt of the Shareholder Approvals is a condition
precedent thereto. Except for the TARP Agreement, there are no shareholder agreements, voting agreements, or other similar arrangements
with respect to the Company’s capital stock to which the Company is a party or, to the Company’s Knowledge, between
or among other Persons.

 

    	13

    	 

    

 

(d)          No
Conflicts.  Subject to receipt of the Shareholder Approvals with respect to (and only with respect to) the issuance
of the Underlying Shares, the execution, delivery and performance by the Company of the Transaction Documents to which it is a
party and the consummation by the Company of the transactions contemplated hereby or thereby (including, without limitation, the
issuance of the Preferred Shares and the Underlying Shares) do not and will not (i) conflict with or violate any provisions
of the Organizational Documents of the Company or any Subsidiary, (ii)  conflict with, or constitute a default (or an event
that with notice or lapse of time or both would result in a default) under, result in the creation of any Lien upon the Preferred
Shares, the Underlying Shares or any of the properties or assets of the Company or any Subsidiary or give to others any rights
of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any Material Contract,
or (iii) subject to the existence of the Absence of Required Approvals, conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any Governmental Entity to which the Company is subject
or by which any property or asset of the Company is bound or affected, except in the case of clauses (ii) and (iii) such
as would not have or reasonably be expected to have a Material Adverse Effect.

 

(e)          Filings,
Consents and Approvals.  Neither the Company nor any of its Subsidiaries is required to obtain any consent, waiver,
authorization or order of, give any notice to, or make any filing or registration with, any Governmental Entity or other Person
in connection with the execution, delivery and performance by the Company of the Transaction Documents (including, without limitation,
the issuances of the Preferred Shares and the Underlying Shares), other than (i) with respect to the filing of the Common Stock
Articles or Amendment, obtaining the Shareholder Approvals; (ii) the filing of the Articles of Amendment and, following receipt
of the Shareholder Approvals, the filing of the Common Stock Articles of Amendment with the North Carolina Secretary, (iii) the
filing with the Commission of one or more Registration Statements in accordance with the requirements set forth in the Registration
Rights Agreement, (iv) filings required by applicable state securities laws, (v) the filing of a Notice of Exempt Offering
of Securities on Form D with the Commission under Regulation D of the Securities Act, and (vi) the filing of any
requisite notices and/or application(s) to the Principal Trading Market for the issuance and sale of the Class A Common Stock and
the listing of the Class A Common Stock for trading or quotation, as the case may be, thereon in the time and manner required thereby.

 

    	14

    	 

    

 

(f)          Issuances
of the Securities.  The issuance of the Preferred Shares has been duly authorized and the Preferred Shares, when
issued and paid for in accordance with the terms of the Transaction Documents, will be duly and validly issued, fully paid and
non-assessable and free and clear of all Liens, other than restrictions on transfer provided for in the Transaction Documents or
imposed by applicable securities laws, and shall not be subject to preemptive or similar rights.  The Underlying Shares,
upon receipt of the Shareholder Approvals and when issued in the Stock Conversion in accordance with the terms of the Articles
of Amendment and the Common Stock Articles of Amendment, will be duly and validly issued, fully paid and non-assessable and free
and clear of all Liens, other than restrictions on transfer provided for in the Transaction Documents or imposed by applicable
securities laws, and shall not be subject to preemptive or similar rights.  Assuming the accuracy of the representations
and warranties of all the Purchasers to the Company, the Securities will be issued in compliance with all applicable federal and
state securities laws.

 

    	15

    	 

    

 

 

(g)          Capitalization.  As
of the date hereof, the authorized capital stock of the Company consists of (i) 50,000,000 shares of Common Stock, par value $5.00
per share, and (ii) 10,000,000 shares of preferred stock, par value $.01 per share (the “Company Preferred Stock”),
52,372 shares of which has been designated as “Fixed Rate Cumulative Perpetual Preferred Stock, Series A” (the “TARP
Preferred Stock”). As of the date hereof (the “Capitalization Date”), there were 15,655,868 shares
of Common Stock outstanding and 52,372 shares of TARP Preferred Stock, and no other Company Preferred Stock outstanding. In addition,
the Treasury holds a warrant, dated December 12, 2008, to purchase 2,567,255 shares of Common Stock at an exercise price of $3.06
per share (the “TARP Warrant”). As of the Closing Date, the authorized capital stock of the Company shall be
as set forth in Section 3.1(g) of the Disclosure Schedule (the “Capitalization Update”). As of the Closing Date,
the authorized and issued capital stock of the Company, and the percentage ownership of each Purchaser, in each case shall be as
set forth on Section 3.1(g) of the Disclosure Schedule. Since the Capitalization Date, except in connection with the Transaction
Documents and the transactions contemplated hereby and thereby, all as set forth on the Capitalization Update, and except as Previously
Disclosed in Section 3.1(g) of the Disclosure Schedule, the Company has not (i) issued or authorized the issuance of any shares
of Common Stock or Company Preferred Stock, or any securities convertible into or exchangeable or exercisable for shares of Common
Stock or Company Preferred Stock, (ii) reserved for issuance any shares of Common Stock or Company Preferred Stock or (iii) repurchased
or redeemed, or authorized the repurchase or redemption of, any shares of Common Stock or Company Preferred Stock. As of the close
of business on the Capitalization Date, other than pursuant to the Benefit Plans in respect of which an aggregate of 1,729,350
shares of Common Stock have been reserved for issuance and 2,567,255 shares of Common Stock reserved for issuance pursuant to the
TARP Warrant, no shares of Common Stock or Company Preferred Stock were reserved for issuance. All of the issued and outstanding
shares of Common Stock and Company Preferred Stock have been duly authorized and validly issued and are fully paid, nonassessable
and free of preemptive rights. None of the outstanding shares of Common Stock, Company Preferred Stock or other securities of the
Company or any of the Subsidiaries was issued, sold or offered by the Company or any Subsidiary in violation of the Securities
Act or the securities or blue sky laws of any state or jurisdiction, or any applicable securities laws in the relevant jurisdictions
outside of the United States. No bonds, debentures, notes or other indebtedness having the right to vote on any matters on which
the shareholders of the Company may vote (“Voting Debt”) are issued and outstanding. Section 3.1(g) of the Disclosure
Schedule sets forth the following information with respect to each outstanding option to purchase shares of Common Stock (a “Company
Option”) or restricted stock award covering shares of Common Stock (or other right (or unit) covering shares of Common
Stock) (“Company Restricted Stock Unit”) under the Benefit Plans: (A) the name of each holder of Company Options
or Company Restricted Stock Unit; (B) the number of shares of Common Stock subject to such Company Option or the number of shares
covering Company Restricted Stock Units held by such holder, and as applicable for each Company Option or Company Restricted Stock
Unit, the date of grant, the exercise or reference price, the number of shares vested or not otherwise subject to repurchase rights,
the vesting schedule or schedule providing for the lapse of repurchase rights, reacquisition rights or other applicable restrictions
as of the date of this Agreement, the type of Company Option and the Benefit Plan under which such Company Options or awards of
Company Restricted Stock Units were granted or purchased; and (C) whether, in the case of a Company Option, such Company Option
is intended to be an “incentive stock option” (within the meaning of the Code). The Company has made available to the
Purchaser prior to the date hereof copies of each form of stock option agreement or stock award agreement evidencing outstanding
Company Options or awards of Company Restricted Stock Units, as applicable, and has also delivered any other stock option agreements
or stock award agreements to the extent there are variations from the applicable form of agreement (it being understood that differences
disclosed pursuant to clauses (A) through (C) of the immediately preceding sentence do not constitute variations for this purpose),
specifically identifying the holder(s) to whom such variant forms apply. Except for (x) the outstanding Company Options and awards
of Company Restricted Stock Units listed in Section 3.1(g) of the Disclosure Schedule and (y) as set forth elsewhere in this Section
3.1(g), the Company does not have and is not bound by any outstanding subscriptions, options, awards, warrants, calls, commitments
or agreements of any character calling for the purchase, redemption or issuance of, or securities or rights convertible into or
exchangeable or exercisable for, any shares of Common Stock or Company Preferred Stock or any other equity securities of the Company
or Voting Debt or any securities representing the right to purchase or otherwise receive any shares of capital stock of the Company
(including any rights plan or agreement). Each Company Option and each award of Company Restricted Stock Units under the Benefit
Plans (i) was granted in compliance with all applicable laws and all of the terms and conditions of the Benefit Plans pursuant
to which it was issued, (ii) with respect to Company Options, has an exercise or reference price equal to or greater than the fair
market value of a share of Common Stock at the close of business on the date of such grant, (iii) has a grant date identical to
or following the date on which the Board or a committee thereof actually granted such Company Option or award of Company Restricted
Stock Units, (iv) otherwise is exempt from or complies with Section 409A of the Code so that the recipient of such Company Option
is not subject to the additional taxes and interest pursuant to Section 409A of the Code and (v) except for disqualifying dispositions
of Company Options, qualifies for the tax and accounting treatment afforded to such Company Option or award of Company Restricted
Stock Units in the Company Financial Statements, respectively. There are no securities or instruments issued by or to which the
Company is a party containing anti-dilution or similar provisions that will be triggered by the issuance of the Preferred Shares
pursuant to this Agreement or the Other Purchase Agreements.

 

    	16

    	 

    

 

(h)          SEC
Reports; Disclosure Materials.  The Company has filed all reports, schedules, forms, statements and other documents
required to be filed by it under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, since December 31, 2008
(the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred
to herein as the “SEC Reports” and together with this Agreement, the Disclosure Schedule and all information
Previously Disclosed, the “Disclosure Materials”), on a timely basis or has received a valid extension of such
time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective filing
dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the
rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading. There are no outstanding or unresolved comments
in comment letters received from the Commission. To the Knowledge of the Company, as of the date hereof, none of the SEC Reports
is the subject of any ongoing Commission review. Other than the Annual Report on Form 11-K filed by the Bank Employees’ 401(k)
Plan, no Subsidiary is required to file any report, schedule, form, registration statement, or other document with the Commission.

 

(i)          Company
Financial Statements.  Except as disclosed on Schedule 3.1(i) to Company’s Disclosure Schedule, the consolidated
financial statements of the Company included in the SEC Reports for the years 2009, 2010 and 2011 and for each quarterly period
to date in 2012 (the “Company Financial Statements”) comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. The Company
Financial Statements have been prepared in accordance with GAAP applied on a consistent basis during the periods involved, except
as may be otherwise specified in such financial statements or the notes thereto and except that unaudited consolidated financial
statements may not contain all footnotes required by GAAP, and fairly present in all material respects the consolidated financial
position of the Company and, except for FNB Financial Service Capital Trust I, all of the Subsidiaries as of and for the dates
thereof and the consolidated results of operations and cash flows for the periods then ended, subject, in the case of unaudited
consolidated statements, to normal, year-end audit adjustments, which would not be material, either individually or in the aggregate.
The Company’s allowance for lease and loan losses is adequate in the reasonable judgment of the Company’s management.

 

    	17

    	 

    

 

(j)          Internal
Accounting and Disclosure Controls.

 

(i)          The
records, systems, controls, data and information of the Company and the Subsidiaries are recorded, stored, maintained and operated
under means (including any electronic, mechanical or photographic process, whether computerized or not) that are under the exclusive
ownership and direct control of the Company or the Subsidiaries (including all means of access thereto and therefrom), except for
any non-exclusive ownership and non-direct control that would not reasonably be expected to have a Material Adverse Effect on the
system of internal accounting controls described below in this Section 3.1(j).  The Company (i) has implemented
and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Exchange Act) to ensure that
material information relating to the Company and its Subsidiaries, is made known to the Chief Executive Officer and the Chief Financial
Officer of the Company by others within those Persons such disclosure controls and procedures are effective, and (ii) has disclosed,
based on its most recent evaluation prior to the date of this Agreement, to the Company’s outside auditors and the Audit
Committee of the Board (A) any significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting (as defined in Rule 13a-15(f) promulgated under the Exchange Act) that are reasonably likely to adversely
affect the Company’s ability to record, process, summarize and report financial information, and (B) any fraud, whether or
not material, that involves management or other employees who have a significant role in the Company’s internal control over
financial reporting.  The Company maintains internal control over financial reporting (as defined in Rule 13a-15(f) promulgated
under the Exchange Act) designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with GAAP and such internal control over financial reporting was effective
as of the date of the most recent SEC Report. As of the date of this Agreement, the Company has no Knowledge of any reason that
its outside auditors and its Chief Executive Officer and Chief Financial Officer will not be able to give the certifications and
attestations required pursuant to the rules and regulations adopted pursuant to Section 404 of the Sarbanes-Oxley Act of 2002,
without qualification (except to extent expressly permitted by the rules and regulations promulgated thereunder), when next due.  Since
December 31, 2008, (1) neither the Company nor any Subsidiary nor, to the Knowledge of the Company, any director, officer, employee,
auditor, accountant or representative of the Company or any Subsidiary has received or otherwise had or obtained knowledge of any
material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures,
methodologies or methods of the Company or any Subsidiary or their respective internal accounting controls, including any material
complaint, allegation, assertion or claim that the Company or any Subsidiary has engaged in questionable accounting or auditing
practices, and (2) no attorney representing the Company or any Subsidiary, whether or not employed by the Company or any Subsidiary,
has reported evidence of a material violation of securities laws, breach of fiduciary duty or similar violation by the Company
or any of its officers, directors, employees or agents to the Board or any committee thereof or to any director or officer of the
Company.

 

(ii)         Except
as Previously Disclosed, there is no transaction, arrangement, or other relationship between the Company and any of the Subsidiaries
and an unconsolidated or other Affiliated entity that is not reflected on the Company Financial Statements.

 

(iii)        The
Company is in compliance in all material respects with all applicable provisions of the Sarbanes-Oxley Act of 2002.

 

(k)          Taxes.

 

(i)          All
income and other material Tax Returns required to be filed by, or on behalf of, the Company or the Subsidiaries have been timely
filed or will be timely filed or a proper extension of the required time for filing has been or will be obtained, in accordance
with all applicable Tax laws, and all such Tax Returns are, or shall be at the time of filing, complete and correct in all material
respects.  The Company and the Subsidiaries have timely paid all material Taxes due and payable (whether or not shown
on such Tax Returns), or, where payment is not yet due, have made adequate provisions in accordance with GAAP.  There
are no Liens with respect to Taxes upon any of the assets or properties of either the Company or the Subsidiaries other than with
respect to Taxes not yet due and payable.

 

    	18

    	 

    

 

(ii)         No
deficiencies for any material Taxes have been proposed or assessed in writing against or with respect to any Taxes due by or Tax
Returns of the Company or the Subsidiaries, and there is no outstanding audit, assessment, dispute or claim concerning any material
Tax liability of the Company or the Subsidiaries.  No written claim has ever been made by any Governmental Entity in
a jurisdiction where neither the Company nor any of the Subsidiaries files Tax Returns that the Company or any of its Subsidiaries
is or may be subject to taxation by that jurisdiction.

 

(iii)        Neither
the Company nor the Subsidiaries (A) are or have ever been a member of an affiliated group (other than a group the common parent
of which is the Company) filing a joint, combined, unitary or consolidated Tax Return or (B) have any liability for Taxes of any
Person (other than the Company or any of its Subsidiaries) arising from the application of Treasury Regulation Section 1.1502-6
or any analogous provision of state, local or foreign law, or as a transferee or successor, by contract, or otherwise.

 

(iv)        Except
as Previously Disclosed, none of the Company or the Subsidiaries are party to, are bound by or has any obligation under any Tax
sharing or Tax indemnity agreement or similar contract or arrangement.

 

(v)         Neither
the Company nor any of the Subsidiaries has been either a “distributing corporation” or a “controlled corporation”
in a distribution occurring during the last five (5) years in which the parties to such distribution treated the distribution as
one to which Section 355 of the Code is applicable.

 

(vi)        All
material Taxes (determined both individually and in the aggregate) required to be withheld, collected or deposited by or with respect
to the Company or the Subsidiaries have been timely withheld, collected or deposited, as the case may be, and, to the extent required,
have been paid to the relevant taxing authority, other than Taxes being contested in good faith and for which adequate reserves
have been made in the Company Financial Statements.  The Company and the Subsidiaries have complied with all applicable
information reporting requirements in all material respects.

 

(vii)       No
closing agreement pursuant to Section 7121 of the Code (or any similar provision of state, local or foreign law) has been
entered into by or with respect to the Company or the Subsidiaries.  Neither the Company nor any of the Subsidiaries
has granted any waiver of any federal, state, local or foreign statute of limitations that is still in effect with respect to,
or any extension of a period for the assessment of, any Tax.  Section 3.1(k) of the Disclosure Schedule sets forth the
tax year through which the statute of limitations has run in respect of material liabilities for Taxes of the Company and the Subsidiaries
for federal, state, local and foreign Taxes.

 

(viii)      Neither
the Company nor any of the Subsidiaries has engaged in any transaction that could give rise to (A) a registration obligation with
respect to any Person under Section 6111 of the Code or the Treasury Regulations thereunder, (B) a list maintenance obligation
with respect to any Person under Section 6112 of the Code or the Treasury Regulations thereunder, or (C) disclosure obligation
as a “listed transaction” under Section 6011 of the Code and the Treasury Regulations thereunder.

 

    	19

    	 

    

 

(ix)         Except
as may result from the transactions contemplated by this Agreement and the Transaction Documents, including without limitation
the transactions described in the Recitals hereto, (A) none of the net operating loss carryforwards, unrealized built-in losses,
Tax credits, or capital loss carryforwards for U.S. federal income Tax purposes of the Company or any Subsidiary is, as applicable,
currently subject to limitation under Section 382 or 383 of the Code or Treasury Regulations Section 1.1502-15 or -21
or otherwise, (B) all of the Common Stock is owned by a single “direct public group” (within the meaning of Treasury
Regulation Section 1.382-2T(j)(2)(ii)) and (C) except as Previously Disclosed, there are no “5-percent shareholders”
(within the meaning of Section 382(k)(7) of the Code and the Treasury Regulations promulgated thereunder) of Common Stock,
and, except as Previously Disclosed, there have not been any such shareholders within the past three (3) years.

 

(l)          Material
Changes.  Since the date of the most recent of the Company Financial Statements included within the SEC Reports filed
prior to the date of this Agreement, (i) the businesses of the Company and its Subsidiaries have been conducted only in the ordinary
course, in substantially the same manner as theretofore conducted, and there has not occurred since December 31, 2008, any event
that has had or would be reasonably expected to have a Material Adverse Effect; (ii) the Company has not incurred any material
liabilities (contingent or otherwise) other than (A) trade payables, accrued expenses and other liabilities incurred in the ordinary
course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial
statements pursuant to GAAP or required to be disclosed in filings made with the Commission; (iii) the Company has not altered
materially its method of accounting or the manner in which it keeps its accounting books and records; (iv) the Company has not
declared or made any distribution of cash or other property to its shareholders or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock; and (v) the Company has not issued any equity securities to any officer, director
or Affiliate, except as set forth in Section 3.1(g).

 

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

 

    	20

    	 

    

 

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

 

(o)          Employment
Matters.  No labor dispute exists or, to the Company’s Knowledge, is imminent with respect to any of the employees
of the Company or any of its Subsidiaries which reasonably would be expected to have a Material Adverse Effect. None of the employees
of the Company or any of its Subsidiaries is a member of a union that relates to such employee’s relationship with the Company
or any Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement. The Company
and each Subsidiary believes that its relationship with its employees is good.  To the Company’s Knowledge, no
executive officer is, or is now expected to be, in violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive
covenant in favor of a third party, and to the Company’s Knowledge, the continued employment of each such executive officer
does not subject the Company or any Subsidiary to any liability with respect to any of the foregoing matters.  The Company
and each Subsidiary is in compliance with all federal, state, local and foreign laws and regulations relating to employment and
employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance would
not have or reasonably be expected to have a Material Adverse Effect.

 

(p)          Employee
Benefits.

 

(i)          Section
3.1(p) of the Disclosure Schedule sets forth a correct and complete list of each “employee benefit plan” (within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), including,
without limitation, multiemployer plans within the meaning of Section 3(37) of ERISA), and all stock purchase, equity or equity-related
rights, severance, employment, change-in-control, fringe benefit, bonus, incentive, deferred compensation and all other employee
benefit plans, agreements, programs, policies or other arrangements, whether or not subject to ERISA (including any funding mechanism
therefor now in effect or required in the future as a result of the transactions contemplated by the Transaction Documents or otherwise),
whether formal or informal, oral or written, under which (A) any current or former employee, officer, director or consultant of
the Company or any of its Subsidiaries (the “Company Employees”) has any present or future right to benefits
and which are contributed to, sponsored by or maintained by the Company or any of its Subsidiaries or (B) the Company or any Subsidiary
has had or has any present or future liability.  All such plans, agreements, programs, policies and arrangements shall
be collectively referred to as the “Benefit Plans.”

 

    	21

    	 

    

 

(ii)         With
respect to each Benefit Plan, the Company has provided to the Purchaser a current, correct and complete copy (or, to the extent
no such copy exists, an accurate description) thereof and, to the extent applicable: (A) any related trust agreement or other funding
instrument; (B) the most recent determination letter, if applicable; (C) any summary plan description and other written communications,
other than individual pension benefit statements provided in accordance with Section 105 of ERISA, (or a description of any
oral communications) by the Company and the Subsidiaries to the Company Employees or other beneficiaries concerning the extent
of the benefits provided under a Benefit Plan; (D) a summary of any proposed material amendments or material changes anticipated
to be made to the Benefit Plans at any time within the 12 months immediately following the date hereof; and (E) for the three (3)
most recent years (x) the Form 5500 and attached schedules, (y) audited financial statements and (z) actuarial valuation reports.

 

(iii)        (A)
Each Benefit Plan has been established and administered in all material respects in accordance with its terms, and in compliance
with the applicable provisions of ERISA, the Code and other applicable laws; (B) each Benefit Plan which is intended to be qualified
within the meaning of Section 401(a) of the Code has received a favorable determination letter as to its qualification, and
nothing has occurred, whether by action or failure to act, that could reasonably be expected to cause the loss of such qualification;
(C) no “reportable event” (as such term is defined in Section 4043 of ERISA) that could reasonably be expected
to result in any material liability has occurred with respect to any Benefit Plan, no non-exempt “prohibited transaction”
(as such term is defined in Section 406 of ERISA and Section 4975 of the Code) has been engaged in by the Company or
any Subsidiary with respect to any Benefit Plan that has or is expected to result in any material liability, no failure by any
Benefit Plan to satisfy the minimum funding standards  (within the meaning of Section 412 of the Code or Section 302
of ERISA) applicable to such Benefit Plan, whether or not waived, has occurred, and no material liability under Subtitle C or D
of Title IV of ERISA has been or is expected to be incurred by the Company or any Subsidiary with respect to any ongoing, frozen
or terminated “single-employer plan,” within the meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by any of them, or the single-employer plan of any entity which is considered one employer with the Company under Section 4001
of ERISA or Section 414 of the Code; (D) there does not now exist, nor do any circumstances exist that would reasonably be
expected to result in, any “controlled group liability” that would be a liability of the Company or any Subsidiary;
(E) for each Benefit Plan with respect to which a Form 5500 has been filed, no material change has occurred with respect to the
matters covered by the most recent Form 5500 since the end of the period covered by such Form 5500; (F) except as expressly contemplated
by this Agreement, there is no present intention that any Benefit Plan be materially amended, suspended or terminated, or otherwise
modified to change benefits (or the levels thereof) in a manner that results in an increased cost to the Company or any Subsidiary
(other than an immaterial increase in administrative costs) under any Benefit Plan at any time within the 12 months immediately
following the date hereof; and (G) except as Previously Disclosed, the Company and the Subsidiaries have not incurred any current
or projected liability under any Benefit Plan (or any other plan or arrangement to which the Company or a Subsidiary is a party)
in respect of post-employment or post-retirement health, medical or life insurance benefits for current, former or retired employees
of the Company or the Subsidiaries, except as required to avoid an excise tax under Section 4980B of the Code or otherwise
except as may be required pursuant to any other laws.

 

    	22

    	 

    

 

(iv)        Except
as set forth in Schedule 3.1(p) of the Company’s Disclosure Schedule, with respect to each of the Benefit Plans subject to
Title IV of ERISA, as of the Closing Date, the assets of each such Benefit Plan are at least equal in value to the present
value of the accrued benefits (vested and unvested) of the participants in such Benefit Plan on a termination and projected benefit
obligation basis, based on the actuarial methods and assumptions indicated in the most recent applicable actuarial valuation reports.

 

(v)         No
Benefit Plan is a “multiemployer plan” within the meaning of Section 4001(a)(iii) of ERISA or a plan that has
two or more contributing sponsors, at least two of whom are not under “common control” as described in Section 4063
of ERISA.  Neither the Company nor any member of any organization which is a member of a controlled group of organizations
within the meaning of Section 414(b), (c), (m) or (o) of the Code has at any time sponsored or contributed to, or has or had
any liability or obligation in respect of, any multiemployer plan.

 

(vi)        With
respect to any Benefit Plan, (A) no material Actions (other than routine claims for benefits in the ordinary course) are pending
or, to the Company’s Knowledge, threatened, (B) no facts or circumstances exist that could reasonably be expected to give
rise to any such Actions, (C) no written or oral communication has been received from the Pension Benefit Guaranty Corporation
(the “PBGC”) in respect of any Benefit Plan subject to Title IV of ERISA concerning the funded status of any
such plan, the Freezing or termination of such plan, or any transfer of assets and liabilities from any such plan in connection
with the transactions contemplated herein and (D) no administrative investigation, audit or other administrative proceeding by
the Department of Labor, the PBGC, the Internal Revenue Service or other Governmental Entities are pending, in progress (including,
without limitation, any routine requests for information from the PBGC) or, to the Knowledge of the Company, threatened.  With
respect to each Benefit Plan that is subject to Title IV or Section 302 of ERISA or Section 412, 430 or 4971 of the Code:  (i)
no Benefit Plan has failed to satisfy minimum funding standards (within the meaning of Section 412 or 430 of the Code or Section 302
of ERISA), whether or not waived; and (ii) there has been no determination that any Benefit Plan is, or is expected to be, in “at
risk” status (within the meaning of Section 430 of the Code or Section 303 of ERISA).

 

(vii)       Neither
the execution and delivery of the Transaction Documents, nor the consummation of the transactions contemplated hereby and thereby,
taking into account any other related event, will (A) result in any payment (including severance, unemployment compensation or
“excess parachute payment” (within the meaning of Section 280G of the Code), forgiveness of indebtedness or otherwise)
becoming due to any current or former employee, officer or director of the Company or any Subsidiary from the Company or any of
the Subsidiaries under any Benefit Plan or otherwise, (B) increase any compensation or benefits otherwise payable under any Benefit
Plan, (C) result in any acceleration of the time of payment or vesting of any such benefits, (D) require the funding or increase
in the funding of any such benefits (through a grantor trust or otherwise), (E) result in any limitation on the right of the Company
or any of the Subsidiaries to (1) amend, merge or terminate any Benefit Plan or related trust or (2) receive a reversion of assets
from any Benefit Plan or related trust, or (F) result in payments under any of the Benefit Plans or otherwise which would not be
deductible under Section 280G of the Code.  Neither the Company nor any of the Subsidiaries has taken, or permitted
to be taken, any action that required, and no circumstances exist that will require, the funding, or the increase in the funding,
of any benefits under any Benefit Plan or resulted, or will result, in any limitation on the right of the Company or any of the
Subsidiaries to amend, merge, terminate or receive a reversion of assets from any Benefit Plan or related trust.

 

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(viii)      Except
as set forth in Schedule 3.1(p) of the Company’s Disclosure Schedule, each Benefit Plan that is in any part a “nonqualified
deferred compensation plan” subject to Section 409A of the Code (A) materially complies and, at all times after December
31, 2008 has materially complied, both in form and operation, with the requirements of Section 409A of the Code and the final
Treasury Regulations thereunder and (B) between January 1, 2005 and December 31, 2008 was operated in good faith compliance with
Section 409A of the Code, as determined under applicable guidance of the Treasury and the Internal Revenue Service.  No
compensation payable by the Company or any of the Subsidiaries has been reportable as nonqualified deferred compensation in the
gross income of any individual or entity as a result of the operation of Section 409A of the Code.

 

(ix)         The
Company and the Subsidiaries have complied in full with the TARP Standards for Compensation and Corporate Governance and all other
applicable laws promulgated with respect thereto or otherwise relating to the Treasury’s Troubled Asset Relief Program (TARP)
Capital Purchase Program (including without limitation obtaining any waivers of rights to compensation and benefits from such senior
executive officers and other employees as may be necessary to comply with the TARP Capital Purchase Program).

 

(q)          Compliance.  Except
as Previously Disclosed, neither the Company nor any of its Subsidiaries is (i)  in default under or in violation of (and
no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company
or any of its Subsidiaries under), nor has the Company or any of its Subsidiaries received written notice of a claim that it is
in default under or that it is in violation of, any contract, agreement or arrangement (whether or not such default or violation
has been waived), (ii) in violation of any order or Regulatory Agreement of any Governmental Entity having jurisdiction over
the Company, any Subsidiary or their respective properties or assets, or (iii) in violation of, or in receipt of written notice
that it is in violation of, any statute, rule, regulation, policy, guidelines or order of any Governmental Entity applicable to
the Company or any of its Subsidiaries, or which would have the effect of revoking or limiting FDIC deposit insurance, except in
each case as would not have or reasonably be expected to have a Material Adverse Effect. Since December 31, 2008, the Company and
each Subsidiary has conducted its business in compliance with all applicable federal, state, and foreign laws, orders, judgments,
decrees, rules, regulations, and applicable stock exchange requirements, including all laws and regulations restricting activities
of bank holding companies and banking organizations, except for any noncompliance that has not had and would not be reasonably
expected to have a Material Adverse Effect.

 

(r)          Regulatory
Permits.  The Company and each of its Subsidiaries possess or have applied for all certificates, authorizations and
permits issued by the appropriate Governmental Entities necessary to conduct their respective businesses as conducted and as described
in the SEC Reports on file as of the date of this Agreement, except where the failure to possess such certificates, authorizations
and permits has not and would not reasonably be expected to have a Material Adverse Effect (“Material Permits”),
and (i) neither the Company nor any of its Subsidiaries has received any notice in writing of any Action (whether pending
or threatened) relating to the revocation or material adverse modification of any such Material Permits and (ii) the Company
has no Knowledge of any facts or circumstances that would give rise to the revocation or material adverse modification of any Material
Permits.

 

    	24

    	 

    

 

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

 

(t)          Intellectual
Property.  The Company and its Subsidiaries own, possess, license or have other valid and effective rights to use
all foreign and domestic patents, patent applications, trade and service marks, trade and service mark applications and registrations,
trade names, copyrights, inventions, trade secrets, technology, Internet domain names, know-how and other intellectual property
(collectively, the “Intellectual Property”) necessary for the conduct of their respective businesses as now
conducted or as proposed to be conducted as disclosed in the SEC Reports on file as of the date of this Agreement except where
the failure to own, possess, license or have such rights would not have or reasonably be expected to have a Material Adverse Effect.  Except
where such violations or infringements would not reasonably be expected to have a Material Adverse Effect, (a) there are no
rights of third parties to any such Intellectual Property; (b) there is no infringement by third parties of any such Intellectual
Property; (c) there is no pending or threatened Action by others challenging the Company’s or any Subsidiary’s
rights in or to any such Intellectual Property; (d) there is no pending or, to the Knowledge of the Company, threatened Action
by others challenging the validity or scope of any such Intellectual Property; and (e) there is no pending or, to the Knowledge
of the Company, threatened Action by others claiming that the Company and/or any Subsidiary infringes or otherwise violates any
Intellectual Property rights of other Persons.

 

(u)          Insurance.  The
Company and each of the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks
and in such amounts as the Company reasonably believes to be prudent and customary in the businesses and locations in which the
Company and the Subsidiaries are engaged.  All premiums due and payable under all such policies and bonds have been timely
paid, and the Company and its Subsidiaries are in material compliance with the terms of such policies and bonds. Neither the Company
nor any of its Subsidiaries has received any notice of cancellation of any such insurance, nor, to the Company’s Knowledge,
will the Company or any Subsidiary be unable 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 Material Adverse
Effect.

 

    	25

    	 

    

 

(v)         Transactions
With Affiliates and Employees.  Except as Previously Disclosed, other than the grant of Company Options and awards
of Company Restricted Stock Units that are not individually or in the aggregate material in amount, none of the officers or directors
of the Company and, to the Company’s Knowledge, none of the employees of the Company, is presently a party to any transaction
with the Company or to a presently contemplated transaction (other than for services as employees, officers and directors) that
would be required to be disclosed pursuant to Item 404 of Regulation S-K promulgated under the Securities Act. Since
December 31, 2008, except as Previously Disclosed, the Bank (i) has not made an extension of credit to an insider of the Bank or
an insider of an Affiliate of the Bank other than in compliance with the provisions of Regulation O promulgated by the Federal
Reserve; and (ii) has not entered into “covered transactions” with an Affiliate except in compliance with Sections
23A and 23B of the Federal Reserve Act and the Federal Reserve’s Regulation W.

 

(w)        Brokers,
Finders, and Other Interested Parties. No Person will have, as a result of the transactions contemplated by this
Agreement, any valid right, interest or claim (i) against or upon the Company, any Subsidiary or the Purchaser for any commission,
fee or other compensation, (ii) except for other Purchasers, to participate in the transactions contemplated herein, or (iii)
except as Previously Disclosed, to otherwise acquire shares of the Company’s capital stock, in each case pursuant to any
agreement, arrangement or understanding entered into by or on behalf of the Company, other than the Placement Agents with respect
to the offer and sale of the Preferred Shares (which Placement Agent fees are being paid by the Company and have been Previously
Disclosed). The Company represents that prior to Closing it will have resolved to Purchaser’s reasonable satisfaction any
assertion of any such rights, interest or claim. Notwithstanding any provision of Section 4.7, the Company shall indemnify and
hold Purchaser and its Affiliates harmless against all Losses arising in connection with any such right, interest or claim.

 

(x)          Private
Placement.  Assuming the accuracy of the Purchaser’s representations and warranties set forth in Section 3.2
and the accuracy of the information disclosed in the Investor Questionnaire (and such accuracy in the representations, warranties
and Investor Questionnaires of all other Purchasers), no registration under the Securities Act is required for the offer and sale
of the Preferred Shares by the Company to the Purchaser under the Transaction Documents.  The issuance and sale of the
Preferred Shares hereunder does not contravene the rules and regulations of the Principal Trading Market and, upon receipt of the
Shareholder Approvals, the issuance of the Underlying Shares in accordance with the Articles of Amendment and the Common Stock
Articles of Amendment will not contravene the rules and regulations of the Principal Trading Market.

 

(y)          Registration
Rights.  Other than pursuant to the Registration Rights Agreement, the TARP Agreement and except as Previously Disclosed,
no Person has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company
other than those securities which are currently registered on an effective registration statement on file with the Commission.

 

(z)          No
Integrated Offering.  Assuming the accuracy of the Purchaser’s representations and warranties set forth in
Section 3.2 and the accuracy of the same representations, warranties and Investor Questionnaires of all other Purchasers,
neither the Company, any of its Subsidiaries nor, to the Company’s  Knowledge, any of its Affiliates or any Person acting
on its behalf has, directly or indirectly, at any time within the past six (6) months, made any offers or sales of any securities
or solicited any offers to buy any securities under circumstances that would eliminate the availability of the exemption from registration
under Regulation D in connection with the offer and sale by the Company of the Preferred Shares as contemplated hereby.

 

    	26

    	 

    

 

(aa)         Listing
and Maintenance Requirements.  The Company’s Common Stock is registered pursuant to Section 12(b) of the Exchange
Act, and the Company has taken no action designed to terminate the registration of the Common Stock under the Exchange Act nor
has the Company received any notification that the Commission is contemplating terminating such registration. The Company has not,
in the 12 months preceding the date hereof, received written notice from any Trading Market on which the Common Stock is listed
or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market.
The Company is, and has no reason  to believe that it will not in the foreseeable future continue to be, in compliance
in all material respects with the listing and maintenance requirements for continued trading of the Common Stock on the Principal
Trading Market.

 

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

 

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

 

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

 

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

 

(ff)         OFAC.  Neither
the Company nor any Subsidiary nor, to the Company’s Knowledge, any director, officer, agent, employee, Affiliate or Person
acting on behalf of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by any Governmental Entity
(including, without limitation, the Office of Foreign Assets Control of the U.S. Treasury Department) (“OFAC”)
(“Sanctions”); and the Company will not knowingly directly or indirectly use the proceeds of the sale of the
Preferred Shares, or lend, contribute or otherwise make available such proceeds to any Subsidiary or other Person, to fund any
activities of or with any Person, or in any country or territory that, at the time of such funneling, is, or whose government is
subject to Sanctions.

 

    	27

    	 

    

 

(gg)         Other
Laws.  The Company has no Knowledge of any facts and circumstances, and has no reason to believe that any facts or
circumstances exist, that would cause the Bank: (i) to be deemed not to be in satisfactory compliance with the Community Reinvestment
Act (“CRA”) and the regulations promulgated thereunder or to be assigned a CRA rating by federal or state banking
regulators of lower than “satisfactory”; (ii) to be deemed to be operating in violation, in any material respect, of
the Bank Secrecy Act of 1970, as amended, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001 (the “USA PATRIOT ACT”), any order issued with respect to anti-money laundering
by the OFAC, or any other anti-money laundering statute, rule or regulation; or (iii) to be deemed not to be in satisfactory compliance,
in any material respect, with all applicable privacy of customer information requirements contained in any federal and state privacy
laws and regulations as well as the provisions of all information security programs adopted by the Subsidiaries. The operations
of the Company and each of its Subsidiaries are and have been conducted at all times in compliance with the anti-money laundering
statutes of applicable jurisdictions, the rules and regulations thereunder, and any related or similar rules, regulations, or guidelines,
issued, administered, or enforced by any applicable Governmental Entity (collectively, the “Anti-Money Laundering Laws”),
and no Action by or before any Governmental Entity with respect to Anti-Money Laundering Laws and to which the Company or any Subsidiary
is a party is pending or, to the Company’s Knowledge, threatened.

 

(hh)         Reports,
Registrations and Statements.  Since December 31, 2008, the Company and each Subsidiary have filed all material reports,
registrations and statements, together with any required amendments thereto, that it was required to file with the Federal Reserve,
the FDIC, the NCCOB, and any other applicable federal or state securities or banking authorities, except where the failure to file
any such report, registration or statement would not have or reasonably be expected to have a Material Adverse Effect. All such
reports and statements filed with any such regulatory body or authority are collectively referred to herein as the “Company
Reports.” All such Company Reports were filed on a timely basis or the Company or the applicable Subsidiary, as applicable,
received a valid extension of such time of filing and has filed any such Company Reports prior to the expiration of any such extension.
As of their respective dates, the Company Reports complied in all material respects with all the rules and regulations promulgated
by the Federal Reserve, the FDIC, the NCCOB and any other applicable federal or state securities or banking authorities, as the
case may be.

 

(ii)         Agreements
with Regulatory Agencies; Compliance with Certain Banking Regulations.  Except as Previously Disclosed, neither the
Company nor any Subsidiary is subject to any consent or other similar order or enforcement action issued by, or is a party to any
written agreement, consent agreement or memorandum of understanding with, or is a party to any commitment letter or similar undertaking
to, or is subject to any capital directive by, or since December 31, 2008, has adopted any board resolutions at the request of,
any Governmental Entity that currently restricts in any material respect the conduct of its business or that in any material manner
relates to its capital adequacy, its liquidity and funding policies and practices, its ability to pay dividends, its credit, risk
management or compliance policies, its internal controls, its management or its operations or business (each, a “Regulatory
Agreement”), nor has the Company or any Subsidiary been advised since December 31, 2008 by any Governmental Entity that
it is considering issuing, initiating, ordering, or requesting any such Regulatory Agreement.  With respect to any matters
requiring Board action prior to the date of this Agreement or Closing, as applicable, that were set forth in writing by any of
the Federal Reserve, the FDIC or the NCCOB, the Company and its Subsidiaries have addressed such matters in all material respects.

 

    	28

    	 

    

 

Except as would not
reasonably be expected to have a Material Adverse Effect, each of the Company and 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 Company, the Bank or any director, officer or employee of the Company
or 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 a Material Adverse Effect and, except as would not reasonably be expected to have a Material Adverse Effect,
the accountings for each such fiduciary account are true and correct and accurately reflect the assets of such fiduciary account.

 

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

 

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

 

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

 

    	29

    	 

    

 

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

 

(kk)         Risk
Management Instruments.  Except as has not had or would not reasonably be expected to have a Material Adverse Effect,
since December 31, 2008, all material derivative instruments, including, swaps, caps, floors and option agreements, whether entered
into for the Bank’s own account, or for the account of any other Person, were entered into (1) only in the ordinary course
of business, (2) in accordance with prudent practices and in all material respects with all applicable laws, rules, regulations
and regulatory policies and (3) with counterparties believed to be financially responsible at the time; and each of them constitutes
the valid and legally binding obligation of the Company or one of the Subsidiaries, enforceable in accordance with its terms.  Neither
the Company or the Subsidiaries, nor, to the Knowledge of the Company, any other party thereto, is in breach of any of its material
obligations under any such agreement or arrangement.

 

(ll)          Reservation
of Underlying Shares.  Subject to receipt of the Shareholder Approvals, the Company shall reserve, and will continue
to reserve, free of any preemptive or similar rights of shareholders of the Company, numbers of unissued shares of Class A Common
Stock and Class B Common Stock sufficient to issue and deliver the Underlying Shares into which the Preferred Shares are convertible.

 

(mm)       Anti-Takeover
Provisions Not Applicable.  The Company has not adopted any shareholder rights plan or similar arrangement relating
to accumulations of beneficial ownership of Common Stock or a change in control of the Company. The Board has taken all necessary
action to ensure that the transactions contemplated by the Transaction Documents and the consummation of the transactions contemplated
hereby and thereby will be exempt from any anti-takeover or similar provisions of the Articles of Incorporation or the Bylaws of
the Company, and any other provisions of any applicable “moratorium,” “control share,” “fair price,”
“interested shareholder” or other applicable anti-takeover laws and regulations, including Article 9 and Article 9A
of the North Carolina Business Corporation Act.

 

    	30

    	 

    

 

(nn)        Acknowledgment
Regarding Purchaser’s Purchase of Preferred Shares.  The Company acknowledges and agrees that the Purchaser
is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions
contemplated hereby and thereby. The Company further acknowledges that the Purchaser is not acting as a financial advisor or fiduciary
of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby
and any advice given by the Purchaser or any of its representatives or agents in connection with the Transaction Documents and
the transactions contemplated thereby is merely incidental to the Purchaser’s purchase of Preferred Shares.

 

(oo)        No
Additional Agreements.  The Company does not have any agreement or understanding with any Purchaser to purchase Preferred
Shares on terms that are different than as set forth in this Agreement.

 

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

 

(qq)        Adequate
Capitalization. As of September 30, 2012, the Bank met or exceeded the standards necessary to be considered “well capitalized”
under the FDIC’s regulatory framework for prompt corrective action.

 

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

 

(ss)         Change
in Control. The issuance of the Securities to the Purchasers as contemplated by this Agreement and the other Agreements entered
into by Purchasers will not trigger (either alone or together with any other event) any rights under any “change of control”
provision in any of the agreements to which the Company or any of the Subsidiaries is a party, including any employment, “change
in control,” severance or other compensatory agreements and any benefit plan, which results in payments to or rights of the
counterparty or the acceleration of vesting of benefits.

 

(tt)          Disclosure.
The Company confirms that neither it nor any of its officers or directors nor any other Person acting on its or their behalf, including
the Placement Agents, has provided the Purchaser or its respective agents or counsel with any information that it believes constitutes
or could reasonably be expected to constitute material, non-public information except insofar as the existence, provisions and
terms of the Transaction Documents and the proposed transactions hereunder may constitute such information, all of which will be
disclosed by the Company in the Press Release as contemplated by Section 4.5 hereof. The Company understands and confirms that
the Purchaser will rely on the representations in this Section 3.1(tt) in effecting transactions in securities of the Company or
any of its Subsidiaries or its business, properties, operations or financial conditions, which, under applicable law, rule or regulation,
requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed, except for
the announcement of this Agreement and related transactions and/or as may otherwise be disclosed on the Form 8-K filed pursuant
to Section 4.5.

 

    	31

    	 

    

 

3.2           Representations
and Warranties of the Purchaser.  The Purchaser represents and warrants as of the date hereof and as of the Closing
Date to the Company as follows:

 

(a)           Organization;
Authority.  The Purchaser is duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization with the requisite corporate, limited liability company, or partnership power and authority to enter into and
to consummate the transactions contemplated by the applicable Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder. The execution, delivery and performance by the Purchaser of the transactions contemplated by this Agreement
have been duly authorized by all necessary corporate, limited liability company, partnership or similar action. This Agreement
has been duly executed by the Purchaser. When delivered by the Purchaser in accordance with the terms hereof, this Agreement will
constitute the valid and legally binding obligation of the Purchaser, enforceable against it in accordance with its terms, except
(i) as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar
laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles
of general application, (ii) as limited by laws regarding the availability of specific performance, injunctive relief or other
equitable remedies, and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

(b)           No
Conflicts.  The execution, delivery and performance by the Purchaser of this Agreement and the consummation by the
Purchaser of the transactions contemplated hereby will not (i) result in a violation of the Organizational Documents of the
Purchaser, (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 the Purchaser is a party, or (iii) subject to the existence of the Absence of Required Approvals, result
in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable
to the 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 the
Purchaser to perform its obligations hereunder.

 

(c)           Consents
and Approvals.  Assuming the accuracy of the representations and warranties of the Company and the other parties
to the Transaction Documents and the existence of the Absence of Required Approvals, other than passivity or anti-association commitments
requested by the Federal Reserve, no consents of any Governmental
Entity are necessary to be obtained by the Purchaser for the consummation of the transactions contemplated by the Transaction Documents
to which the Purchaser is a party.

 

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

 

    	32

    	 

    

 

(e)           Purchaser
Status.  At the time the Purchaser was offered the Preferred Shares being acquired pursuant to this Agreement, it
was, and at the date hereof it is, an “accredited investor” as defined in Rule 501(a) of Regulation D.

 

(f)            No
General Solicitation or General Advertising.  The Purchaser is not purchasing the Preferred Shares being acquired
pursuant to this Agreement as a result of any form of general solicitation or general advertising (within the meaning of Regulation
D under the Securities Act).

 

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

 

(h)          Access
to Information.  The Purchaser acknowledges that it has received and reviewed the Disclosure Materials and has been
afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives
of the Company concerning the terms and conditions of the offering of the Preferred Shares being acquired pursuant to this Agreement
and the merits and risks of investing in the Preferred Shares being acquired pursuant to this Agreement; (ii) access to information
about the Company and the Subsidiaries and their respective financial condition, results of operations, business, properties, management
and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information
that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment
decision with respect to the investment. Neither such inquiries nor any other investigation conducted by or on behalf of the Purchaser
or its representatives or counsel shall modify, amend or affect the Purchaser’s right to rely on the truth, accuracy and
completeness of the Disclosure Materials and the Company’s representations and warranties contained in the Transaction Documents.
The Purchaser has sought such accounting, legal and tax advice as it has considered necessary to make an informed decision with
respect to its acquisition of the Preferred Shares being acquired pursuant to this Agreement.

 

    	33

    	 

    

 

(i)           Independent
Investment Decision.  The Purchaser has independently evaluated the merits of its decision to purchase the Preferred
Shares being acquired pursuant to this Agreement, and the Purchaser confirms that it has not relied on the advice of any other
Purchaser or any other Purchaser’s advisors and/or legal counsel in making such decision. The Purchaser understands that
nothing in this Agreement or any other materials presented by or on behalf of the Company to the Purchaser in connection with the
purchase of the Preferred Shares being acquired pursuant to this Agreement constitutes legal, tax or investment advice. The Purchaser
understands that the Placement Agents have acted solely as the agents of the Company in the offering of the Preferred Shares and
the Purchaser has not relied on the advice of the Placement Agents or any of their respective agents, counsel or Affiliates in
making its investment decision hereunder, and confirms that none of such Persons has made any representations or warranties to
the Purchaser in connection with the transactions contemplated by the Transaction Documents.

 

(j)           Reliance
on Exemptions.  The Purchaser understands that the Preferred Shares are being offered and sold to it in reliance
on specific exemptions from the registration requirements of U.S. federal and state securities laws and that the Company is relying
in part upon (1) the truth and accuracy of the Purchaser’s Investor Questionnaire, (2) truth and accuracy of the representations,
warranties, agreements, acknowledgements and understandings of the Purchaser set forth herein, and (3) the truth and accuracy of
each other Purchaser’s Investor Questionnaire and each other Purchaser’s representations, warranties, agreements, acknowledgments
and understandings in, and each other Purchaser’s compliance with, the Other Purchase Agreement to which such other Purchaser
is a party, in order to determine the availability of such exemptions and the eligibility of the Purchaser to acquire the Preferred
Shares being acquired pursuant to this Agreement.

 

(k)           No
Governmental Review.  The Purchaser understands that no Governmental Entity has passed on or made any recommendation
or endorsement of the Preferred Shares or the fairness or suitability of an investment in the Preferred Shares nor has any such
Governmental Entity passed upon or endorsed the merits of the offering of the Preferred Shares.

 

(l)           Residency.  The
Purchaser’s office in which its investment decision with respect to the Preferred Shares was made is located at the address
immediately below the Purchaser’s name on its signature page hereto.

 

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

 

(n)          Knowledge
as to Conditions. As of the date of this Agreement, the Purchaser has no reasonable basis relating to itself why an Absence
of Required Approvals would not exist.

 

(o)          Financial
Capability.  At the Closing, the Purchaser shall have available funds necessary to consummate the Closing on the
terms and conditions contemplated by this Agreement.

 

(p)          Brokers
and Finders.  Other than the Placement Agents, no Person will have, as a result of the transactions contemplated
by this Agreement, any valid right, interest or claim against or upon the Company or the Purchaser for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Purchaser.  The
Purchaser acknowledges that it is purchasing the Preferred Shares being acquired pursuant to this Agreement directly from the Company
and not from the Placement Agents.

 

    	34

    	 

    

 

ARTICLE IV.

 

OTHER AGREEMENTS OF THE PARTIES

 

4.1           Transfer
Restrictions.

 

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

 

(b)          Legends.  Certificates
evidencing the Securities shall bear any legend as required by the “blue sky” laws of any state and a restrictive legend
in substantially the following form (and, with respect to Securities held in book-entry form, the Transfer Agent will record such
a legend on the share register), until such time as they are not required under Section 4.1(c) or applicable law:

 

THESE SECURITIES HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE
SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 UNDER SAID ACT (PROVIDED THAT THE TRANSFEROR PROVIDES THE COMPANY WITH REASONABLE ASSURANCES (IN THE
FORM OF A SELLER REPRESENTATION LETTER AND, IF APPLICABLE, A BROKER REPRESENTATION LETTER) THAT THE SECURITIES MAY BE SOLD PURSUANT
TO SUCH RULE).  NO REPRESENTATION IS MADE BY THE ISSUER AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT FOR RESALES OF THESE SECURITIES.

 

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(c)          Removal
of Legends.  The restrictive legend set forth in Section 4.1(b) above shall be removed and the Company shall issue
a certificate without such restrictive legend or any other restrictive legend to the holder of the applicable Securities upon which
it is stamped or issue to such holder by electronic delivery at the applicable balance account at DTC, if (i) such Securities are
registered for resale under the Securities Act pursuant to an effective Registration Statement, (ii) such Securities are sold or
transferred pursuant to Rule 144, or (iii) such Securities are eligible for sale under Rule 144, without the requirement for the
Company to be in compliance with the current public information required under Rule 144(c)(1) (or Rule 144(i)(2), if applicable)
as to such securities and without volume or manner-of-sale restrictions.  Following the earlier of (x) the Effective
Date or (y) Rule 144 becoming available for the resale of Securities, without the requirement for the Company to be in compliance
with the current public information required under 144(c)(1) (or Rule 144(i)(2), if applicable) as to the Securities and without
volume or manner-of-sale restrictions, the Company shall instruct the Transfer Agent to remove the legend from the Securities and
shall cause its counsel to issue any legend removal opinion required by the Transfer Agent.

 

Any fees (with respect
to the Transfer Agent, Company Counsel or otherwise) associated with the issuance of such opinion or the removal of such legend
shall be borne by the Company.  If a legend is no longer required pursuant to the foregoing, the Company will no later
than three (3) Trading Days following the delivery by the Purchaser to the Company or the Transfer Agent (with notice to the Company)
of a legended certificate or instrument representing such Securities (endorsed or with stock powers attached, signatures guaranteed,
and otherwise in form necessary to affect the reissuance and/or transfer) and a “representation letter” to the extent
required by Section 4.1(a) (such third Trading Day, the “Legend Removal Date”) deliver or cause to be delivered
to the Purchaser a certificate or instrument (as the case may be) representing such Securities that is free from all restrictive
legends.  The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge
the restrictions on transfer set forth in this Section 4.1(c).  Certificates for Securities free from all restrictive
legends may be transmitted by the Transfer Agent to the Purchasers by crediting the account of the Purchaser’s primary broker
with DTC as directed by the Purchaser.

 

(d)          Acknowledgement.  The
Purchaser acknowledges its responsibilities under the Securities Act and accordingly will not sell or otherwise transfer the Securities
or any interest therein without complying with the requirements of the Securities Act.

 

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(e)          Buy-In.
If the Company shall fail for any reason or for no reason to issue to a Purchaser unlegended certificates by the Legend Removal
Date, then, in addition to all other remedies available to the Purchaser, if on or after the Trading Day immediately following
the Legend Removal Date, the Purchaser purchases (in an open market transaction or otherwise) Securities (or a broker or trading
counterparty through which the Purchaser has agreed to sell Securities makes such purchase) to deliver in satisfaction of a sale
by the holder of Securities that the Purchaser anticipated receiving from the Company without any restrictive legend (a “Buy-In”),
then the Company shall, within three (3) Trading Days after the Purchaser’s request and in the Purchaser’s sole
discretion but subject to receipt of any required approvals of Governmental Entities and to the receipt of approval from the Treasury
if the TARP Preferred Stock is then outstanding or if approval of the Treasury is otherwise required, either (i) pay cash
to the Purchaser in an amount equal to the Purchaser’s total purchase price (including brokerage commissions, if any) for
the Securities so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such
certificate (and to issue such Securities) shall terminate, or (ii) promptly honor its obligation to deliver to the Purchaser
a certificate or certificates representing such Securities and pay cash to the Purchaser in an amount equal to the excess (if any)
of the Buy-In Price over the product of (a) such number of Securities, times (b) the closing bid price of such security
on the Legend Removal Date.

 

4.2           Furnishing
of Information.  In order to enable the Purchaser to sell the Securities under Rule 144 of the Securities Act, for
a period of one (1) year from the Closing, the Company shall maintain the registration of the Common Stock, and upon effectiveness
of the Company Stock Articles of Amendment, the Class A Common Stock, under Section 12(b) of the Exchange Act and to timely file
(or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company
after the date hereof pursuant to the Exchange Act.  Following the Stock Conversion, the Company shall not register the
Class B Common Stock under Section 12 of the Exchange Act. During such one (1) year period, if the Company is not required to file
reports pursuant to such laws, it will prepare and furnish to the Purchaser and make publicly available the information described
in Rule 144(c)(2), if the provision of such information will allow resales of the Securities pursuant to Rule 144.

 

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

 

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

 

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4.5           Securities
Laws Disclosure; Publicity.  The Company shall, by 9:00 a.m., New York City time, on the first (1st) Business Day
immediately following the date of this Agreement, issue one or more press releases (collectively, the “Signing Press Release”)
reasonably acceptable to the Purchaser disclosing all material terms of the transactions contemplated hereby and any other material,
nonpublic information that the Company may have provided the Purchaser at any time prior to the filing of the Press Release. On
or before 9:00 a.m., New York City time, on the fourth (4th) Trading Day immediately following the execution of this
Agreement, the Company will file a Current Report on Form 8-K with the Commission describing the terms of the Transaction Documents
(and including as exhibits to such Current Report on Form 8-K the material Transaction Documents (including, without limitation,
this Agreement, the Registration Rights Agreement, the Articles of Amendment and the Common Stock Articles of Amendment)). By 3:00
p.m., New York City time, on the Closing Date, the Company shall issue one or more press releases (collectively, the “Closing
Press Release”) reasonably acceptable to the Purchaser disclosing the occurrence of the Closing, and all material terms
of the transactions contemplated hereby. On or before 9:00 a.m., New York City time, on the first (1st) Trading Day immediately
following the Closing Date, the Company will file a Current Report on Form 8-K with the Commission disclosing the occurrence of
the Closing, and all material terms of the transactions contemplated hereby (and including as an exhibit to such Current Report
on Form 8-K the Closing Press Release). Notwithstanding the foregoing, the Company shall not publicly disclose the name of the
Purchaser or any Affiliate or investment adviser of the Purchaser, or include the name of the Purchaser or any Affiliate or investment
adviser of the Purchaser, in any press release or filing with the Commission (other than a registration statement) or any regulatory
agency or Trading Market, without the prior written consent of the Purchaser, except (i) as required by federal securities law
in connection with (A) any Registration Statement contemplated by the Registration Rights Agreement, (B) the Proxy Statement and
(C) the filing of final Transaction Documents with the Commission and (ii) to the extent such disclosure is required by law,
at the request of the staff of the Commission or as required by Trading Market regulations, in which case the Company shall provide
the Purchaser with prior written notice of such disclosure permitted under subclause (i) or (ii) except to the extent not permitted
by law or impracticable, the Purchaser shall be provided the proposed disclosure in advance. From and after the issuance of the
Signing Press Release, the Purchaser shall not be in possession of any material, non-public information received from the Company,
any Subsidiary or any of their respective officers, directors or employees or the Placement Agents. The Purchaser covenants that
until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company, the Purchaser will maintain
the confidentiality of the existence and terms of the transaction contemplated herein.

 

4.6           Non-Public
Information.  Except with the express written consent of the Purchaser and unless prior thereto the Purchaser shall
have executed a written agreement regarding the confidentiality and use of such information, the Company shall not, and shall cause
each Subsidiary and each of their respective officers, directors, employees and agents, not to, and the Purchaser shall not directly
solicit the Company, any of its Subsidiaries or any of their respective officers, directors, employees or agents to, provide the
Purchaser with any material, non-public information regarding the Company or any of its Subsidiaries from and after the filing
of the Signing Press Release.

 

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4.7          Indemnification
by the Company.

 

(a)          After
the Closing, and subject to Section 6.1 the Company shall indemnify, defend and hold harmless to the fullest extent permitted by
law the Purchaser and its Affiliates, their respective successors and assigns, and their respective officers, directors, shareholders,
investors, partners, managers, members, employees, agents and investment advisers, as applicable, and each Person who controls
the Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) (each a “Purchaser
Indemnified Party”), against, and reimburse each such Purchaser Indemnified Party for, all Losses that such Purchaser
Indemnified Party may at any time suffer or incur, or become subject to, as a result of or in connection with (1) the inaccuracy
or breach of any representation or warranty made by the Company in this Agreement or any certificate delivered pursuant hereto,
(2) any breach or failure by the Company to perform any of its covenants or agreements contained in this Agreement and (3) any
Action brought by any Person (other than an Affiliate of such Purchaser Indemnified Party) against such Purchaser Indemnified Party
in any capacity relating to this Agreement or the other Transaction Documents or the transactions contemplated hereby or thereby.

 

(b)          Notwithstanding
anything contained in Section 4.7(a), the Company shall not be required to indemnify, defend or hold harmless any of the Purchaser
Indemnified Parties against, or reimburse any of the Purchaser Indemnified Parties for, any Losses pursuant to Section 4.7(a) (other
than Losses arising out of the inaccuracy or breach of any Company Specified Representations, which shall not be subject to the
limitations contained herein) (i) with respect to any claim (or series of claims arising from the same or similar underlying facts,
events or circumstances) unless such claim (or series of claims arising from the same or similar underlying facts, events or circumstances)
involves Losses in excess of $10,000 (the “De Minimis Amount”) (nor shall any such claim or series of claims that do
not meet the De Minimis Amount be applied to or considered for purposes of calculating the aggregate amount of the Losses by any
of the Purchaser Indemnified Parties for which the Company has responsibility under clause (ii) of this Section 4.7(b)); and (ii)
until the aggregate amount of the Purchaser Indemnified Parties’ Losses for which the Purchaser Indemnified Parties are finally
determined to be otherwise entitled to indemnification under this Section 4.7 exceeds an amount equal to the lesser of one-tenth
of one percent (.10%) of the Purchase Price paid by the Purchaser and $50,000 (the “Deductible”), provided that once
the Deductible is exceeded, the Company shall be obligated for all of the Purchaser Indemnified Parties’ Losses for which
the Purchaser Indemnified Parties are finally determined to be otherwise entitled to indemnification under this Section 4.7 that
are in excess of the Deductible. Notwithstanding anything to the contrary contained herein, the Company shall not be required to
indemnify, defend or hold harmless the Purchaser Indemnified Parties against, or reimburse the Purchaser Indemnified Parties for,
any Losses pursuant to this Section 4.7 in a cumulative aggregate amount exceeding the aggregate Purchase Price paid by the Purchaser
to the Company.

 

(c)          For
purposes of this Section 4.7, in determining whether there has been a breach of a representation or warranty, the parties hereto
shall ignore any “materiality” or “Material Adverse Effect” qualifications.

 

4.8          Indemnification
by the Purchaser.

 

(a)          After
the Closing, and subject to Section 6.1 the Purchaser shall indemnify, defend and hold harmless to the fullest extent permitted
by law the Company and its Affiliates, their respective successors and assigns, and their respective officers, directors, shareholders,
partners, managers, members, employees, attorneys, and agents as applicable, and each Person who controls the Company (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) (each a “Company Indemnified Party”),
against, and reimburse each such Company Indemnified Party for, all Losses that the Company Indemnified Parties may at any time
suffer or incur, or become subject to, as a result of or in connection with (1) the inaccuracy or breach of any representation
or warranty made by the Purchaser in this Agreement or any certificate delivered pursuant hereto or (2) any breach or failure by
the Purchaser to perform any of its covenants or agreements contained in this Agreement or any Transaction Document.

 

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(b)          Notwithstanding
anything contained in Section 4.8(a), the Purchaser shall not be required to indemnify, defend or hold harmless any of the Company
Indemnified Parties against, or reimburse any of the Company Indemnified Parties for any Losses pursuant to this Section 4.8 (other
than Losses arising out of the inaccuracy or breach of any Purchaser Specified Representations, which shall not be subject to the
limitations contained herein) (i) with respect to any claim (or series of claims arising from the same or similar underlying facts,
events or circumstances) unless such claim (or series of claims arising from the same or similar underlying facts, events or circumstances)
involves Losses in excess of the Deductible (nor shall any such claim or series of claims that do not meet the Deductible be applied
to or considered for purposes of calculating the aggregate amount of the Losses by any of the Company Indemnified Parties for which
the Purchaser has responsibility under clause (ii) of this Section 4.8(b)); and (ii) until the aggregate amount of the Company
Indemnified Parties’ Losses for which the Company Indemnified Parties are finally determined to be otherwise entitled to
indemnification under this Section 4.8 exceeds the Deductible, after which the Purchaser shall be obligated for all of the Company
Indemnified Parties’ Losses for which the Company Indemnified Parties are finally determined to be otherwise entitled to
indemnification under this Section 4.8 that are in excess of such Deductible. Notwithstanding anything to the contrary contained
herein, the Purchaser shall not be required to indemnify, defend or hold harmless the Company Indemnified Parties against, or reimburse
the Company Indemnified Parties for, any Losses pursuant to Section 4.8 in a cumulative aggregate amount exceeding the aggregate
Purchase Price paid by the Purchaser to the Company.

 

(c)          For
purposes of this Section 4.8, in determining whether there has been a breach of a representation or warranty, the parties hereto
shall ignore any “materiality” or “Material Adverse Effect” qualifications.

 

4.9          Notification
of Claims.

 

(a)          Any
Person that may be entitled to be indemnified under this Agreement (an “Indemnified Party”) shall promptly notify
the party or parties liable for such indemnification (an “Indemnifying Party”) in writing of any claim in respect
of which indemnity may be sought hereunder, including any pending or threatened claim or demand by a third party that the Indemnified
Party has determined has given or could reasonably give rise to a right of indemnification under this Agreement (including a pending
or threatened claim or demand asserted by a third party against the Indemnified Party) (each, a “Third Party Claim”),
describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or demand; provided,
however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations under this
Agreement except to the extent that the Indemnifying Party is materially prejudiced by such failure.  The parties agree
that notices for claims in respect of a breach of a representation, warranty, covenant or agreement must be delivered prior to
the expiration of any applicable survival period specified in Section 6.1 for such representation, warranty, covenant or agreement;
provided, that if, prior to such applicable date, a party hereto shall have notified the other parties hereto in accordance with
the requirements of this Section 4.9(a) of a claim for indemnification under this Agreement (whether or not formal legal action
shall have been commenced based upon such claim), such claim shall continue to be subject to indemnification in accordance with
this Agreement notwithstanding the passing of such applicable date.

 

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(b)          Upon
receipt of a notice of a claim for indemnity from an Indemnified Party pursuant to Section 4.9(a) in respect of a Third Party
Claim, the Indemnifying Party may, by notice to the Indemnified Party delivered within ten (10) Business Days of the receipt of
notice of such Third Party Claim, assume the defense and control of any Third Party Claim, with its own counsel reasonably acceptable
to the Indemnified Party and at its own expense.  The Indemnified Party shall have the right to employ counsel on its
own behalf for, and otherwise participate in the defense of, any such Third Party Claim, but the fees and expenses of its counsel
will be at its own expense unless (1) the employment of counsel by the Indemnified Party at the Indemnifying Party’s expense
has been authorized in writing by the Indemnifying Party, as applicable, (2) the Indemnified Party reasonably believes there may
be a conflict of interest between the Indemnified Party and the Indemnifying Party in the conduct of the defense of such Third
Party Claim, (3) the Indemnified Party reasonably believes there are legal defenses available to it that are different from, additional
to or inconsistent with those available to the Indemnifying Party, or (4) the Indemnifying Party has not in fact employed counsel
to assume the defense of such Third Party Claim within a reasonable time after receipt of notice of the commencement of such Third
Party Claim, in each of which cases the fees and expenses of such Indemnified Party’s counsel shall be at the expense of
the Indemnifying Party.  The Indemnified Party may take any actions reasonably necessary to defend such Third Party Claim
prior to the time that it receives a notice from the Indemnifying Party as contemplated by the immediately preceding sentence.  The
Indemnified Party shall, and shall cause each of its Affiliates to, use reasonable best efforts to cooperate with the Indemnifying
Party in the defense of any Third Party Claim.  The Indemnifying Party shall not, without the prior written consent of
the Indemnified Party (which shall not be unreasonably withheld), consent to a settlement, compromise or discharge of, or the entry
of any judgment arising from, any Third Party Claim, unless such settlement, compromise, discharge or entry of any judgment does
not involve any statement, finding or admission of any fault, culpability, failure to act, violation of law or admission of any
wrongdoing by or on behalf of the Indemnified Party, and the Indemnifying Party shall (i) pay or cause to be paid all amounts arising
out of such settlement or judgment concurrently with the effectiveness of such settlement or judgment (unless otherwise provided
in such judgment), (ii) not encumber any of the material assets of any Indemnified Party or agree to any restriction or condition
that would apply to or materially adversely affect any Indemnified Party or the conduct of any Indemnified Party’s business
and (iii) obtain, as a condition of any settlement, compromise, discharge, entry of judgment (if applicable), or other resolution,
a complete and unconditional release of each Indemnified Party in form and substance reasonably satisfactory to such Indemnified
Party from any and all liabilities in respect of such Third Party Claim.  An Indemnified Party shall not settle, compromise
or consent to the entry of any judgment with respect to any claim or demand for which it is seeking indemnification from the Indemnifying
Party or admit to any liability with respect to such claim or demand without the prior written consent of the Indemnifying Party
(which consent shall not be unreasonably withheld or delayed); provided that such consent shall not be required if the Indemnifying
Party has not fulfilled any material obligations under this Section 4.9(b).

 

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(c)          In
the event the Indemnifying Party receives a notice of a claim for indemnity from an Indemnified Party pursuant to Section 4.9(a)
that does not involve a Third Party Claim, the Indemnifying Party shall notify the Indemnified Party within ten (10) Business Days
following its receipt of such notice whether the Indemnifying Party disputes its liability to the Indemnified Party under this
Agreement.  The Indemnified Party and the Indemnifying Party shall reasonably cooperate with and assist one another in
determining the validity of any such claim for indemnity by the Indemnified Party.

 

4.10         Indemnification
Payment.  In the event a claim or any claim for indemnification hereunder has been finally determined, the amount
of such final determination shall be paid by the Indemnifying Party to the Indemnified Party on demand in immediately available
funds; provided, however, that any reasonable and documented out-of-pocket expenses incurred by the Indemnified Party as a result
of such claim or Action shall be reimbursed promptly by the Indemnifying Party upon receipt of an invoice describing such costs
incurred by the Indemnified Party.  A claim or an Action, and the liability for and amount of damages therefor, shall
be deemed to be “finally determined” for purposes of this Agreement when the parties hereto have so determined by mutual
agreement or, if disputed, when a final non-appealable governmental order has been entered into with respect to such claim or Action.

 

4.11         Exclusive
Remedies. Each party hereto acknowledges and agrees that following the Closing, the indemnification provisions hereunder shall
be the sole and exclusive remedies of the parties hereto for monetary damages for any breach of the representations, warranties
or covenants contained in the this Agreement; provided, however, that nothing herein shall in any way limit a Person’s remedies
in respect of fraud, criminal activity or willful misconduct by any other Person in connection with the transactions contemplated
hereby. No investigation of the Company by the Purchaser, or of the Purchaser by the Company, whether prior to or after the date
of this Agreement, shall limit any Indemnified Party’s exercise of any right hereunder or be deemed to be a waiver of any
such right. The parties agree that any indemnification payment made pursuant to this Agreement shall be treated as an adjustment
to the Purchase Price for Tax purposes, unless otherwise required by law. Nothing in this Section 4.11 shall limit a Person’s
right to seek any equitable relief to which such Person may be entitled.

 

4.12         Listing
of Common Stock.  The Company will use its reasonable best efforts to list the Class A Common Stock for quotation
on the NASDAQ Global Select Market following the receipt of the Shareholder Approvals and to thereafter maintain the listing of
the Class A Common Stock on the NASDAQ Global Select Market.

 

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4.13        Filings;
Other Actions.

 

(a)          The
Purchaser and the Company will cooperate and consult with each other and use commercially reasonable efforts to prepare and file
all necessary and customary documentation, to effect all necessary and customary applications, notices, petitions, filings and
other documents, and to obtain the Shareholder Approvals and any other necessary and customary permits, consents, orders, approvals
and authorizations of, or any exemption by, all third parties and Governmental Entities, (i) necessary or advisable to consummate
the transactions contemplated by the Transaction Documents, and to perform the covenants contemplated by the Transaction Documents,
in each case required of it, and (ii) with respect to the Purchaser, only to the extent typically provided by the Purchaser to
such third parties or Governmental Entities, as applicable, under the Purchaser’s policies consistently applied and subject
to such confidentiality requests as the Purchaser may reasonably seek.  Each of the parties hereto shall execute and
deliver both before and after the Closing such further certificates, agreements and other documents and take such other actions
as the other party may reasonably request to consummate or implement such transactions or to evidence such events or matters, subject,
in each case, to clauses (i) and (ii) of the first sentence of this Section 4.13(a).  The Purchaser and the Company will
each use their commercially reasonable efforts to promptly obtain or submit, and the Company and the Purchaser will cooperate as
may reasonably be requested by the Purchaser or the Company, as the case may be, to help the Purchaser and the Company promptly
obtain or submit, as the case may be, as promptly as practicable, the approvals and authorizations of, any additional filings and
registrations with, and any additional notifications to, all notices to and, to the extent required by law, consents, approvals
or exemptions from bank holding company and bank regulatory authorities, for the transactions contemplated by the Transaction Documents
(in each case to the extent it has not done so prior to the date of this Agreement), subject, in each case, to clauses (i) and
(ii) of the first sentence of this Section 4.13(a).

 

(b)          Notwithstanding
Section 4.13(a) or Section 4.13(c), in no event shall the Purchaser be required to (1) accept any condition of a Governmental
Entity with respect to any regulatory filing or approval which could jeopardize or potentially have the effect of jeopardizing
any other investment opportunities (now or hereafter existing) of the Purchaser or any of its Affiliates, (2) cause the Purchaser
to become a bank holding company, (3) cause the Purchaser to be required to agree to provide capital to the Company or any Subsidiary
other than the aggregate Purchase Price to be paid for the Preferred Shares to be purchased by it pursuant to the terms of this
Agreement, (4) accept a Burdensome Condition imposed by a Governmental Entity or (5) provide information on its investors solely
in their capacities as limited partners or other similar passive equity investors, and the Purchaser shall be entitled to request
confidential treatment from any Governmental Entity and not disclose to the Company any information that is confidential and proprietary
to the Purchaser.

 

(c)          If
so requested by the Federal Reserve in connection with the transactions contemplated hereby, the Purchaser shall, and shall cause
its Affiliates to, enter into one or more passivity and non-association commitments and provide such other non-control and related
commitments as the Federal Reserve may require (in each case, in form and substance reasonably satisfactory to the Federal Reserve),
subject, in each case, to clauses (i) and (ii) of the first sentence of Section 4.13(a) and all of Section 4.13(b).

 

(d)         The
Purchaser will have the right to review in advance, and to the extent practicable the Company will consult with the Purchaser
with respect to (subject to laws relating to the exchange of information and confidential information related to the Purchaser),
all the information (other than confidential information) relating to the Purchaser, and any of its Affiliates, which appears
in any filing made with, or written materials submitted to, any third party or any Governmental Entity in connection with the
transactions to which it will be party contemplated by this Agreement; provided, however, that (i) no Purchaser shall have the
right to review any such information relating to another Purchaser, (ii) a Purchaser
shall not be required to disclose to the Company any information that is confidential and proprietary to such Purchaser, and (iii)
with respect to each of _____________and  _____________, its identity shall not be disclosed in any filing or public announcement without
its prior written consent.  In exercising the foregoing right, each of
the parties hereto agrees to act reasonably and as promptly as practicable.  Each of the parties hereto agrees to keep
the other party reasonably apprised of the status of matters referred to in this Section 4.13.

 

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4.14        Shareholders’
Meeting.  

 

(a)          The
Company shall call a special meeting of its shareholders (“Special Meeting”) to be held as promptly as practicable
following the Closing Date, but in no event later than the 120 days following the Closing Date, to vote on proposals (the “Shareholder
Proposals”) to approve (i) the Common Stock Articles of Amendment, and (ii) the Stock Conversion for purposes of Rule
5635 of the NASDAQ Stock Market Rules (the “Shareholder Approvals”). The Board shall recommend to the Company’s
shareholders that such shareholders vote in favor of the Shareholder Proposals.  

 

(b)          In
connection with the Special Meeting, the Company shall promptly prepare and file (but in no event more than 30 days after the Closing
Date) with the Commission a preliminary proxy statement, shall use its reasonable best efforts to respond to any comments of the
Commission or its staff and to cause a definitive proxy statement related to the Special Meeting (the “Proxy Statement”)
to be mailed to the Company’s shareholders not more than 10 Business Days after clearance thereof by the Commission, and
shall use its reasonable best efforts to solicit proxies for such Shareholder Approvals, including, without limitation, engaging
a nationally recognized proxy solicitation firm to assist in obtaining Shareholder Approvals.  The Company shall notify
the Purchaser promptly of the receipt of any comments from the SEC with respect to the preliminary proxy statement or the definitive
Proxy Statement and of any request by the SEC for amendments or supplements to such preliminary proxy statement or for additional
information (but the Company shall not provide the Purchaser with any material, nonpublic information, unless requested by the
Purchaser and pursuant to a written agreement regarding the confidentiality and use of such information).  If at any
time prior to the Special Meeting there shall occur any event that is required to be set forth in an amendment or supplement to
the Proxy Statement, the Company shall as promptly as practicable prepare and mail to its shareholders such an amendment or supplement.  In
the event that a Shareholder Proposal is not approved at the Special Meeting, the Company shall include a proposal to approve (and
the Board shall recommend approval of) such Shareholder Proposal at an annual or a special meeting of its shareholders to be held
no less than once in each subsequent six (6) month period beginning on the date of the Special Meeting until such approval is obtained.
Promptly following receipt of the Shareholder Approvals, and in no event later than two (2) Business Days following receipt of
the Shareholder Approvals, the Company shall file the Common Stock Articles of Amendment with the North Carolina Secretary.

 

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4.15        Limitation
on Beneficial Ownership.  Except as provided herein, the Purchaser (and its Affiliates or any other Persons with
which it is acting in concert or whose holdings would otherwise be required to be aggregated for purposes of the BHC Act or the
Change in Bank Control Act) will not be entitled to purchase a number of Preferred Shares that would result in the Purchaser becoming,
directly or indirectly, the beneficial owner (as determined under Rule 13d-3 under the Exchange Act) of more than (a) with respect
to ______________, 9.9% of the shares of Class A Common Stock outstanding (assuming the Stock Conversion and based on the number of shares
outstanding as of the Closing Date) and 14.9% of the total number of shares of Class A Common Stock and Class B Common Stock outstanding
(assuming the Stock Conversion and based on the number of shares outstanding as of the Closing Date), (b) with respect to
the ______________ Purchasers, 9.9% of the shares of Class A Common Stock outstanding (assuming the Stock Conversion and based on the
number of shares outstanding as of the Closing Date) and 14.0% of the total number of shares of Class A Common Stock and Class
B Common Stock outstanding (assuming the Stock Conversion and based on the number of shares outstanding as of the Closing Date),
and (c) with respect to all other Purchasers, 7.66% of the shares of Class A Common Stock outstanding (assuming the Stock Conversion
and based on the number of shares outstanding as of the Closing Date).

 

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

 

4.17        Governance
Matters.

 

(a)          Upon
______________’s written request, the Company shall cause the natural Person nominated by ______________ (the “Designated Director”)
to be elected or appointed to the Board of Directors of the Bank (the “Bank Board”), subject to satisfaction
of all legal, bank regulatory, and governance requirements regarding service as a member of the Bank Board.  The Company
and the Board shall cause the Designated Director to be appointed to the Board, subject to all legal, bank holding company regulatory,
securities listing and governance requirements regarding service as a member of the Board, as soon as legally possible.

 

(b)          With
respect to each annual meeting of shareholders following the Closing Date and for so long as ______________ together with its Affiliates
owns in the aggregate more than 4.9% of the total outstanding shares of Class A Common Stock calculated on a Pro Forma Basis (a “Qualifying
Ownership Interest”), upon ______________’s written request, the Designated Director designated by ______________ shall, subject
to all applicable legal, bank holding company regulatory, securities listing and governance requirements, be nominated by the Nominating
Committee of the Board to serve on the Board and on the Bank Board.  The Company shall use its reasonable best efforts
to have the Designated Director elected as a director of the Company by the shareholders of the Company and the Company shall solicit
proxies for the Designated Director to the same extent as it does for any of its other nominees to the Board.

 

(c)          With
respect to ______________, so long as it, in the aggregate together with its Affiliates, owns a Qualifying Ownership Interest, the Designated
Director designated by it shall, subject to all applicable legal, bank holding company regulatory, securities listing and governance
requirements regarding service as a committee member), be appointed to two committees of each of the Board and the Bank Board identified
by such Designated Director. The Designated Director shall not serve as the chairperson of any committee.  

 

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(d)          With
respect to ______________, so long as it, in the aggregate together with its Affiliates, owns a Qualifying Ownership Interest, upon the
death, disability, resignation, retirement, disqualification or removal from office of the Designated Director designated by it,
it shall have the right to designate the replacement for the Designated Director, which replacement shall satisfy all legal, bank
holding company regulatory, bank regulatory securities listing and governance requirements regarding service as a member of the
Board and the Bank Board, as applicable.  The Board shall use its reasonable best efforts to take all action required
to fill the vacancy resulting therefrom with such replacement (including such replacement being the Nominating Committee’s
nominee to serve on the Board and the Bank Board, using all reasonable best efforts to have such person elected as a director of
the Company by the shareholders of the Company and the Company soliciting proxies for such person to the same extent as it does
for any of its other nominees to the Board).

 

(e)          With
respect to ______________, so long as it, in the aggregate together with its Affiliates, owns a Qualifying Ownership interest, in addition
to ______________’s right to designate the Designated Director, ______________, subject to applicable laws, will be entitled to designate
a natural Person reasonably acceptable to the Board and the Bank Board (the “Observer”) to receive a standing
invitation to attend meetings of the Board and the Bank Board (including any meetings of committees thereof) in a nonvoting observer
capacity. The Observer shall have no right to vote on any matters presented to the Board, the Bank Board or any committee thereof.
The foregoing rights granted to ______________ are subject to the Company’s and the Bank’s respective right to withhold information
and to exclude such Observer from any meeting, or portion thereof, but only to the extent (i) reasonably determined by the Chairman
of the Board or a majority of the members of the Board (or the Chairman of the Bank Board or a majority of the members of the Bank
Board, as applicable) necessary for purposes of competitive factors or attorney-client privilege, (ii) directly related to ______________’s
investment or (iii) the Board or the Bank Board, as applicable, determines in good faith, after consultation with counsel, that
attendance by the Observer would conflict with fiduciary or regulatory requirements under applicable law.

 

(f)          The
Designated Director shall be entitled to the same compensation, including fees, and the same indemnification and insurance coverage
in connection with his or her role as a director as the other members of the Board or the Bank Board, as applicable, and the Designated
Director shall be entitled to reimbursement for documented, reasonable out-of-pocket expenses incurred in attending meetings of
the Board or the Bank Board, or any committee thereof, to the same extent as the other members of the Board or the Bank Board,
as applicable.  The Company shall notify the Designated Director of all regular meetings and special meetings of the
Board or the Bank Board and of all regular and special meetings of any committee of the Board or the Bank Board of which the Designated
Director is a member in accordance with the applicable Bylaws.  The Company and the Bank shall provide the Designated
Director with copies of all notices, minutes, consents and other material that they provide to all other members of their respective
boards of directors concurrently as such materials are provided to the other members.

 

(g)          With
respect to ______________, at such time as it, in the aggregate together with its Affiliates, no longer owns a Qualifying Ownership Interest,
it shall have no further rights under this Section 4.17 and, at the written request of the Board, it shall use all reasonable efforts
to cause the Designated Director designated by it to promptly resign from the Board and the Bank Board.

 

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

 

4.19        Gross-Up
Rights.

 

(a)          Sale
of New Securities.  After the Closing, for so long as the Purchaser owns, in the aggregate together with its Affiliates,
a Qualifying Ownership Interest (before giving effect to any applicable proposed issuance triggering the provisions in this Section
4.19), at any time that the Company proposes to make any public or nonpublic offering or sale of any equity (including Common Stock,
Class A Common Stock, Class B Common Stock or Company Preferred Stock), or any securities, options or debt that are convertible
or exchangeable into or exercisable for equity or that includes an equity component (such as an equity “kicker”) (including
any hybrid security) (any such securities, “New Securities”), other than the issuance and sale of New Securities
(i) in connection with the exercise of the TARP Warrant, (ii) upon conversion of Preferred Shares into Class A Common Stock
or Class B Common Stock as set forth in the Articles of Amendment, (iii) to employees, officers, directors or consultants of the
Company or a Subsidiary pursuant to Benefit Plans or employee benefit plans or compensatory arrangements that have been Previously
Disclosed or that are hereafter approved by the Board (including upon the exercise of employee stock options granted pursuant to
any such plans or arrangements), or (iv) as consideration in connection with any bona fide, arm’s length, direct or
indirect, merger, acquisition or similar transaction or joint venture, strategic alliance, license agreement or other similar commercial
transactions, the Purchaser shall first be afforded the opportunity to acquire from the Company for the same price and on the same
terms (except the Purchaser may elect to receive such securities in non-voting form) as such New Securities are proposed to be
offered to others, up to the amount of such New Securities to be offered in the aggregate required to enable it to maintain its
proportionate equivalent interest in the Company’s outstanding capital stock in the manner described in the following sentence.
New Securities that the Purchaser shall be entitled to purchase in the aggregate shall be determined by multiplying (x) the
total number or principal amount of such offered New Securities by (y) a fraction, the numerator of which is the number of shares
of Class A Common Stock and Class B Common Stock held by the Purchaser (assuming the effectiveness of the Stock Conversion) and
the denominator of which is the number of shares of Class A Common Stock and Class B Common Stock then outstanding (assuming the
effectiveness of the Stock Conversion and in calculating the numerator and the denominator, before giving effect to any proposed
issuances triggering the provisions of this Section 4.19).  Notwithstanding anything herein to the contrary, in no event
shall the Purchaser have the right to purchase New Securities hereunder to the extent that such purchase would result in the Purchaser
exceeding the ownership limitations of the Purchaser set forth in Section 4.15. Subject to Section 4.19(g), the provisions
of this Section 4.19 shall not be applicable to any New Securities offered or issued at the written direction of the applicable
federal banking regulator of the Company or the Bank.

 

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(b)          Notice.  In
the event the Company proposes to offer or sell New Securities that are subject to the Purchaser’s rights under Section 4.19(a),
it shall give the Purchaser written notice of its intention, specifying the price (or range of prices), anticipated amount of securities,
timing and other terms upon which the Company proposes to offer the same (including, in the case of a registered public offering
and to the extent possible, a copy of the prospectus included in the registration statement filed with respect to such offering),
at least 15 Business Days prior to the proposed offer, issuance or sale.  The Purchaser shall have ten (10) Business
Days from the date of receipt of such a notice to notify the Company in writing that it intends to exercise its rights provided
in Section 4.19(a) and as to the amount of New Securities the Purchaser desires to purchase, up to the maximum amount calculated
pursuant to Section 4.19(a).  Such notice shall constitute a nonbinding agreement of the Purchaser to purchase the
amount of New Securities so specified at the price and other terms set forth in the Company’s notice to it.  The
failure of the Purchaser to respond within such ten (10) Business Day period shall be deemed to be a waiver of the Purchaser’s
rights under Section 4.19 only with respect to the offering described in the applicable notice.

 

(c)          Purchase
Mechanism.  If the Purchaser exercises its rights provided in Section 4.19(a), the closing of the purchase of
the New Securities with respect to which such rights have been exercised shall take place within 30 days after the giving of notice
of such exercise; provided that, if such issuance is subject to shareholder or regulatory approval or other consents, such 30 day
period shall be extended until the expiration of ten (10) Business Days after all such approvals or other consents have been received,
but in no event later than 90 days from the date of the Company’s initial notice pursuant to Section 4.19(b).  Each
of the Company and the Purchaser agrees to use commercially reasonable efforts to secure any regulatory or shareholder approvals
or other consents, and to comply with any law necessary in connection with the offer, sale and purchase of such New Securities.

 

(d)          Failure
of Purchase.  In the event the Purchaser fails to exercise its rights provided in Section 4.19(a) within the
ten (10) Business Day period described in Section 4.19(b) or, if so exercised, the Purchaser is unable to consummate such
purchase within the time period specified in Section 4.19(c) because of its failure to obtain any required regulatory approval
or other consents, the Company shall thereafter be entitled (during the period of 90 days following the conclusion of the applicable
period) to sell or enter into an agreement (pursuant to which the sale of the New Securities covered thereby shall be consummated,
if at all, within 90 days from the date of said agreement) to sell the New Securities not elected to be purchased pursuant to this
Section 4.19 or that the Purchaser is unable to purchase because of such failure to obtain any such consent or approval, at
a price and upon terms, taken together in the aggregate, no more favorable to the purchasers of such New Securities than were specified
in the Company’s notice to the Purchaser. Notwithstanding the foregoing, if such sale is subject to the receipt of any regulatory
or shareholder approval or consent or the expiration of any waiting period, the time period during which such sale may be consummated
shall be extended until the expiration of ten (10) Business Days after all such approvals or consents have been obtained or waiting
periods expired, but in no event shall such time period exceed 120 days from the date of the applicable agreement with respect
to such sale.  In the event the Company has not sold the New Securities or entered into an agreement to sell the New
Securities within said 90 day period (or sold and issued New Securities in accordance with the foregoing within 90 days from the
date of said agreement (as such period may be extended in the manner described above for a period not to exceed 120 days from the
date of said agreement)), the Company shall not thereafter offer, issue or sell such New Securities without first offering such
securities to the Purchaser in the manner provided above.

 

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(e)          Non-Cash
Consideration.  In the case of the offering of New Securities for consideration in whole or in part other than cash,
including securities acquired in exchange therefor (other than securities by their terms so exchangeable), the consideration other
than cash shall be deemed to be the fair value thereof as reasonably determined by the Board; provided, however, that such fair
value as reasonably determined by the Board shall not exceed the aggregate market price of the securities being offered as of the
date the Board authorizes the offering of such securities.

 

(f)          Cooperation.  The
Company and the Purchaser shall cooperate in good faith to facilitate the exercise of the Purchaser’s rights under this Section 4.19,
including securing any required approvals or consents.

 

(g)          Exception
to Time Periods. Notwithstanding the foregoing provisions of this Section 4.19, in the event that New Securities are to be
offered or issued by the Company at the written direction of the applicable federal banking regulator of the Company or the Bank,
the Company may proceed to complete such issuance prior to the expiration of such time periods, so long as provision is made in
such issuance such that subsequent to the time periods set forth in Section 4.19(b) and Section 4.19(c) either, as elected by the
Company, (i) purchasers of such New Securities will be obligated to transfer that portion of such New Securities to any Purchaser
properly electing to participate in such issuance pursuant to this Section 4.19 sufficient to satisfy the terms of this Section
4.19 or (ii) the Company shall issue an incremental amount of such New Securities to those Purchasers properly electing to participate
in such issuance pursuant to this Section 4.19 sufficient to satisfy the terms of this Section 4.19.

 

(h)          Termination.  The
Purchaser’s rights under this Section 4.19, if any, shall expire on the earlier of the following: (i) the fifth (5th)
anniversary of the Closing Date; and (ii) at such time that the Purchaser, in the aggregate together with its Affiliates, first
ceases to own a Qualifying Ownership Interest.

 

(i)          Assignment
of Rights.  The Purchaser may only assign, transfer or otherwise convey the right to exercise the subscription rights
set forth in this Section 4.19 to an Affiliate of the Purchaser that agrees in writing for the benefit of the Company to be bound
by the terms of this Agreement, and any such assignee shall be included in the term “Purchaser” for purposes of this
Section 4.19.

 

4.20         Most
Favored Nation. During the period from the date of this Agreement through the Closing, the Company shall not, and shall cause
the Subsidiaries not to, enter into any additional, or modify any existing, agreements with any existing or future investors in
the Company or any of the Subsidiaries that have the effect of establishing rights or otherwise benefiting such investor in a manner
more favorable in any material respect than the rights and benefits established in favor of the Purchaser by the Transaction Documents,
unless, in any such case, the Purchaser has been provided with such rights and benefits.

 

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4.21         Preservation
of Tax Benefits. Until the first day of a taxable year of the Company as to which the Board determines that no Tax Benefit
of the Company, or any direct or indirect Subsidiary thereof, may be carried forward, the Company shall not take any action with
respect to its stock or any “options” (within the meaning of Section 1.382-4(d) of the Treasury Regulations) to acquire
its stock following the Closing, unless the Company shall have first received an unqualified opinion (based on reasonable assumptions
and factual representations) of tax accountants of recognized expertise or a private letter ruling from the Internal Revenue Service,
in either case to the effect that such action would not cause an “ownership change” of the Company (within the meaning
of Section 382(g) of the Code and applicable Treasury Regulations), taking into account the maximum reasonably expected effect
of the exercise of any outstanding “options” (as defined above).

 

4.22         Reservation
of Underlying Shares. Subject to receipt of the Shareholder Approvals, the Company shall reserve, and will continue to reserve,
free of any preemptive or similar rights of shareholders of the Company, a number of unissued shares of Class A Common Stock and
Class B Common Stock, sufficient to issue and deliver the Underlying Shares into which the Preferred Shares are convertible.

 

4.23         Corporate
Opportunities. The Company and the Purchaser acknowledge that each of ______________ (and its Affiliates and related investment funds)
and each of the ______________ Purchasers (and their respective Affiliates, related investment funds and investment advisers) (collectively,
the “Primary Investors”) may review the business plans and related proprietary information of any enterprise,
including enterprises which may have products or services which compete directly or indirectly with those of the Company and its
Subsidiaries, and may trade in the securities of such enterprise. No Primary Investor shall be precluded or in any way restricted
from investing or participating in any particular enterprise, or trading in the securities thereof whether or not such enterprise
has products or services that compete with those of the Company and its Subsidiaries. The Company and the Purchaser expressly acknowledge
and agree that (a) each Primary Investor has the right to, and shall have no duty (contractual or otherwise) not to, directly or
indirectly, engage in the same or similar business activities or lines of business as the Company and its Subsidiaries, and (b)
in the event that a Primary Investor or the Designated Director acquires knowledge of a potential transaction or matter that may
be a corporate opportunity for the Company or any of its Subsidiaries, other than through a communication from the Company or any
of its Affiliates concerning such opportunity, such Primary Investor or the Designated Director shall have no duty (contractual
or otherwise) to communicate or present such corporate opportunity to the Company or any of its Subsidiaries, and shall not be
liable to the Company or any of its Subsidiaries or any other Purchasers or shareholders of the Company for breach of any duty
(contractual or otherwise) by reason of the fact such Primary Investor, directly or indirectly, pursues or acquires such opportunity
for itself, directs such opportunity to another Person, or does not present such opportunity to the Company or its Subsidiaries.

 

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4.24         Information
Rights. With respect to each of ______________ and each ______________ Purchaser, for so long as it owns, in the aggregate together with
its Affiliates, a Qualifying Ownership Interest and beginning with the first full month following the Closing, the Company shall
make available to it (but, with respect to each ______________ Purchaser only, the Company shall not send, deliver or communicate the
following materials or information to any ______________ Purchaser without a prior written request from such ______________ Purchaser)
(a) the materials delivered to the Board, the Bank Board, and the committees thereof; provided, however, that the Company shall
not be required to deliver that portion of such materials with respect to which such delivery would (i) reasonably be expected
to constitute a waiver of the attorney-client privilege, (ii) reasonably be expected to result in a breach of any contractual confidentiality
obligation of the Company or the Bank or (iii) violate applicable law; (b) promptly following approval by the Board or the
Bank Board, as applicable, the Company’s and the Bank’s next annual budgets (the “Budgets”); (c)
no later than 90 days after the end of each fiscal year, audited annual consolidated financial statements of the Company reported
upon by its independent public accountants; (d) no later than 45 days after the end of each of the first three quarters of each
year, unaudited quarterly consolidated financial statements of the Company (without footnotes) and a comparison of such quarter’s
results with the results projected by the then-current Budgets; and (e) no later than 20 days after the end of each month, unaudited
monthly financial statements of the Company and the Bank (without footnotes) and a comparison of such month’s results with
the results projected by the then-current Budgets.

 

4.25         Use
of Proceeds. The Company shall use the proceeds from the sale of the Preferred Shares hereunder to (a) support the Bank’s
disposition of selected classified and non-performing assets in accordance with the Bank’s asset disposition plan Previously
Disclosed pursuant to this Agreement, (b) redeem or repurchase the TARP Preferred Stock and repurchase the TARP Warrant and (c)
support the operations of the Company and the Bank. It is the reasonable belief of the Company that the proceeds to the Company
from the sale of the Preferred Shares hereunder will be sufficient for all such purposes and that the redemption or repurchase
of the TARP Preferred Stock and repurchase of the TARP Warrant will be effected in proximity with or within a reasonable period
after the Closing.

 

4.26         Conduct
of Business. From the date hereof until the earlier of the Closing Date or the termination of this Agreement in accordance
with its terms, except as contemplated by this Agreement, the Company will, and will cause its Subsidiaries to, operate their business
in the ordinary course consistent with past practice, preserve intact the current business organization of the Company, use commercially
reasonable efforts to retain the services of their employees, consultants and agents, preserve the current relationships of the
Company and its Subsidiaries with material customers and other Persons with whom the Company and its Subsidiaries have and intend
to maintain significant relations, maintain all of its operating assets in their current condition (normal wear and tear excepted)
and will not take or omit to take any action that would constitute a breach of Section 3.1(l).

 

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4.27         Avoidance
of Control.

 

(a)          Notwithstanding
anything to the contrary in this Agreement, neither the Company nor any Subsidiary shall take any action (including, without limitation,
any redemption, repurchase, rescission or recapitalization of Common Stock, or securities or rights, options or warrants to purchase
Common Stock, or securities of any type whatsoever that are, or may become, convertible into or exchangeable into or exercisable
for Common Stock in each case, where the Purchaser is not given the right to participate in such redemption, repurchase, rescission
or recapitalization to the extent of the Purchaser’s pro rata proportion), that would cause (i) the Purchaser’s equity
of the Company (together with equity owned by the Purchaser’s Affiliates) to exceed 33.3% of the Company’s total equity
(provided that there is no ownership or control in excess of 9.9% of any class of voting securities of the Company by the Purchaser,
together with the Purchaser’s Affiliates) or (ii) the Purchaser’s ownership of any class of voting securities of the
Company (together with the ownership by the Purchaser’s Affiliates (as such term is used under the BHC Act) of voting securities
of the Company) to exceed 9.9%, in each case without the prior written consent of the Purchaser, or to increase to an amount that
would constitute “control” under the BHC Act, the Change in Bank Control Act or any rules or regulations promulgated
thereunder (or any successor provisions) or otherwise cause the Purchaser to “control” the Company under and for purposes
of the BHC Act, the Change in Bank Control Act or any rules or regulations promulgated thereunder (or any successor provisions).
Notwithstanding anything to the contrary in this Agreement, the Purchaser (together with its Affiliates) shall not have the ability
to purchase more than 33.3% of the Company’s total equity or exercise any voting rights of any class of securities in excess
of 9.9% of the total outstanding voting securities of the Company. In the event either the Company or the Purchaser breaches its
obligations under this Section 4.27 or believes that it is reasonably likely to breach such an obligation, it shall promptly notify
the other party and shall cooperate in good faith with such party to modify ownership or make other arrangements or take any other
action, in each case, as is necessary to cure or avoid such breach.

 

(b)          Notwithstanding
anything to the contrary in this Agreement, prior to the Stock Conversion, the Company shall not take any action, directly or indirectly,
through its Subsidiaries or otherwise, that would cause an adjustment to the Conversion Price or Conversion Rate (each, as defined
in the Articles of Amendment) under the Articles of Amendment such that it would cause the Purchaser’s equity of the Company
(together with equity owned by the Purchaser’s Affiliates, assuming Stock Conversion, to exceed 19.99% of the Company’s
total equity, without the prior written consent of the Purchaser.

 

4.28         FDIC
Final Statement of Policy on Qualifications for Failed Bank Acquisitions. So long as the Purchaser holds any Securities, the
Company will not, without the consent of the Purchaser, take any action, directly or indirectly, through its Subsidiaries or otherwise,
that the Board believes in good faith would reasonably be expected to cause the Purchaser to be subject to transfer restrictions
or other covenants of the FDIC Final Statement of Policy on Qualifications for Failed Bank Acquisitions as in effect at the time
of taking such action.

 

ARTICLE V.

 

CONDITIONS PRECEDENT TO CLOSING

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(h)          Articles
of Amendment.  The Company shall have filed the Articles of Amendment with the North Caroline Secretary, and the
Articles of Amendment shall be in full force and effect.

 

(i)          Minimum
Gross Proceeds.  The Company shall have received (or shall receive concurrently with the Closing) aggregate gross
proceeds from the sale of the Preferred Shares to all Purchasers of not less than $55 million.

 

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

 

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(k)          Absence
of Bank Regulatory Issues. The purchase of Preferred Shares by the Purchaser shall not (i) cause the Purchaser or any of its
Affiliates to violate any banking regulation, (ii) require the Purchaser or any of its Affiliates to file a prior notice under
the Change In Bank Control Act, or otherwise seek prior approval of any banking regulator, (iii) require the Purchaser or any of
its Affiliates to become a bank holding company or otherwise serve as a source of strength for the Company or any Subsidiary, (iv)
cause the Purchaser, together with any other Person whose Company securities would be aggregated with the securities of the Company
held by the Purchaser for purposes of any banking regulation or law, to collectively be deemed to own, control or have the power
to vote securities which (assuming, for this purpose only, full conversion and/or exercise of such securities by the Purchaser
and such other Persons) would represent more than 9.9% of any class of voting securities of the Company outstanding at such time,
(v) with respect to each ______________ Purchaser, cause such Purchaser, together with any other Person whose Company securities would
be aggregated with securities of the Company held by such ______________ Purchaser for purposes of any banking regulation or law, to
collectively be deemed to own or control securities which (assuming, for this purpose only, full conversion and/or exercise of
such securities by such Purchaser and such other Persons) would represent more than 14.0% of the Company’s total equity outstanding
at such time, or (vi) with respect to ______________, cause ______________, together with any other Person whose Company securities would be
aggregated with securities of the Company held by ______________ for purposes of any banking regulation or law, to collectively be deemed
to own or control securities which (assuming for this purpose only, full conversion and/or exercise of such securities by ______________
and such other Persons) would represent more than 14.99% of the Company’s total equity outstanding at such time. The absences
of the foregoing circumstances are herein referred to collectively as the “Absence of Required Approvals”.

 

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

 

(m)          Use
of Proceeds. Each of ______________ and each ______________ Purchaser shall be reasonably satisfied that the proceeds to the Company
from the sale of Preferred Shares hereunder are sufficient for the purposes, and for use in the manners, set forth in Section 4.25.

 

(n)          Key
Persons. Each individual employed as of the date hereof by the Bank in the position of President and Chief Executive Officer,
Chief Financial Officer, Chief Credit Officer, Chief Administrative Officer, and Chief Banking Officer shall remain employed by
the Bank (except in the case of death or incapacitation), as applicable, in the same position, and no such individual shall have
indicated an intention to resign from such position.

 

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(o)          Tax
Attributes; 382 Opinion. Since the date of this Agreement, (i) there shall have been no material change to any rules under
Sections 382, 383 or 384 of the Code that adversely affect the application of Sections 382, 383 or 384 of the Code to any net operating
losses, unrealized built-in losses or other tax attributes of the Company that exist on or after the Closing Date, and (ii) each
of ______________ and each ______________ Purchaser shall have received an opinion of Grant Thornton LLP to the effect that an Ownership
Change (as defined by Section 382(g) of the Code) has not occurred and will not occur as a result of the transactions contemplated
herein.

 

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

 

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

 

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

 

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

 

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

 

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

 

(f)          Minimum
Gross Proceeds.  The Company shall have received (or shall receive concurrently with the Closing) aggregate gross
proceeds from the sale of the Preferred Shares to all Purchasers of not less than $55 million.

 

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

 

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ARTICLE VI.

 

MISCELLANEOUS

 

6.1           Survival.
The representations and warranties of the parties hereto contained in this Agreement shall survive in full force and effect until
the date that is 18 months after the Closing Date (or until final resolution of any claim or action arising from the breach of
any such representation and warranty, if notice of such breach was provided prior to the end of such period), at which time they
shall terminate and no claims shall thereafter be made for indemnification or otherwise under Section 4.7, for breaches of representations
or warranties thereafter, except the Company Specified Representations and the Purchaser Specified Representations shall survive
the Closing indefinitely. The covenants and agreements set forth in this Agreement shall survive until the earliest of the duration
of any applicable statute of limitations, until performed or no longer operative in accordance with their respective terms.

 

6.2           Fees
and Expenses.  

 

(a)          Except
as otherwise specifically provided in Section 6.2(b) and Section 6.2(c), the parties hereto shall be responsible for the payment
of all expenses incurred by them in connection with the preparation and negotiation of the Transaction Documents and the consummation
of the transactions contemplated hereby.  The Company shall pay all amounts owed to the Placement Agents relating to
or arising out of the transactions contemplated hereby.  The Company shall pay all Transfer Agent fees, stamp taxes and
other taxes and duties levied in connection with the sale and issuance of the Securities to the Purchasers.

 

(b)          The
Company acknowledges that ______________ has expended significant time and money in connection with this Agreement. To induce it to execute
this Agreement and to expend the resources necessary to effect its investment in Preferred Shares, the Company agrees to reimburse
______________ for up to $50,000 of its reasonably documented out-of-pocket expenses (including, without limitation, legal fees and expenses)
incurred in connection with its due diligence, negotiation of this Agreement and other activities in evaluating the merits of its
investment described herein; provided, however, that ______________ may request the Company’s prior consent to reimbursable expenditures
in excess of the aforesaid limit and the Company will not unreasonably withhold such consent.

 

(c)          The
Company acknowledges that the ______________ Purchasers have expended significant time and money in connection with this Agreement.
To induce the ______________ Purchasers to execute this Agreement and to expend the resources necessary to effect their investment
in Preferred Shares, the Company agrees to reimburse the ______________ Purchasers for up to $50,000 in the aggregate of their reasonably
documented out-of-pocket expenses (including, without limitation, legal fees and expenses) incurred in connection with their due
diligence, negotiation of this Agreement and other activities in evaluating the merits of their investments described herein; provided,
however, that the ______________ Purchasers may request the Company’s prior consent to reimbursable expenditures in excess of
the aforesaid limit and the Company will not unreasonably withhold such consent.

 

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6.3           Entire
Agreement.  The Transaction Documents, together with the Exhibits hereto, contain the entire understanding of the
parties with respect to the subject matter hereof and supersede all prior agreements, understandings, discussions and representations,
oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and
schedules. At or after the Closing, and without further consideration, the Company and the Purchaser will execute and deliver to
the other such further documents as may be reasonably requested in order to give practical effect to the intention of the parties
under the Transaction Documents.

 

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

 

If to the Company:

 

NewBridge Bancorp

1501 Highwoods Boulevard

Greensboro, North Carolina
27410

Attention:  Pressley
A. Ridgill

Telephone: (336) 369-0900

Fax: (336) 369-0935

 

With a copy to:

 

Brooks, Pierce, McLendon,
Humphrey & Leonard, LLP

230 N. Elm Street, Suite
2000

Greensboro, North Carolina
27401

Attention: Robert A.
Singer, Esq.

Telephone: (336) 373-8850

Fax: (336) 378-1001

 

If to Purchaser:

 

At its addresses on the
signature page hereto;

 

or such other address for receipt of notices
and communications as may be designated in writing hereafter, in the same manner, by a Person.

 

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6.5           Amendments;
Waivers; No Additional Consideration.  No provision of this Agreement may be waived or amended except in a written
instrument signed, in the case of an amendment, by the Company and the Purchaser or, in the case of a waiver, by the party against
whom enforcement of any such waiver is sought. No waiver of any default with respect to any provision, condition or requirement
of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of
any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder
in any manner impair the exercise of any such right. No consideration shall be offered or paid to any Purchaser to amend or consent
to a waiver or modification of any provision of any Transaction Document unless the same consideration (pro rata with respect to
each Purchaser’s Subscription Amount) is also offered to all Purchasers.

 

6.6           Construction.

 

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

 

(b)          The
words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this Agreement. References to Articles, Sections, Exhibits
and Schedules are to Articles, Sections, Exhibits and Schedules of this Agreement unless otherwise specified. All Exhibits and
Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in
full herein. Any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein, shall have the meaning set
forth in this Agreement. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular.
Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall
be deemed to be followed by the words “, but not limited to,”, whether or not they are in fact followed by those words
or words of like import. Except as the context may otherwise require, references to any agreement or contract are to that agreement
or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof; provided that
with respect to any agreement or contract listed on any Schedules hereto, all such amendments, modifications or supplements must
also be listed in the appropriate Schedule. References to a statute shall be to such statute, as amended from time to time, and
to the rules and regulations promulgated thereunder. References to any Person include the successors and permitted assigns of that
Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively.

 

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

 

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

 

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

 

6.10         Execution.  This
Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood
that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, or
by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page
were an original thereof.

 

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

 

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

 

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

 

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

 

6.15         Independent
Nature of Purchaser’s 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 the Purchaser
to purchase Preferred Shares pursuant to the Transaction Documents has been made by the Purchaser independently of any other Purchaser
and independently of any information, materials, statements or opinions as to the business, affairs, operations, assets, properties,
liabilities, results of operations, condition (financial or otherwise) or prospects of the Company or any Subsidiary which may
have been made or given by any other Purchaser or by any agent or employee of any other Purchaser, and neither the Purchaser nor
any of its officers, directors, managers, members, partners, investors, agents, employees or investment advisers shall have any
liability to any other Purchaser (or any other Person) relating to or arising from any such information, materials, statements
or opinions.  Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant
hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other
kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents.  The Purchaser acknowledges that no other
Purchaser has acted as agent for the Purchaser in connection with making its investment hereunder and that no other Purchaser will
be acting as agent of the Purchaser in connection with monitoring its investment in the Preferred Shares or Common Stock or enforcing
its rights under the Transaction Documents.  Each Purchaser shall be entitled to independently protect and enforce its
rights, including without limitation the rights arising out of this Agreement or out of the other Transaction Documents, and it
shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose.

 

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6.16         Termination.

 

(a)          This
Agreement may be terminated and the sale and purchase of the Preferred Shares provided for herein abandoned at any time prior to
the Closing by either the Company or the Purchaser upon written notice to the other, as follows:

 

(i)          by
mutual written agreement of the Company and the Purchaser;

 

(ii)         by
the Company or the Purchaser if the Closing has not been consummated on or prior to 5:00 p.m., New York City time, on the Outside
Date; provided, however, that the right to terminate this Agreement under this Section 6.16 shall not be available to any Person
whose breach of this Agreement has been the cause of or resulted in the failure of the Closing to occur on or before such time;

 

(iii)        by
the Company or the Purchaser if any Governmental Entity shall have issued any order, decree or injunction or taken any other action
restraining, enjoining or prohibiting any of the transactions contemplated by this Agreement, and such order, decree, injunction
or other action shall have become final and nonappealable;

 

(iv)        by
the Purchaser, upon written notice to the Company, if there has been a breach of any representation, warranty, covenant or agreement
made by the Company in this Agreement, or any such representation or warranty shall have become untrue after the date hereof, and
either any such breach shall not have been cured within 20 days after the Company receives written notice thereof or as a result
thereof any of the closing conditions set forth in Sections 5.1(a) or 5.1(b) are not reasonably capable of being satisfied prior
to the Outside Date; or

 

(v)         by
the Company, upon written notice to the Purchaser, if there has been a breach of any representation, warranty, covenant or agreement
made by the Purchaser in this Agreement, or any such representation or warranty shall have become untrue after the date hereof,
and either any such breach shall not have been cured within 20 days after the Purchaser receives written notice thereof or as a
result thereof any of the closing conditions set forth in Sections 5.2(a) or 5.2(b) are not reasonably capable of being satisfied
prior to the Outside Date.

 

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(b)          The
Company shall give prompt notice of any such termination by the Purchaser or the Company to each other Purchaser, and, if necessary,
work in good faith to restructure the transaction to allow each Purchaser that does not exercise a termination right to purchase
the full number of Preferred Shares set forth below the Purchaser’s name on the signature page of the Agreement to which
it is a party while remaining in compliance with Section 4.15.

 

(c)          If
this Agreement is terminated as permitted by this Section 6.16, such termination shall be without liability of either party (or
any shareholder, member, partner, investor, director, officer, employee, agent, consultant or representative of such party) to
the other party to this Agreement; provided that nothing in this Section 6.16 shall be deemed to release any party from any liability
for any breach by such party of the terms and provisions of this Agreement or the other Transaction Documents prior to termination.
Upon a termination in accordance with this Section (or of any Other Purchase Agreement in accordance with a corresponding Section),
no Purchaser will have any liability to any other Purchaser under the Transaction Documents as a result therefrom and each other
Purchaser will be a third party beneficiary of this provision. The provisions of Sections 4.11, and of Article VI shall survive
any termination thereof pursuant to this Section 6.16 and shall remain in full force and effect.

 

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

 

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

 

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

 

	 	NEWBRIDGE BANCORP
	 	 
	 	 	 	 
	 	By:	Pressley A. Ridgill
	 	Its:	President and Chief Executive Officer
	 	 	 	 
		PURCHASER
	 	 
	 	 	 	 
	 	By:	 	 
	 	Address:	 	 
	 	 	 	 
	 	 	 	 

 

Aggregate Purchase Price

(Subscription Amount)

 

	[____]	Series B Preferred Shares	$
	[____]	Series C Preferred Shares	 
	 	 	 
	 	Aggregate Purchase Price	$

 

    	63

    	 

    

 

	Name	Exhibit
	 	 
	Articles of Amendment	A
	 	 
	Registration Rights Agreement	B
	 	 
	Common Stock Articles of Amendment	C
	 	 
	Investor Questionnaire	D
	 	 
	Legal Opinion	E
	 	 
	Compliance Certificate	F

 

    	64

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