Document:

EXHIBIT 10.1

 

AMENDMENT TO LOAN AGREEMENT

This amendment
(“Amendment”) dated as of December 19, 2012, is entered into among Lithia Motors, Inc., an Oregon corporation (the
“Company”), each of the Subsidiaries of the Company listed on the signature pages of this Amendment (together with
the Company, each a “Borrower” and any two or more “Borrowers”), the lenders which are from time to time
parties to the Loan Agreement (each a “Lender” and any two or more, “Lenders”); and U.S. Bank National
Association, as Agent for the Lenders (in such capacity, “Agent”).

RECITALS:

A.             
Borrower, certain of its Subsidiaries, the Lenders and Agent have entered into a Loan Agreement
dated as of April 17, 2012 (the “Loan Agreement”).

B.              
Pursuant to Section 6.12 of the Loan Agreement, the Company has requested an increase in the
Aggregate New Vehicle Floorplan Commitment and Aggregate Revolving Loan Commitment. The Company has also requested a decrease in
the Aggregate Used Vehicle Floorplan Commitment.

C.              
The parties have agreed to modify the Commitments as sets forth below.

For valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.               
Definitions. The definitions of the following defined
terms in Section 1.1 of the Loan Agreement are deleted and replaced with the following defined terms:

“Aggregate
New Vehicle Floorplan Commitment” means an amount equal to $575,000,000.00.

“Aggregate
Revolving Loan Commitment” means an amount equal to $145,000,000.00.

“Aggregate Used Vehicle Floorplan
Commitment” means an amount equal to $80,000,000.00.

“Letter
of Credit Commitment” (which is a sublimit of the Revolving Loan Commitment) means an amount equal to $7,000,000.00.

2.               
Increase Option. Section 6.12.1 of the Loan Agreement
is deleted and replaced with the following:

6.12.1
The Company may from time to time request an increase in the Aggregate New Vehicle Floorplan Commitment, Aggregate Used Vehicle
Floorplan Commitment and/or Aggregate Revolving Loan Commitment, in minimum increments of $25,000,000.00 or such lower amount as
is agreed to between the Company and Agent, so long as, after giving effect thereto, (a) the aggregate amount of all such increases
(including any increases prior to the date

 

Page 1 – AMENDMENT TO LOAN AGREEMENT

     

     

    

 

 

of the requested increase) does
not exceed $150,000,000.00, (b) the Aggregate Commitment does not exceed $800,000,000.00, (c) the Aggregate Revolving Loan Commitment
does not exceed $145,000,000.00, and (d) the Aggregate Used Vehicle Floorplan Commitment is not more than 20% of the sum of the
Aggregate New Vehicle Floorplan Commitment plus the Aggregate Used Vehicle Floorplan Commitment.

3.               
Schedule 1. Schedule 1 to the Loan Agreement is deleted
and replaced with the Schedule 1 attached hereto.

4.               
Conditions Precedent. The effectiveness of this Amendment
is subject to satisfaction of each of the following conditions:

4.1.
Agent shall have received executed originals of this Amendment signed by Agent and each Borrower, Guarantor, and Lender, an
Increasing Lender Agreement from each Lender, such promissory notes as any Lender requires, and such other Loan Documents as Agent
requires and each Borrower and Guarantor shall have provided such information and satisfied such conditions as are required by
Agent.

4.2.
All conditions set forth in Section 6.12.3 of the Loan Agreement have been satisfied, including without limitation delivery
to Lender of the certificate required by Section 6.12.3(a)(iv).

4.3.
No Default shall have occurred and be continuing under the Loan Agreement, or will exist after giving effect to the transactions
contemplated hereby and the amendments made by this Amendment.

4.4.
All representations and warranties in the Loan Agreement and in this Amendment shall be true and correct in all material respects
as of the date of this Amendment.

5.               
Defined Terms. Capitalized terms not otherwise defined
herein shall have the meanings given to such terms in the Loan Agreement.

6.               
Reaffirmation; Release. By signing this Amendment
or the attached Acknowledgment:

6.1.Each
Loan Party affirms that the representations and warranties in each of the existing Loan Documents are and will be true, correct
and complete in all material respects as of the date hereof, and agree that (i) except as amended previously or in connection herewith,
each Loan Document is and shall remain valid and enforceable in accordance with its terms and (ii) such Loan Party has no claims,
defenses, setoffs, counterclaims or claims for recoupment against Agent, the Lenders, the other Indemnified Persons or the indebtedness
and obligations represented by the Notes, Guaranties, Collateral Documents and other Loan Documents.

 

6.2.           
Each Loan Party hereby releases, acquits, and forever discharges Agent,
each Lender, their respective parent corporations, affiliates, subsidiaries, successors, 

 

 

Page 2 – AMENDMENT TO LOAN AGREEMENT

     

     

    

 

 

assigns,
officers, directors, employees, agents, attorneys and advisors (collectively, “Indemnified Persons”), and each of them,
of and from any and all liability, claims, demands, damages, actions, causes of action, defenses, counterclaims, setoffs, or claims
for recoupment of whatsoever nature, whether known or unknown, whether in contract or tort or otherwise, arising directly or indirectly
from, or in any way related to the Loan Agreement, this Amendment, the Notes, Collateral Documents and the other Loan Documents,
any other indebtedness or obligations of any Loan Party to Agent or any one or more of the Lenders or to the relationship between
any Loan Party and Agent, any Lender, or the Indemnified Persons.

7.               
References. On and after the effective date of this
Amendment, all references in the Loan Agreement and the other Loan Documents to the Loan Agreement shall be deemed to refer to
the Loan Agreement as amended hereby.

8.               
Representations and Warranties. By signing this Amendment
or the attached Acknowledgment, each Loan Party represents and warrants to Agent and the Lenders as follows:

8.1.Authorization.
(a) It has all requisite power and authority to enter into this Amendment and to carry out the transactions contemplated by,
and perform its obligations under, the Loan Agreement as amended by this Amendment (the “Amended Agreement”), (b) its
execution, delivery and performance of this Amendment and the other Loan Documents to be executed, delivered or performed by it
have been duly authorized by all necessary entity action, do not require the approval of any governmental agency or other Person,
do not contravene any law, regulation, rule, order, or restriction of any Governmental Body binding on it or its articles of incorporation
or other organizational documents, and do not contravene the provisions of or constitute a default under any agreement or instrument
to which it is a party or by which it may be bound or affected, and (c) this Amendment has been duly executed and delivered by
each Loan Party and this Amendment and the Amended Agreement are the legally valid and binding obligations of each Loan Party,
enforceable against such Loan Party in accordance with their respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or similar laws relating to or limiting creditors’ rights generally or by
equitable principles.

8.2.
Absence of Default. No Default or Event of Default has occurred and is continuing or will exist after giving effect to the
transactions contemplated by this Amendment.

9.               
Expenses. Borrowers shall pay all reasonable costs,
fees and expenses (including without limitation, reasonable attorney fees of Agent’s counsel) incurred by Agent in connection
with the preparation, negotiation, execution, and delivery of this Amendment and any other document required to be furnished herewith.

10.           
Recitals. The Recitals are hereby incorporated herein.

 

 

Page 3 – AMENDMENT TO LOAN AGREEMENT

     

     

    

 

 

11.Counterparts.
This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of said
counterparts taken together shall be deemed to constitute but one document.

 

[Signature pages follow]

 

 

 

Page 4 – AMENDMENT TO LOAN AGREEMENT

     

     

    

 

12.Disclosure.
Under Oregon law, most agreements promises and commitments made by lender concerning loans and other credit
extensions which are not for personal, family or household purposes or secured solely by the borrower’s residence must be
in writing, express consideration and be signed by the lender to be enforceable. 

 

 

Lithia Motors, Inc.

 

 

By: /s/ Chris Holzshu

Name: Chris Holzshu

Title: SR VP & CFO

 

By: /s/ John North

Name: John North

Title: VP Fin & Corp Cont

 

LITHIA IMPORTS OF ANCHORAGE,
INC.

LITHIA NA,
INC.

LITHIA OF ANCHORAGE,
INC.

LITHIA OF FAIRBANKS,
INC.

LITHIA OF SOUTH CENTRAL
AK, INC.

LITHIA CIMR, INC.

LITHIA FMF,
INC.

LITHIA FRESNO,
INC.

LITHIA JEF, INC.

LITHIA MMF,
INC.

LITHIA NF, INC.

LITHIA OF
EUREKA, INC.

LITHIA OF SANTA
ROSA, INC.

LITHIA SEA
P, INC.

LITHIA SEASIDE, INC.

LITHIA TR,
INC.

LITHIA ACDM, INC.

LITHIA HDM,
INC.

LITHIA MBDM,
INC.

LITHIA NDM,
INC.

LITHIA OF DES MOINES,
INC.

LITHIA VAUDM,
INC.

LITHIA CCTF, INC.

LITHIA FORD
OF BOISE, INC.

LITHIA OF POCATELLO,
INC.

LITHIA OF TF, INC.

 

Page 5 – AMENDMENT TO LOAN AGREEMENT

     

     

    

 

LITHIA
POCA-HON, INC.

LITHIA
CDH, INC.

LITHIA
HGF, INC.

LITHIA
OF BILLINGS II, LLC

LITHIA
OF BILLINGS, INC.

LITHIA
OF GREAT FALLS, INC.

LITHIA
OF HELENA, INC.

LITHIA
OF MISSOULA, INC.

LITHIA
ND ACQUISITION CORP. #1

LITHIA
ND ACQUISITION CORP. #3

LITHIA
ND ACQUISITION CORP. #4

LITHIA
CJDSF, INC.

LDLC,
LLC

LITHIA
RENO SUB-HYUN, INC.

LITHIA
SALMIR, INC.

HUTCHINS
EUGENE NISSAN, INC.

HUTCHINS
IMPORTED MOTORS, INC.

LGPAC,
INC.

LITHIA
DE, INC.

LITHIA
DM, INC.

LITHIA
KLAMATH, INC.

LITHIA
MEDFORD HON, INC.

LITHIA
MTLM, INC.

LITHIA
OF BEND #1, LLC

LITHIA
OF BEND #2, LLC

LITHIA
OF ROSEBURG, INC.

LITHIA
ROSE-FT, INC.

LITHIA
SOC, INC.

LBMP,
LLC

LFKF,
LLC

LMBP,
LLC

LMBW,
INC.

LITHIA
BRYAN TEXAS, INC,

LITHIA
CJDO, INC.

LITHIA
CJDSA, INC.

LITHIA
CM, INC.

LITHIA
CO, INC.

LITHIA
CSA, INC.

LITHIA
DMID, INC.

LITHIA
HMID, INC.

LITHIA
NSA, INC.

LITHIA
OF ABILENE, INC.

LITHIA
OF CORPUS CHRISTI, INC.

LITHIA
OF MIDLAND, INC.

LITHIA
TA, INC.

LITHIA TO, INC.

 

Page 6 – AMENDMENT TO LOAN AGREEMENT

     

     

    

 

CAMP
AUTOMOTIVE, INC.

LITHIA
DODGE OF TRI-CITIES, INC..

LITHIA
OF BELLINGHAM, LLC

LITHIA
OF SEATTLE, INC.

LITHIA
OF SPOKANE, INC.

LITHIA
OF EUGENE, LLC

LITHIA
OF KILLEEN, LLC

LMBB,
LLC

LITHIA
OF MISSOULA II, LLC

LMOP. LLC

 

 

By: /s/ Chris Holzshu

Name: Chris Holzshu

Title: Authorized Agent

 

By: /s/ John North

Name: John North

Title: Authorized Agent

 

 

U.S. Bank National Association, as

Agent, Lender, Swing Line Lender, and LC Issuer

 

 

By: __________________________________

Name: ________________________________

Title: _________________________________

 

 

 

Page 7 – AMENDMENT TO LOAN AGREEMENT

     

     

    

 

CAMP
AUTOMOTIVE, INC.

LITHIA
DODGE OF TRI-CITIES, INC..

LITHIA
OF BELLINGHAM, LLC

LITHIA
OF SEATTLE, INC.

LITHIA
OF SPOKANE, INC.

LITHIA
OF EUGENE, LLC

LITHIA
OF KILLEEN, LLC

LMBB,
LLC

LITHIA
OF MISSOULA II, LLC

LMOP, LLC

 

 

By: __________________________________

Name: ________________________________

Title: _________________________________

 

 

By: __________________________________

Name: ________________________________

Title: _________________________________

 

 

 

U.S. Bank National Association, as

Agent, Lender, Swing Line Lender, and LC Issuer

 

 

By: /s/U.S. Bank National Association

 

 

 

 

Page 7 – AMENDMENT TO LOAN AGREEMENT

     

     

    

 

 

JPMORGAN CHASE BANK, N.A., as Lender

 

By: /s/ JPMORGAN CHASE BANK, N.A.

 

 

 

Page 8 – AMENDMENT TO LOAN AGREEMENT

     

     

    

 

 

 

MERCEDES-BENZ FINANCIAL SERVICES

USA LLC, as Lender

 

By: /s/ MERCEDES-BENZ FINANCIAL SERVICES USA LLC

 

 

 

 

 

 

Page 9 – AMENDMENT TO LOAN AGREEMENT

     

     

    

 

 

TOYOTA MOTOR CREDIT

CORPORATION, as Lender

 

 

By: /s/ TOYOTA MOTOR CREDIT CORPORATION

 

 

 

Page 10 – AMENDMENT TO LOAN AGREEMENT

     

     

    

 

 

BMW FINANCIAL SERVICES NA, LLC, as

Lender

 

 

 

By: /s/ BMW FINANCIAL SERVICES NA, LLC

 

 

 

 

 

Page 11 – AMENDMENT TO LOAN AGREEMENT

     

     

    

 

 

 

BANK OF AMERICA, NA, as Lender

 

 

By: /s/ BANK OF AMERICA, NA

 

 

 

 

Page 12 – AMENDMENT TO LOAN AGREEMENT

     

     

    

 

 

WELLS FARGO BANK, NA, as Lender

 

 

 

By: /s/ WELLS FARGO BANK, NA

 

 

 

 

Page 13 – AMENDMENT TO LOAN AGREEMENT

     

     

    

 

 

BANK OF THE WEST, as Lender

 

 

 

By:  /s/ BANK OF THE WEST

 

 

 

 

Page 14 – AMENDMENT TO LOAN AGREEMENT

     

     

    

 

 

KEYBANK NATIONAL ASSOCIATION, as

Lender

 

 

 

By: /s/ KEYBANK NATIONAL ASSOCIATION

 

 

 

 

Page 15 – AMENDMENT TO LOAN AGREEMENT

     

     

    

 

NISSAN MOTOR ACCEPTANCE

CORPORATION, as Lender

 

 

 

By: /s/ NISSAN MOTOR ACCEPTANCE CORPORATION

 

 

 

 

Page 16 – AMENDMENT TO LOAN AGREEMENT

     

     

    

 

ACKNOWLEDGMENT AND CONSENT OF GUARANTORS

Each undersigned Guarantor hereby
acknowledges, consents, and agrees to all terms and conditions of the foregoing amendment.

HUTCHINS EUGENE NISSAN, INC.

HUTCHINS IMPORTED MOTORS, INC.

LAD ADVERTISING, INC.

LGPAC, INC.

LITHIA AUTO SERVICES, INC.

LITHIA BNM, INC.

LITHIA DE, INC.

LITHIA DM, INC.

LITHIA FINANCIAL CORPORATION

LITHIA AIRCRAFT, INC.

LITHIA HPI, INC.

LITHIA KLAMATH, INC.

L2 AUTO, INC.

LITHIA MEDFORD HON, INC.

LITHIA MOTORS SUPPORT SERVICES, INC.

LITHIA MTLM, INC.

LITHIA OF ROSEBURG, INC.

LITHIA REAL ESTATE, INC.

LITHIA ROSE-FT, INC.

LITHIA SOC, INC.

LITHIA IMPORTS OF ANCHORAGE, INC.

LITHIA NA, INC.

LITHIA OF ANCHORAGE, INC.

LITHIA OF FAIRBANKS, INC.

LITHIA OF SOUTH CENTRAL AK, INC.

LITHIA CIMR, INC.

LITHIA DC, INC.

LITHIA FMF, INC.

LITHIA JEF, INC.

LITHIA MMF, INC.

LITHIA NF, INC.

LITHIA OF EUREKA, INC.

LITHIA SEASIDE, INC.

LITHIA SEA P, INC.

LITHIA OF SANTA ROSA, INC.

LITHIA TR, INC.

LITHIA CCTF, INC.

LITHIA FORD OF BOISE, INC.

LITHIA OF CALDWELL, INC.

LITHIA OF POCATELLO, INC.

Page 17 – AMENDMENT TO LOAN AGREEMENT

     

     

    

 

LITHIA POCA-HON, INC.

LITHIA OF TF, INC.

LITHIA MBDM, INC.

LITHIA OF DES MOINES, INC.

LITHIA CDH, INC.

LITHIA HGF, INC.

LITHIA OF BILLINGS, INC.

LITHIA OF GREAT FALLS, INC.

LITHIA OF HELENA, INC.

LITHIA OF MISSOULA, INC.

LITHIA CJDSF, INC.

LITHIA RENO SUB-HYUN, INC.

LITHIA SALMIR, INC.

LITHIA ND ACQUISITION CORP. #1

LITHIA ND ACQUISITION CORP.
#3

LITHIA ND ACQUISITION CORP. #4

LITHIA AUTOMOTIVE, INC.

CAMP AUTOMOTIVE, INC.

LITHIA DC OF RENTON, INC.

LITHIA DODGE OF TRI-CITIES, INC.

LITHIA HYR, INC.

LITHIA OF SEATTLE, INC.

LITHIA OF SPOKANE, INC.

LITHIA OF CEDAR RAPIDS #1, INC.

LITHIA OF CEDAR RAPIDS #3,
INC.

LITHIA ACDM, INC.

LITHIA HDM, INC.

LITHIA NDM, INC.

LITHIA VAUDM, INC.

LITHIA BRYAN TEXAS, INC.

LITHIA CJDO, INC.

LITHIA CJDSA, INC.

LITHIA CM, INC.

LITHIA CO, INC.

LITHIA CSA, INC.

LITHIA DMID, INC.

LITHIA HMID, INC.

LITHIA NSA, INC.

LITHIA OF ABILENE, INC.

LITHIA OF CORPUS CHRISTI, INC.

LITHIA OF MIDLAND, INC.

LITHIA TA, INC.

LITHIA TO, INC.

L2 AUTO OF COLORADO, INC.

LITHIA OF TEXAS, INC.

L2 AUTO OF IDAHO, INC.

 

Page 18 – AMENDMENT TO LOAN AGREEMENT

     

     

    

 

 

L2 AUTO OF OREGON, LLC

LITHIA FRESNO, INC.

LITHIA OF BEND #1, LLC

LITHIA OF BEND #2, LLC

LITHIA OF BILLINGS II LLC

LBMP, LLC

LMBP, LLC

LMBW,
INC.

LMBB,
LLC

LFKF, LLC

LITHIA OF BELLINGHAM, LLC

LDLC,
LLC

LITHIA OF EUGENE, LLC

LITHIA OF KILLEEN, LLC

LITHIA OF MISSOULA II, LLC

LMOP,
LLC

SOUTHERN CASCADES FINANCE
CORPORATION

 

 

By: /s/ Chris Holzshu

Name: Chris Holzshu

Title: Authorized Agent

 

By: /s/ John North

Name: John North

Title: Authorized Agent

 

 

Page 19 – AMENDMENT TO LOAN AGREEMENTSECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this
“Agreement”) is dated as of December 21, 2012, by and among First Bancorp, a North Carolina corporation (the
“Company”), and each purchaser identified on the signature pages hereto (each, including its successors and
assigns, a “Purchaser” and collectively, the “Purchasers”).

RECITALS

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

B.     Each Purchaser, severally and not
jointly, wishes to purchase, and the Company wishes to sell to each Purchaser concurrently, upon the terms and conditions stated
in this Agreement, (i) that aggregate number of shares of common stock, no par value per share, of the Company (the “Common
Stock”), and (ii) that aggregate number of shares of the Company’s Series C Convertible Perpetual Preferred
Stock, no par value per share (the “Preferred Stock”), set forth below such Purchaser’s name on the signature
page of this Agreement (which aggregate amount for all Purchasers together shall be 2,656,294 shares of Common Stock and 728,706
shares of Preferred Stock, and such shares of Common Stock and Preferred Stock shall be collectively referred to herein as the
“Shares”). When purchased, the Preferred Stock will have the terms set forth in the articles of amendment for
the Preferred Stock to be issued to the Purchasers in the form attached as Exhibit A hereto (the “Articles of Amendment”)
which is made a part of the Company’s Articles of Incorporation, as amended (the “Articles of Incorporation”),
by the filing of the Articles of Amendment with the North Carolina Secretary of the State (the “Secretary of State”).
The Preferred Stock will be convertible into shares of the Company’s Common Stock subject to and in accordance with the terms
and conditions of the Articles of Amendment. The shares of Common Stock into which the Preferred Stock are convertible are referred
to herein as the “Underlying Shares” and the Underlying Shares and the Shares are referred to herein, collectively,
as the “Securities.”

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

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

    	 

    	 

    

ARTICLE
I

DEFINITIONS

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

“Action” means any
action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition) or investigation
pending or, to the Company’s Knowledge, threatened in writing against the Company, any Subsidiary or any of their respective
properties or any officer, director or employee of the Company or any Subsidiary acting in his or her capacity as an officer, director
or employee before or by any federal, state, county, local or foreign court, arbitrator, governmental or administrative agency,
regulatory authority, stock market, stock exchange or trading facility.

“Affiliate” means,
with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, Controls, is controlled
by or is under common control with such Person.

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

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

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

“Bank” means
First Bank, a North Carolina banking corporation and wholly-owned Subsidiary of the Company.

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

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

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

“Castle Creek” means
Castle Creek Capital Partners IV, L.P. Castle Creek is also a Purchaser as such term is used in this Agreement.

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

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

“Closing Date” means
the date hereof.

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

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

    	1

    	 

    

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

“Company Counsel”
means Robinson, Bradshaw & Hinson, P.A.

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

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

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

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

“DTC” means The Depository
Trust Company.

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

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

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

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

“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.

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

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

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

    	2

    	 

    

“Lien” means any lien,
mortgage, deed of trust, pledge, conditional sale agreement, restriction on transfer, charge, claim, encumbrance, security interest,
right of first refusal, preemptive right or other restriction of any kind.

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

“Loss Share Agreements”
means each of the single family shared-loss agreements and commercial shared-loss agreements entered into by and between the
Bank, on the one hand, and the FDIC, acting both in its receiver and corporate capacities, on the other hand, dated June 19, 2009
and January 21, 2011, respectively, and any such similar agreement entered into with the FDIC pursuant to the purchase of assets
and assumption of liabilities of a failed insured depository institution.

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

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

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

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

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

“NCCOB” means the
North Carolina Commissioner of Banks.

    	3

    	 

    

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

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

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

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

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

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

“Purchase Price” means
$10.00 per Share of Common Stock and $10.00 per Share of Preferred Stock.

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

“Qualifying Ownership Interest”
for purposes of Section 4.13 shall mean 4.9% of the Company’s then outstanding Common Stock (provided that, in making
such calculation, all shares of Common Stock into or for which shares of any securities owned by a Purchaser are directly or indirectly
convertible or exercisable, which, for the avoidance of doubt, shall include those shares of Common Stock issuable upon the conversion
of shares of the Preferred Stock to be issued hereunder shall be included in both the numerator and denominator.

“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(nn).

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

    	4

    	 

    

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

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

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

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

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

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

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

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

“Subsidiary” means
those corporations, banks, savings banks, associations and other entities of which such person owns or controls 25% or more of
the outstanding equity securities either directly or indirectly through an unbroken chain of entities as to each of which 25% or
more of the outstanding equity securities is owned directly or indirectly by its parent or otherwise controlled by such parent
and any entity that would be a “subsidiary” for purposes of the BHC Act; provided, however, that there
shall not be included any such entity to the extent that the equity securities of such entity were acquired in satisfaction of
a debt previously contracted in good faith or are owned or controlled in a bona fide fiduciary capacity.

“Tax” or “Taxes”
means (i) any federal, state, local or foreign income, gross receipts, property, sales, use, license, excise, franchise, employment,
payroll, withholding, alternative or add on minimum, ad valorem, transfer or excise tax, or any other tax, custom, duty, governmental
fee or other like assessment or charge of any kind whatsoever, together with any interest or penalty, imposed by any governmental
authority and (ii) any liability in respect of any items described in clause (i) above payable by reason of contract, assumption,
transferee or successor liability, operation of law, Treasury Regulations Section 1.1502-6(a) (or any predecessor or successor
thereof or analogous or similar provisions of law) or otherwise.

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

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

    	5

    	 

    

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

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

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

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

ARTICLE
II

PURCHASE AND SALE

2.1     Closing.

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

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

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

    	6

    	 

    

2.2     Closing Deliveries.

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

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

(ii)     one or more stock
certificates, free and clear of all restrictive and other legends (except as expressly provided in Section 4.1(b)), evidencing
the Shares subscribed for by each Purchaser hereunder which are deliverable at the Closing, registered in the name of such Purchaser
or as otherwise set forth on such Purchaser’s Stock Certificate Questionnaire included as Exhibit C-2 hereto (the
“Stock Certificates”);

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

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

(v)     a certificate of
the Secretary of the Company, in the form attached hereto as Exhibit E (the “Secretary’s Certificate”),
dated as of the Closing Date, (a) certifying the resolutions adopted by the Board of Directors of the Company (the “Board”)
or a duly authorized committee thereof approving the transactions contemplated by this Agreement and the other Transaction Documents
and the issuance of the Securities, (b) certifying the current versions of the Articles of Incorporation and bylaws, as amended,
of the Company and (c) certifying as to the signatures and authority of persons signing the Transaction Documents and related
documents on behalf of the Company;

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

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

(viii)     a letter agreement
to Castle Creek in form and substance satisfactory to Castle Creek regarding the status of Castle Creek’s investment in the
Shares as a “venture capital investment” for purposes of the U.S. Department of Labor Regulation published at 29 C.F.R.
Section 2510.3–101(d)(3)(i) (the “VCOC Letter Agreement”).

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

    	7

    	 

    

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

(ii)     its Subscription
Amount with respect to such Shares being purchased at the Closing, in U.S. dollars and in immediately available funds, by wire
transfer in accordance with the Company’s written instructions;

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

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

(v)     with respect to
Castle Creek, the VCOC Letter Agreement.

ARTICLE
III

REPRESENTATIONS AND WARRANTIES

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

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

(b)     Organization and Qualification.
The Company and each of its “Significant Subsidiaries” (as defined in Rule 1-02 of Regulation S-X) (“Significant
Subsidiaries”) is an entity duly incorporated or otherwise organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite power and authority to own or
lease and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Significant
Subsidiary is in violation of any of the provisions of its respective articles or certificate of incorporation, bylaws or other
organizational or charter documents. The Company and each of its Subsidiaries is duly qualified to conduct business and is in good
standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may
be, has not had or would not in the reasonable judgment of the Company be expected to have a Material Adverse Effect. The Company
is duly registered as a bank holding company under the Bank Holding Company Act of 1956, as amended (the “BHC Act”).
The Bank is the sole depository institution Subsidiary of the Company and is duly organized and validly existing as a bank chartered
under the laws of the state of North Carolina. The Bank’s deposit accounts are fully insured up to applicable limits by the
FDIC, and all premiums and assessments required to be paid in connection therewith have been paid when due (after giving effect
to any applicable extensions). No proceedings for the revocation or termination of such deposit insurance are pending or, to the
Company’s Knowledge, threatened. The Company and each of its Significant Subsidiaries have conducted their respective businesses
in compliance with all applicable federal, state and foreign laws, orders, judgments, decrees, rules, regulations and applicable
stock exchange requirements, including all laws and regulations restricting activities of bank holding companies and insured depository
institutions, except for any noncompliance that, individually or in the aggregate, has not had and would not be reasonably expected
to have a Material Adverse Effect.

    	8

    	 

    

(c)     Authorization; Enforcement;
Validity. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by each of the Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder and thereunder,
including, without limitation, to issue the Shares in accordance with the terms hereof. The Company’s execution and delivery
of each of the Transaction Documents 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 Shares) have been duly authorized by all necessary corporate
action on the part of the Company, and no further corporate action is required by the Company, its Board or its shareholders in
connection therewith. Each of the Transaction Documents to which it is a party has been (or upon delivery will have been) duly
executed by the Company and is, or when delivered in accordance with the terms hereof, will (assuming due authorization, execution
and delivery thereof by the other parties thereto) constitute the legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except (i) as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general application, (ii) as limited by laws relating to the availability
of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law. There are no shareholder agreements, voting agreements, or similar arrangements with
respect to the Company’s capital stock to which the Company is a party or, to the Company’s Knowledge, between or among
any of the Company’s shareholders.

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

    	9

    	 

    

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

(f)     Issuance of the Shares.
The issuance of the Shares has been duly authorized and the Shares, when issued and paid for in accordance with the terms of the
Transaction Documents, will be duly and validly issued, fully paid and non-assessable and free and clear of all Liens, other than
restrictions on transfer imposed by applicable securities laws, and shall not be subject to preemptive or similar rights. The issuance
of the Underlying Shares has been duly authorized and the Underlying Shares, if and when issued in accordance with the terms of
the 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 imposed by applicable securities laws, and shall not be subject to preemptive or similar rights.
Assuming the accuracy of the representations and warranties of the Purchasers in this Agreement, the Shares will be issued in compliance
with all applicable federal and state securities laws.

(g)     Capitalization.
(1) The authorized capital stock of the Company consists of (i) 40,000,000 shares of common stock, of which 17,015,481 shares
are issued and outstanding as of the date hereof, and (ii) 5,000,000 shares of preferred stock, of which 65,000 shares were designated
as Fixed Rate Cumulative Perpetual Preferred Stock, Series A (“Series A Preferred Stock”), of which no shares
are issued and outstanding as of the date hereof, 63,500 shares were designated as Senior Non-Cumulative Perpetual Preferred Stock,
Series B (“Series B Preferred Stock”), of which 63,500 shares are issued and outstanding as of the date hereof,
and, upon effectiveness of the Articles of Amendment, 728,706 of which will be designated as Preferred Stock. The number of shares
and type of all authorized, issued and outstanding capital stock, options and other securities of the Company (whether or not presently
convertible into or exercisable or exchangeable for shares of capital stock of the Company) has been set forth in the SEC Reports
and has changed since the date of such SEC Reports only due to stock grants or 

    	10

    	 

    
other equity awards or stock option and warrant
exercises that do not, individually or in the aggregate, have a material effect on the issued and outstanding capital stock, options
and other securities. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully
paid and non-assessable, have been issued in compliance in all material respects with all applicable federal and state securities
laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or
purchase any capital stock of the Company. Except as specified in the SEC Reports: (i) no shares of the Company’s outstanding
capital stock are subject to preemptive rights or any other similar rights; (ii) there are no outstanding options or other
equity-based rights, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, or exercisable or exchangeable for, or evidencing the right to subscribe for, purchase or
receive any shares of capital stock of the Company or any Subsidiary, or contracts, commitments, understandings or arrangements
by which the Company or any Subsidiary is or may become bound to issue additional shares of capital stock of the Company or any
Subsidiary or options or other equity-based awards, warrants, scrip, rights to subscribe to, calls, agreements, arrangements or
commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for,
any shares of capital stock of the Company or any Subsidiary; (iii) there are no material outstanding debt securities, notes, credit
agreements, credit facilities or other agreements, arrangements, commitments, documents or instruments evidencing indebtedness
of the Company or any Subsidiary or by which the Company or any Subsidiary is bound; (iv) except for the Registration Rights Agreement,
there are no agreements, commitments, understandings or arrangements under which the Company or any Subsidiary is obligated to
register the sale of any of its securities under the Securities Act; (v) there are no outstanding securities or instruments, agreements,
commitments, understandings or arrangements of the Company or any Subsidiary that contain any redemption or similar provisions,
and there are no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become
bound to sell, transfer, dispose of, repurchase or redeem a security of the Company or any Subsidiary; (vi) neither the Company
nor any Subsidiary has any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or
agreement; and (vii) neither the Company nor any Significant Subsidiary has liabilities or obligations required to be disclosed
in the SEC Reports but not so disclosed in the SEC Reports, which, individually or in the aggregate, will have or would reasonably
be expected to have a Material Adverse Effect. There are no securities or instruments of the Company containing anti-dilution or
similar provisions that will be triggered by the issuance of the Securities. Each option to purchase shares of Common Stock was
granted with an exercise price per share equal to or greater than the per share fair market value (as such term is used in Code
Section 409A and the Department of Treasury regulations and other interpretive guidance issued thereunder) of the Common Stock
underlying such option on the grant date thereof and was otherwise issued in compliance with the requirements of the Code and applicable
laws. Each option to purchase shares of Common Stock that was issued as an “incentive stock option” pursuant to Section
422 of the Code complied at the time of its grant and continues to comply with all of the requirements of the Code and the regulations
thereunder pertaining to “incentive stock options.”

(2)     Immediately following the
Closing, (i) 19,671,775 shares of Common Stock, (ii) no shares of Series A Preferred Stock, (iii) 63,500 shares of Series
B Preferred Stock and (iv) 728,706 shares of Preferred Stock will be outstanding.

    	11

    	 

    

(h)     SEC Reports. The
Company has filed all reports, registrations, certifications, schedules, forms, statements and other documents required to be filed
or furnished by it under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the eighteen (18) months preceding
the date hereof (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the “SEC Reports”), 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. As of the date of this Agreement, there are
no outstanding or unresolved comments in comments letters received from the Commission. To the Company’s Knowledge, as of
the date hereof, none of the SEC Reports is the subject of ongoing Commission review. No Subsidiary is required to file any form,
report, registration, statement or other document with the Commission.

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

(j)     Tax Matters. The
Company and each of its Subsidiaries has (i) timely filed all material foreign, U.S. federal, state and local Tax Returns that
are or were required to be filed, and all such Tax Returns are true, correct and complete in all material respects (ii) paid all
material Taxes required to be paid by it and any other material assessment, fine or penalty levied against it, whether or not shown
or determined to be due on such Tax Returns, other than any such amounts (x) currently payable without penalty or interest, or
(y) being contested in good faith by appropriate proceedings; (iii) is not subject to any outstanding audit, assessment, dispute
or claim concerning any material Tax liability of the Company or any of its Subsidiaries either within the Company’s Knowledge
or claimed, pending or raised by an authority in writing; (iv) is not a party to, bound by or otherwise subject to any obligation
under any Tax sharing or Tax indemnity agreement or similar contract or arrangement; (v) has not participated in a “listed
transaction” within the meaning of Treasury Regulation Section 1.6011- 4(b)(2); (vi) does not have any liability for Taxes
of any Person 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; (vii) has timely withheld, collected or deposited as the
case may be all material Taxes (determined both individually and in the aggregate) required to be withheld, collected or deposited
by it, and to the extent required, have been paid to the relevant taxing authority in accordance with applicable law; and (viii)
have complied with all applicable information reporting requirements in all material respects.

    	12

    	 

    

(k)     Material Changes.
Since the date of the latest audited financial statements included within the SEC Reports, except as disclosed in subsequent SEC
Reports filed prior to the date hereof, (i) there have been no events, circumstances, changes, occurrences or developments
that have had or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect, (ii) the
Company has not incurred any material liabilities (contingent or otherwise) other than (A) trade payables, accrued expenses
and other liabilities incurred in the ordinary course of business consistent with past practice and (B) liabilities not required
to be reflected in the Company’s financial statements pursuant to GAAP or required to be disclosed in filings made with the
Commission, (iii) the Company has not altered materially its method of accounting or the manner in which it keeps its accounting
books and records, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its
shareholders or purchased, redeemed or made any agreement, arrangement, commitment or understanding to purchase or redeem any shares
of its capital stock, (v) the Company has not issued any equity securities to any officer, director or Affiliate, except Common
Stock issued pursuant to existing Company stock option or equity based plans disclosed in the SEC Reports, and (vi) there
has not been any material change or amendment to, or any waiver of any material right by the Company under, any Material Contract
under which the Company or any of its Subsidiaries is bound or subject. Except for the transactions contemplated by this Agreement,
no event, liability or development has occurred or exists with respect to the Company or its Subsidiaries or their respective business,
properties, operations or financial condition that would be required to be disclosed by the Company under applicable securities
laws at the time this representation is made that has not been publicly disclosed at least one Trading Day prior to the date that
this representation is made.

(l)     Environmental Matters.
Neither the Company nor any of its Subsidiaries (i) is in violation of any statute, rule, regulation, decision or order of
any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively,
“Environmental Laws”), (ii) is liable for any off-site disposal or contamination pursuant to any Environmental
Laws, (iii) owns or operates any real property contaminated with any substance that is in violation of any Environmental Laws or
(iv) is subject to any claim relating to any Environmental Laws; in each case, which violation, contamination, liability or
claim has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; and there is
no pending or, to the Company’s Knowledge, threatened investigation that might lead to such a claim. To the Company’s
Knowledge, except as would not result in a Material Adverse Effect, there are no circumstances or conditions (including the presence
of asbestos, underground storage tanks, lead products, polychlorinated biphenyls, prior manufacturing operations, dry-cleaning
or automotive services) involving the Company or any of its Subsidiaries, or any currently or formerly owned or operated property
of the Company or any of its Subsidiaries, that could reasonably be expected to result in any claim, liability, investigation,
cost or restriction against the Company or any of its Subsidiaries, or result in any restriction on the ownership, use, or transfer
of any property pursuant to any Environmental Law, or adversely affect the value of any currently owned property of the Company
or any of its Subsidiaries.

    	13

    	 

    

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

(n)     Employment Matters.
No labor dispute exists or, to the Company’s Knowledge, is imminent with respect to any of the employees of the Company or
any Significant Subsidiary which would have or reasonably be expected to have a Material Adverse Effect. None of the employees
of the Company or any Subsidiary 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, and the Company
and each Subsidiary believes that its relationship with its employees is good. To the Company’s Knowledge, there is no activity
involving any of the employees of the Company or any Subsidiary seeking to certify a collective bargaining unit or similar organization.
To the Company’s Knowledge, no executive officer is, or is now expected to be, in violation of any material term of any employment
contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract
or agreement or any restrictive covenant in favor of a third party, and to the Company’s Knowledge, the continued employment
of each such executive officer does not subject the Company or any Subsidiary to any liability with respect to any of the foregoing
matters. The Company and each of its Significant Subsidiaries are in compliance with all U.S. federal, state, local and foreign
laws and regulations relating to employment and employment practices, immigration, terms and conditions of employment and wages
and hours, except where the failure to be in compliance would not have or reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. As of the date of this Agreement, except as otherwise disclosed to the Purchasers, no material
employee has given notice to the Company or any of its Subsidiaries of his or her intent to terminate his or her employment or
service relationship with the Company or any of its Subsidiaries. The Company and its Subsidiaries are in material compliance with
all laws concerning the classification of employees and independent contractors and have properly classified all such individuals
for purposes of participation in employee benefit plans.

    	14

    	 

    

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

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

(q)     Title to Assets.
The Company and its Subsidiaries have good and marketable title to all real property and tangible personal property owned by them
which is material to the business of the Company and its Subsidiaries, taken as a whole, in each case free and clear of all Liens
except such as do not materially affect the value of such property or do not interfere with the use made and proposed to be made
of such property by the Company and any of its Subsidiaries. Any real property and facilities held under lease by the Company and
any of its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material
and do not interfere with the use made and proposed to be made of such property and facilities by the Company and its Subsidiaries.
No notice of a claim of default by any party to any lease entered into by the Company or any of its Subsidiaries has been delivered
to either the Company or any of its Subsidiaries or is now pending, and there does not exist any event or circumstance that with
notice or passing of time, or both, would constitute a default or excuse performance by any party thereto. None of the owned or
leased premises or properties of the Company or any of its Subsidiaries is subject to any current or potential interests of third
parties or other restrictions or limitations that would impair or be inconsistent in any material respect with the current use
of such property by the Company or any of its Subsidiaries, as the case may be.

    	15

    	 

    

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

(s)     Insurance. The Company
and each of the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in
such amounts as the Company believes to be prudent and customary in the businesses and locations in which and where the Company
and the Subsidiaries are engaged. All premiums due and payable under all such policies and bonds have been timely paid, and the
Company and its Subsidiaries are in material compliance with the terms of such policies and bonds. Neither the Company nor any
of its Subsidiaries has received any notice of cancellation of any such insurance, nor, to the Company’s Knowledge, will
it or any Subsidiary be unable to renew their respective existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse
Effect.

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

(u)     Internal Control Over
Financial Reporting. The Company maintains internal control over financial reporting (as such term is defined in Rule 13a-15(f)
under the Exchange Act) designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with GAAP and such internal control over financial reporting was effective
as of the Company’s most recently filed SEC Report on Form 10-Q. Since the date of the latest audited financial statements
included within the SEC Reports, the Company has not been advised of any material deficiencies in the design or operation of internal
control over financial reporting or any fraud, whether or not material, that involves management. Since the date of the latest
audited financial statements included within the SEC Reports, no material weakness in internal control over financial reporting
has been identified by the Company’s auditors; and since the date of the most recent evaluation thereof, there have been
no significant changes in internal control over financial reporting that could reasonably be expected to materially and adversely
affect internal control over financial reporting.

    	16

    	 

    

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

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

(x)     Private Placement.
Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2

of this Agreement and the accuracy of the information disclosed in the Accredited Investor Questionnaires,
no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers
under the Transaction Documents. The issuance and sale of the Shares hereunder does not contravene the rules and regulations of
the Principal Trading Market.

(y)     Registration Rights.
Other than each of the Purchasers, no Person has any right to cause the Company or any Subsidiary to effect the registration under
the Securities Act of any securities of the Company or any Subsidiary.

(z)     [Intentionally omitted].

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

    	17

    	 

    

(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, and neither the Company nor any Subsidiary sponsors any person that is such an investment company.

(cc)     Unlawful Payments.
None of the Company or any of its Subsidiaries or its directors or officers or, to the Company’s Knowledge, any employees,
agents or other Persons acting at the direction of or on behalf of the Company or any of its Subsidiaries has, in the course of
its actions for, or on behalf of, the Company or any of its Significant Subsidiaries: (a) directly or indirectly, used any corporate
funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to foreign or domestic political activity;
(b) made any direct or indirect unlawful payments to any foreign or domestic governmental officials or employees or to any foreign
or domestic political parties or campaigns from corporate funds; (c) violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended; or (d) made any other unlawful bribe, rebate, payoff, influence payment, kickback or other material
unlawful payment to any foreign or domestic government official or employee.

(dd)     Application of Takeover
Protections; Rights Agreements. The Company has not adopted any shareholder rights plan or similar arrangement relating to
accumulations of beneficial ownership of Common Stock or a change in control of the Company. The Company and its Board have taken
all necessary action, if any, to render inapplicable Article 9 and Article 9A of the North Carolina Business Corporation Act
or any other control share acquisition, business combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s articles of incorporation or other organizational documents
or the laws of North Carolina or otherwise which is or could become applicable to any Purchaser solely as a result of the transactions
contemplated by this Agreement or any other Transaction Document, including, without limitation, the Company’s issuance of
the Securities and any Purchaser’s ownership of the Securities.

(ee)     Disclosure.
The Company confirms that neither it nor, to the Company’s Knowledge, any of its officers or directors nor any other Person
acting on its or their behalf has provided, any Purchaser or its respective agents or counsel with any information that it believes
constitutes or could reasonably be expected to constitute material, non-public information except (i) insofar as the existence,
provisions and terms of the Transaction Documents and the proposed transactions hereunder may constitute such information and
(ii) for any such additional information regarding the status of a proposed sale of nonperforming loans and expectations regarding
related write-downs and foreclosed property write-downs, all of which information in clauses (i) and (ii) will be disclosed by
the Company in the Press Release as contemplated by Section 4.6 hereof. The Company understands and confirms that each of the
Purchasers will rely on the representations in this Section 3.1(ee) in effecting transactions in securities of the Company. No
event or circumstance has occurred or information exists with respect to the Company or any of its Subsidiaries or its or their
business, properties, operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure
or announcement by the Company but which has not been so publicly announced or disclosed, except for the announcement of this
Agreement and related transactions and/or as may otherwise be disclosed in the Press Release issued pursuant to Section 4.6.

    	18

    	 

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

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

(hh)     Absence of Manipulation.
The Company has not, and to the Company’s Knowledge, no one acting on its behalf has, (i) taken, directly or indirectly,
any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of,
any of the securities of the Company or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase
any other securities of the Company.

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

(jj)     Money Laundering Laws.
The operations of each of the Company and any Subsidiary are in compliance in all material respects with the money laundering statutes
of applicable jurisdictions (including, but not limited to, the Bank Secrecy Act of 1970, as amended (the “Bank Secrecy
Act”)), the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered
or enforced by any applicable governmental agency (collectively, the “Money Laundering Laws”) and to the Company’s
Knowledge, no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving
the Company and/or any Subsidiary with respect to the Money Laundering Laws is pending or threatened.

    	19

    	 

    

(kk)     No Additional Agreements.
The Company does not have any agreement, arrangement or understanding with any Purchaser with respect to the transactions contemplated
by the Transaction Documents other than as specified in the Transaction Documents.

(ll)     Reports, Registrations
and Statements. Since January 1, 2009, the Company and each Subsidiary have timely filed all material reports, registrations,
documents, filings, submissions and statements (including, but not limited to, such of the foregoing as may be required under the
Loss Share Agreements), together with any required amendments thereto, that it was required to file with the Federal Reserve, the
NCCOB and the FDIC and any other applicable federal or state securities or banking authorities, except where the failure to file
any such report, registration or statement would not have or reasonably be expected to have a Material Adverse Effect, and any
other applicable federal or state securities or banking authorities. 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 NCCOB
and the FDIC and any other applicable foreign, federal or state securities or banking authorities, as the case may be.

(mm)     Regulatory Capitalization.
As of September 30, 2012, the Bank meets or exceeds the standards necessary to be considered “well capitalized” under
the FDIC’s prompt corrective action regulations.

(nn)     Agreements with Regulatory
Agencies; Compliance with Certain Banking Regulations. Neither the Company nor any Subsidiary is subject to any cease-and-desist
or other similar order or enforcement action issued by, or is a party to any written or other supervisory 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, 2009, has adopted any board resolutions at the request of, any governmental entity that currently
restricts in any material respect the conduct of its business or that in any material manner relates to its capital adequacy, its
liquidity and funding policies and practices, its ability to pay dividends, its credit, risk management or compliance policies,
its internal controls, its management or its operations or business (each item in this sentence, a “Regulatory Agreement”),
nor has the Company or any Subsidiary been advised since December 31, 2009 by any governmental entity that it is considering issuing,
initiating, ordering or requesting any such Regulatory Agreement.

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 of 1977, as amended (“CRA”)
and the regulations promulgated thereunder or to be assigned a CRA rating by federal or state banking regulators of less than “satisfactory”;
(ii) to be operating in violation, in any material respect, of the Bank Secrecy Act, the Patriot Act, any order issued with respect
to anti-money laundering by OFAC, or any other anti-money laundering statute, rule or regulation; or (iii) not to be in satisfactory
compliance, in any material respect, with all applicable privacy of customer information requirements contained in any applicable
federal and state privacy laws and regulations as well as the provisions of all information security programs adopted by the Subsidiary.

    	20

    	 

    

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

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

(pp)     Risk Management Instruments.
Except as has not had or would not reasonably be expected to have a Material Adverse Effect, since January 1, 2011, all material
derivative instruments, including, swaps, caps, floors and option agreements, whether entered into for the Company’s own
account, or for the account of one or more of the Company Subsidiaries, were entered into (1) only in the ordinary course of business,
(2) in accordance with prudent practices and in all material respects with all applicable laws, rules, regulations and regulatory
policies and (3) with counterparties believed to be financially responsible at the time; and each of them constitutes the valid
and legally binding obligation of the Company or one of the Subsidiaries, enforceable in accordance with its terms. Neither the
Company nor the Subsidiaries, nor, to the Company’s Knowledge, any other party thereto, is in breach of any of its material
obligations under any such agreement or arrangement.

(qq)     ERISA. The Company
and each ERISA Affiliate is in compliance in all material respects with all presently applicable provisions of ERISA; no “reportable
event” described in Section 4043 of ERISA (other than an event for which the 30-day notice requirement has been waived by
applicable regulation) has occurred with respect to any Pension Plan for which the Company would have any liability that would
reasonably be expected to have a Material Adverse Effect; the Company has not incurred and does not expect to incur liability under
(i) Title IV of ERISA with respect to termination of, or withdrawal from, any Pension Plan; or (ii) Sections 412 or 4971 of the
Code that would reasonably be expected to have a Material Adverse Effect; and each Pension Plan for which the Company would have
liability that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects and nothing
has occurred, to the Company’s Knowledge, whether by action or by failure to act, which would cause the loss of such qualification.

    	21

    	 

    

(rr)     Reservation of Underlying
Shares. The Company will reserve, free of any preemptive or similar rights of shareholders of the Company, a number of unissued
shares of Common Stock, sufficient to issue and deliver the Underlying Shares into which the Preferred Stock is convertible.

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

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

(uu)     No Additional Agreements.
The Company has no other agreements or understandings (including, without limitation, side letters) with any Purchaser to purchase
Shares on terms that are different from those set forth herein.

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

(ww)     Nonperforming and Classified
Assets. As of the date hereof, to the Company’s Knowledge, the Company believes that the amount of reserves and allowances
for loan and lease losses and other nonperforming assets established on the financial statements included in the SEC Reports is
adequate and such belief is reasonable under all the facts and circumstances to the Company’s Knowledge.

(xx)     Loss Share Agreements.
To the Company’s Knowledge, there have been no breaches of the Loss Share Agreements that would result in a Material Adverse
Effect.

(yy)     Material Contracts.
Each Material Contract is a valid and binding obligation of the Company or any of its Subsidiaries (as applicable) that is a party
thereto and, to the Company’s Knowledge, each other party to such Material Contract, except for such failures to be valid
and binding as, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. Each such
Material Contract is enforceable against the Company or any of its Subsidiaries (as applicable) that is a party thereto and, to
the Company’s Knowledge, each other party to such Material Contract in accordance with its terms (subject in each case to
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights
generally and general equitable principles, regardless of whether such enforceability is considered in a proceeding of law or at
equity), except for such failures to be enforceable as, individually or in the aggregate, would not reasonably be expected to have
a Material Adverse Effect. Neither the Company nor any Subsidiary, or to the Company’s Knowledge, any other party to a Material
Contract, is in material default or material breach of a Material Contract and, to the Company’s Knowledge, there does not
exist any event, condition or omission that would constitute such a default or breach (whether by lapse of time or notice or both),
in each case, except as, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

    	22

    	 

    

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

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

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

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

    	23

    	 

    

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

(e)     Reliance. The Company
will be entitled to rely upon this Agreement and is irrevocably authorized to produce this Agreement or a copy hereof to (A) any
regulatory authority having jurisdiction over the Company and its affiliates and (B) any interested party in any administrative
or legal proceeding or official inquiry with respect to the matters covered hereby, in each case, to the extent required by any
court or governmental authority to which the Company is subject, provided that the Company provides the Purchaser with prior written
notice of such disclosure; provided, however, that the Company may provide to any Person without prior written notice to
any Purchaser the form of this Agreement that is filed with the Commission as an exhibit to the Form 8-K filed pursuant to Section
4.6.

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

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

(h)     Access
to Information. Such Purchaser acknowledges that it has been afforded (i) the opportunity to ask such questions as it
has deemed necessary of, and to receive answers from, management and other representatives of the Company concerning the terms
and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (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 such Purchaser or its representatives or counsel shall modify, amend or affect such Purchaser’s right
to rely on the truth, accuracy and completeness of the Company’s representations and warranties contained in the Transaction
Documents. Such Purchaser has sought such accounting, legal and tax advice as it has considered necessary to make an informed
decision with respect to its acquisition of the Securities. Purchaser acknowledges the Company has not made any representation,
express or implied, with respect to the accuracy, completeness or adequacy of any available information except, with respect to
the Company, as expressly set forth in the SEC Reports or to the extent such information is covered by the representations and
warranties of the Company contained in Section 3.1.

    	24

    	 

    

(i)     Brokers and Finders.
To such Purchaser’s knowledge, no Person will have, as a result of the transactions contemplated by the Transaction Documents,
any valid right, interest or claim against or upon the Company or any Purchaser for any commission, fee or other compensation pursuant
to any agreement, arrangement or understanding entered into by or on behalf of the Purchaser.

(j)     Independent Investment
Decision. Such Purchaser has independently evaluated the merits of its decision to purchase Securities pursuant to the Transaction
Documents, and such Purchaser confirms that it has not relied on the advice of any other Purchaser’s business and/or legal
counsel in making such decision. Such Purchaser understands that nothing in this Agreement or any other materials presented by
or on behalf of the Company to the Purchaser in connection with the purchase of the Securities constitutes legal, regulatory, tax
or investment advice. Such Purchaser has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed
necessary or appropriate in connection with its purchase of the Securities.

(k)     Reliance on Exemptions.
Such Purchaser understands that the Securities 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 the truth and accuracy of,
and such Purchaser’s compliance with, the representations, warranties, agreements, acknowledgements and understandings of
such Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of such Purchaser
to acquire the Securities.

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

(m)     Consents. Assuming
the accuracy of the representations and warranties of the Company and the other parties to the Transaction Documents, other than
passivity and anti-association commitments that may be requested by the Federal Reserve, no approval, consent, exemption, authorization,
or other action by, or notice to, or filing with, any governmental entity or authority or any other person or entity in respect
of any law or regulation is necessary or required, and no lapse of a waiting period under law applicable to such Purchaser is necessary
or required, in each case in connection with the execution, delivery or performance by such Purchaser of this Agreement or the
purchase of the Securities contemplated hereby.

    	25

    	 

    

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

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

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

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

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

    	26

    	 

    

ARTICLE
IV

OTHER AGREEMENTS OF THE PARTIES

4.1     Transfer Restrictions.

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

    	27

    	 

    

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

(d)     Acknowledgement.
Each Purchaser hereunder acknowledges its primary responsibilities under the Securities Act and accordingly will not sell or otherwise
transfer the Securities or any interest therein without complying with the requirements of the Securities Act and the rules and
regulations promulgated thereunder. Except as otherwise provided below, while the Registration Statement remains effective, each
Purchaser hereunder may sell the Securities in accordance with the plan of distribution contained in the Registration Statement
and if it does so it will comply therewith and with the related prospectus delivery requirements unless an exemption therefrom
is available or unless the Securities are sold pursuant to Rule 144. Each Purchaser, severally and not jointly with the other Purchasers,
agrees that if it is notified by the Company in writing at any time that the registration statement registering the resale of the
Securities is not effective or that the prospectus included in such registration statement no longer complies with the requirements
of Section 10 of the Securities Act, the Purchaser will refrain from selling such Securities until such time as the Purchaser
is notified by the Company that such registration statement is effective or such prospectus is compliant with Section 10 of
the Exchange Act, unless such Purchaser is able to, and does, sell such Securities pursuant to an available exemption from the
registration requirements of Section 5 of the Securities Act.

    	28

    	 

    

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

4.3     Furnishing of Information.
In order to enable the Purchasers to sell the Securities under Rule 144 of the Securities Act, until the date that the Purchaser
may sell all of its Securities without restriction or limitation under Rule 144 (including without limitation the requirement to
be in compliance with Rule 144(c)(1)), but not for a period exceeding one year from the Closing, the Company shall maintain the
registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and timely file (or obtain extensions in respect
thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant
to the Exchange Act. During such one year period, if the Company is not required to file reports pursuant to such laws, it will
prepare and furnish to the Purchasers and make publicly available the information described in Rule 144(c)(2), if the provision
of such information will allow resales of the Securities pursuant to Rule 144.

4.4     Form D and Blue Sky.
The Company agrees to timely file a Form D with respect to the Securities 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 Securities for sale to the Purchasers at the Closing pursuant to this Agreement under applicable
securities or “Blue Sky” laws of the states of the United States (or to obtain an exemption from such qualification).
The Company shall make all filings and reports relating to the offer and sale of the Securities required under applicable securities
or “Blue Sky” laws of the states of the United States following the Closing Date.

4.5     No Integration.
The Company shall not, and shall use its commercially reasonable efforts to ensure that no Affiliate of the Company shall, sell,
offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the
Securities Act) that will be integrated with the offer or sale of the Securities in a manner that would require the registration
under the Securities Act of the sale of the Securities to the Purchasers, or that will be integrated with the offer or sale of
the Securities for purposes of the rules and regulations of any Trading Market such that it would require stockholder approval
prior to the closing of such other transaction unless stockholder approval is obtained before the closing of such subsequent transaction.

    	29

    	 

    

4.6     Securities
Laws Disclosure; Publicity. The Company shall, by 9:00 a.m., New York City time, on or before the first (1st) Business Day
immediately following the date of this Agreement, issue one or more press releases (collectively, the “Press Release”)
reasonably acceptable to the Purchasers disclosing all material terms of the transactions contemplated hereby and any other material,
nonpublic information that the Company may have provided any Purchaser at any time prior to the issuance of the Press Release,
including, without limitation, any other material, nonpublic information relating to the status of a proposed sale of nonperforming
loans and expectations regarding related write-downs and foreclosed property write-downs. On or before 5:30 p.m., New York City
time, on the fourth (4th) Business Day immediately following the date of this Agreement, the Company will file a Current Report
on Form 8-K with the Commission describing the terms of the Transaction Documents (and including as exhibits to such Current Report
on Form 8-K the material Transaction Documents (including, without limitation, this Agreement, the Registration Rights Agreement
and the Articles of Amendment)). Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser
or any Affiliate or investment adviser of any Purchaser, or include the name of any Purchaser or any Affiliate or investment adviser
of any Purchaser in any press release or in any filing with the Commission (other than a Registration Statement) or Trading Market,
without the prior written consent of such Purchaser, except (i) as required by the federal securities law in connection with
(A) any registration statement contemplated by the Registration Rights Agreement and (B) the filing of final Transaction
Documents with the Commission and (ii) to the extent such disclosure is required by law, at the request of the staff of the
Commission or under Trading Market regulations, in which case the Company shall provide the Purchasers with prior written notice
of such disclosure permitted under this subclause (ii). From and after the issuance of the Press Release, except for the Castle
Creek Entities (as defined below) pursuant to the rights granted under, and terms of, Section 4.13, no Purchaser shall be in possession
of any material, non-public information received from the Company, any Subsidiary or any of their respective officers, directors
or employees. Each Purchaser, severally and not jointly with other Purchasers, covenants that until such time as the transactions
contemplated by this Agreement are publicly disclosed by the Company as described in this Section 4.6, such Purchaser will maintain
the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this
transaction). Notwithstanding anything to the contrary in this Agreement, if any Purchaser is requested or required by law to
disclose the terms of this transaction, then such information may be disclosed without violation of this Agreement.

4.7     Non-Public Information.
Except pursuant to and in accordance with Section 4.13 hereof, and except with the express written consent of such Purchaser and
unless prior thereto such Purchaser shall have executed a written agreement regarding the confidentiality and use of such information,
the Company shall not, and shall cause each Subsidiary and each of their respective officers, directors, employees and agents,
not to, and each Purchaser shall not directly solicit the Company, any of its Subsidiaries or any of their respective officers,
directors, employees or agents to provide any Purchaser with any material, non-public information regarding the Company or any
of its Subsidiaries from and after the filing of the Press Release.

    	30

    	 

    

4.8     Indemnification.

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

(b)     Conduct
of Indemnification Proceedings. Promptly after receipt by any Indemnified Person of notice of any demand, claim or
circumstances which would or might give rise to a claim or the commencement of any action, proceeding or investigation in respect
of which indemnity may be sought pursuant to Section 4.8(a), such Indemnified Person shall promptly notify the Company in
writing and the Company shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such
Indemnified Person, and shall assume the payment of all fees and expenses; provided, however, that the failure of any Indemnified
Person so to notify the Company shall not relieve the Company of its obligations hereunder except to the extent that the Company
is actually and materially and adversely prejudiced by such failure to notify (as determined by a court of competent jurisdiction,
which determination is not subject to appeal or further review). In any such proceeding, any Indemnified Person shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person
unless: (i) the Company and the Indemnified Person shall have mutually agreed to the retention of such counsel; (ii) the
Company shall have failed promptly to assume the defense of such proceeding and to employ counsel reasonably satisfactory to such
Indemnified Person in such proceeding; or (iii) in the reasonable judgment of counsel to such Indemnified Person, representation
of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them; provided,
that the Indemnifying Party shall not be liable for the fees and expenses of more than one separate firm of attorneys at any
time for all Indemnified Parties. The Company shall not be liable for any settlement of any proceeding effected without its written
consent, which consent shall not be unreasonably withheld, delayed or conditioned. Without the prior written consent of the Indemnified
Person, which shall not be unreasonably withheld, delayed or conditioned, the Company shall not effect any settlement of any pending
or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person
from all liability arising out of such proceeding.

    	31

    	 

    

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

4.10     Use of Proceeds.
The Company intends to use the net proceeds from the sale of the Shares hereunder for general corporate purposes.

4.11     Limitation on Beneficial
Ownership. No Purchaser will be entitled to purchase a number of Shares that would result in such Purchaser, together with
its Affiliates or any other Persons with which it is acting in concert or whose holdings would otherwise be required to be aggregated
with such Purchaser’s holdings for purposes of the BHC Act or the CIBC Act becoming, directly or indirectly (assuming, with
respect only to a Purchaser purchasing shares of Preferred Stock, conversion of the Preferred Stock), the beneficial owner (as
determined under Rule 13d-3 under the Exchange Act) of more than 9.9% of the number of shares of Common Stock issued and outstanding
(based on the number of outstanding shares as of the Closing Date).

4.12     Avoidance of Control.
Notwithstanding anything to the contrary in this Agreement, neither the Company nor any Subsidiary shall take any action (including,
without limitation, any redemption, repurchase, rescission or recapitalization of Common Stock, or securities or rights, options
or warrants to purchase Common Stock, or securities of any type whatsoever that are, or may become, convertible into or exchangeable
into or exercisable for Common Stock in each case, where each Purchaser is not given the right to participate in such redemption,
repurchase, rescission or recapitalization to the extent of such Purchaser’s pro rata proportion), that would cause (a) such
Purchaser’s equity of the Company (together with equity owned by such Purchaser’s Affiliates (as such term is used
under the BHC Act)) to exceed 33.3% of the Company’s total equity (provided that there is no ownership or control in excess
of 9.9% of any class of voting securities of the Company by such Purchaser, together with such Purchaser’s Affiliates) or
(b) such Purchaser’s ownership of any class of voting securities of the Company (together with the ownership by such Purchaser’s
Affiliates (as such term is used under the BHC Act) of voting securities of the Company) to exceed 9.9%, in each case without the
prior written consent of such Purchaser, or to increase to an amount that would constitute “control” under the BHC
Act, the CIBC Act, any applicable provisions of Chapter 53 of the North Carolina General Statutes, or any rules or regulations
promulgated thereunder (or any successor provisions) or otherwise cause such Purchaser to “control” the Company under
and for purposes of the BHC Act, the CIBC Act or any rules or regulations promulgated thereunder (or any successor provisions).
Notwithstanding anything to the contrary in this Agreement, no Purchaser (together with its Affiliates (as such term is used under
the BHC Act)) shall have the ability to purchase more than 33.3% of the Company’s total equity or exercise any voting rights
of any class of securities in excess of 9.9% of the total outstanding voting securities of the Company. In the event either the
Company or a Purchaser breaches its obligations under this Section 4.12 or believes that it is reasonably likely to breach such
an obligation, it shall promptly notify the other parties hereto and shall cooperate in good faith with such parties to modify
ownership or make other arrangements or take any other action, in each case, as is necessary to cure or avoid such breach.

    	32

    	 

    

4.13     Governance Rights.

(a)     Within ten (10) Business
Days subsequent to the receipt of a written request (the “Request”) of Castle Creek to have a Board Representative
(as hereinafter defined) appointed to the Board of Directors in accordance with the terms of this Section 4.13, the Company and
the Bank will request, to the extent required, the non-objection or approval of the Federal Reserve to the appointment of the Board
Representative. The Company further covenants and agrees that within five (5) Business Days of the earlier to occur of (x) the
receipt of the Request, if the approval or non-objection of the Federal Reserve is not required, and (y) the receipt of the non-objection
or approval of the Federal Reserve, the Board of Directors shall cause one (1) person nominated by Castle Creek to be elected or
appointed to the Board of Directors as well as to the board of directors of the Bank (the “Bank Board”), subject
to satisfaction of the legal, bank regulatory and governance requirements regarding service as a director of the Company and to
the reasonable approval of the Nominating and Governance Committee of the Board of Directors (“Governance Committee”)
(such approval not to be unreasonably withheld or delayed). After such appointment or election of a Board Representative, so long
as Castle Creek, together with its Affiliates, has a Qualifying Ownership Interest, the Company will be required to recommend to
its shareholders the election of the Board Representative at the Company’s annual meeting, subject to satisfaction of the
legal and governance requirements regarding service as a director of the Company and to the reasonable approval of the Governance
Committee (such approval not to be unreasonably withheld or delayed). If Castle Creek, together with its Affiliates, no longer
has a Qualifying Ownership Interest, Castle Creek will have no further rights under Sections 4.13(a) through 4.13(c) and, at the
written request of the Board of Directors, shall use all reasonable best efforts to cause its Board Representative to resign from
the Board of Directors and the Bank Board as promptly as possible thereafter. Castle Creek shall promptly inform the Company if
and when it, together with its Affiliates, ceases to hold a Qualifying Ownership Interest in the Company and the Company shall
provide, at its own expense, Castle Creek with all such information as Castle Creek may reasonably request for the calculation
of Castle Creek’s Qualifying Ownership Interest.

(b)     The Board Representative
shall, subject to applicable law, be one of the nominees of the Company and of the Governance Committee to serve on the Board of
Directors. The Company shall use its reasonable best efforts to have the Board Representative elected as a director of the Company
by the shareholders of the Company and the Company shall solicit proxies for the Board Representative to the same extent as it
does for any of its other Company nominees to the Board of Directors. The Company shall ensure, and shall cause the Bank to ensure,
that each committee of the Board of Directors and any equivalent committees of the Bank to which the Board Representative is appointed
shall have at least four (4) members for so long as Castle Creek shall have the right to appoint a Board Representative. Castle
Creek covenants and agrees to hold all such information obtained from its Board Representative in confidence pursuant to the confidentiality
and non-disclosure provisions of Section 4.13(h) below.

    	33

    	 

    

(c)     Subject to Section 4.13(a),
upon the death, resignation, retirement, disqualification, or removal from office as a member of the Board of Directors or the
Bank Board of the Board Representative, Castle Creek shall have the right to designate the replacement for such Board Representative,
which replacement shall satisfy all legal, bank regulatory and governance requirements regarding service as a director of the Company,
and shall be reasonably acceptable to the Company. The Board of Directors and the Bank Board shall use their respective commercially
reasonable efforts to take all action required to fill the vacancy resulting therefrom with such person (including such person,
subject to applicable law, being one of the Company’s and the Governance Committee’s nominees to serve on the Board
of Directors and the Bank Board), using all reasonable best efforts to have such person elected as 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 of Directors, as the case may be.

(d)     The Company hereby agrees
that, from and after the Closing Date, for so long as Castle Creek, together with its Affiliates (but in no event including for
such purpose the Company, the Bank or any other Purchaser), in the aggregate has a Qualifying Ownership Interest, and do not have
a Board Representative currently serving on the Board of Directors and the Bank Board (or have a Board Representative whose appointment
is subject to receipt of regulatory approvals), the Company shall, subject to applicable law, invite a person designated by Castle
Creek and reasonably acceptable to the Board of Directors (the “Observer”) to attend all meetings of the Board
of Directors and the Bank Board (including any meetings of committees thereof which a Board Representative would be permitted to
attend) in a nonvoting, non-participating observer capacity. The Observer shall be entitled to attend such meetings only in the
event Castle Creek does not have a Board Representative on the Board of Directors and the Bank Board. The Observer shall not have
any right to vote on any matter presented to the Board of Directors or the Bank Board or any committee thereof. The Company shall
give the Observer written notice of each meeting of the Board of Directors and the Bank Board at the same time and in the same
manner as the members of the Board of Directors or the Bank Board (as the case may be), shall provide the Observer with all written
materials and other information given to members of the Board of Directors or the Bank Board (as the case may be) at the same time
such materials and information are given to such members and shall permit the Observer to attend as an observer all meetings thereof,
and in the event the Company proposes to take any action by written consent in lieu of a meeting, the Company shall give written
notice thereof to the Observer prior to the effective date of such consent describing the nature and substance of such action and
including the proposed text of such written consents; provided, however, that (1) the Observer may be excluded from executive
sessions comprised solely of independent directors by the chairman of the Board of Directors (or, if applicable, the lead or presiding
independent director) if, on the advice of counsel to the Company, such exclusion is necessary in order for the Company to comply
with applicable law, regulation or stock exchange listing standards (it being understood that it is not expected that the Observer
would be excluded from routine executive sessions), (2) the Company, the Board of Directors, the Bank and the Bank Board shall
have the right to withhold any information and to exclude the Observer from any meeting or portion thereof if doing so is, on the
advice of counsel to the Company, (A) necessary to protect the attorney-client privilege between such party and counsel or (B)
necessary to avoid a violation of fiduciary requirements under applicable law and (3) Castle Creek shall use reasonable best efforts
to cause its Observer to agree to hold in confidence and trust and to act in a fiduciary manner with respect to all information
provided to such Observer. Castle Creek covenants and agrees to hold all such information obtained from its Observer as provided
in the prior sentence in confidence pursuant to the confidentiality and non-disclosure provisions of Section 4.13(h) below. If
Castle Creek and its Affiliates in the aggregate no longer have a Qualifying Ownership Interest, Castle Creek will have no further
rights under this Section 4.13(d).

    	34

    	 

    

(e)     The Board Representative
shall be entitled to compensation, including fees, and indemnification and insurance coverage in connection with his or her role
as a director to the same extent as other directors on the Board of Directors or the Bank Board, as applicable, and the Board Representative
shall be entitled to reimbursement for reasonable documented, out-of-pocket expenses incurred in attending meetings of the Board
of Directors and the Bank Board, or any committee thereof in accordance with Company policy. The Company shall notify the
Board Representative or the Observer, as the case may be, of all regular meetings and special meetings of the Board of Directors
or the Bank Board and of all regular and special meetings of any committee of the Board of Directors and any committee of the Bank
Board. The Company shall provide the Board Representative or the Observer, as the case may be, with copies of all notices, minutes,
consents and other material that it provides to all other members of the Board of Directors or the Bank Board (as applicable) concurrently
as such materials are provided to the other members.

(f)     Each of the Company and
the Bank acknowledges that the Board Representative may have certain rights to indemnification, advancement of expenses and/or
insurance provided by Castle Creek and/or certain of its Affiliates (collectively, the “Castle Creek Indemnitors”).
The Company hereby agrees on behalf of itself and the Bank that with respect to a claim by the Board Representative for indemnification
arising out his or her service as a director of the Company and/or the Bank (1) that it is the indemnitor of first resort (i.e.,
its obligations to the Board Representative with respect to indemnification, advancement of expenses and/or insurance (which obligations
shall be the same as, but in no event greater than, any such obligations to members of the Board of Directors or the Bank Board,
as applicable) are primary and any obligation of the Castle Creek Indemnitors to advance expenses or to provide indemnification
for the same expenses or liabilities incurred by the Board Representative are secondary), and (2) the Castle Creek Indemnitors
shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery
of the Board Representative against the Company. The Company agrees that the Purchaser Indemnitors are express third party beneficiaries
of the terms of this Section 4.13(f).

(g)     For purposes of this Agreement,
“Board Representative” means such person designated by Castle Creek to be elected or appointed to the Board
of Directors and the Bank Board in accordance with all legal, bank regulatory and governance requirements regarding service and
election or appointment as a director of the Company, or any individual designated as a replacement Board Representative pursuant
to Section 4.13(c) hereof. Notwithstanding anything to the contrary herein, in no event shall any failure to meet any applicable
residency requirement be a valid reason for withholding approval of the Board Representative (or any replacement Board Representation)
by the Governance Committee, the Board of Directors, the Bank Board or the Company, as the case may be, under this Section 4.13.

    	35

    	 

    

(h)     In consideration of the
rights granted under this Section 4.13, Castle Creek agrees that it will hold, will cause its respective subsidiaries and their
directors, officers, employees, agents, consultants, advisors and affiliates (collectively, the “Castle Creek Entities”)
to hold, in strict confidence, unless disclosure to a governmental entity is necessary or appropriate in connection with any necessary
regulatory approval, or request for information or similar process, or unless compelled to disclose by judicial or administrative
process or, in the written opinion of its counsel, by other requirement of law or the applicable requirements of any governmental
entity (in which case, Castle Creek shall, to the extent legally permissible and reasonably practicable, provide the Company with
prior written notice of such permitted disclosure, except to the extent such disclosure is in connection with a routine audit by
a governmental authority that does not expressly reference the Company or this Agreement), all nonpublic records, books, contracts,
instruments, computer data and other data and information (collectively, “Information”) concerning the Company
or the Bank furnished to any of the Castle Creek Entities pursuant to this Agreement or in connection with the rights granted hereunder,
(except to the extent that such information can be shown to have been (1) previously known by such party on a nonconfidential basis,
(2) in the public domain through no fault of such party, or (3) later lawfully acquired from other sources by the party to which
it was furnished), and the Castle Creek Entities shall not release or disclose such Information to any other person, except its
auditors, attorneys, financial advisors, other consultants, and advisors with the express understanding that such parties will
maintain the confidentiality of the Information and, to the extent permitted above, to bank regulatory authorities.

(i)     Notwithstanding
any terms of this Agreement to the contrary, including without limitation, Sections 4.6 and 4.7, nothing in this Agreement shall
be construed to prohibit the Company or the Bank from providing material, non-public information to any of the Castle Creek Entities
in satisfaction of its obligations under this Section 4.13, subject to the confidentiality provisions of Section 4.13(h).

4.14     No Change of Control.
The Company shall use reasonable best efforts to obtain all necessary irrevocable waivers, adopt any required amendments and make
all appropriate determinations so that the issuance of the Shares to the Purchasers will not trigger a “change of control”
or other similar provision in any Material Contracts and any employment, “change in control,” severance or other employee
or director compensation agreements or any benefit plan of the Company or any of its Subsidiaries, which results in payments to
the counterparty or the acceleration of vesting of benefits.

4.15     Subscription Rights.

    	36

    	 

    

(a)     Sale of New Securities.
For a period beginning on the Closing Date and ending on the third anniversary of the Closing Date, for so long as the Purchaser,
together with its Affiliates and, for purposes of this Section 4.15, persons who share a common investment advisor with such Purchaser,
owns 2.0% or more of all of the outstanding shares of Common Stock (provided that, in making such calculation, all shares of Common
Stock into or for which shares of any securities owned by a Purchaser are directly or indirectly convertible or exercisable, which,
for the avoidance of doubt, shall include those shares of Common Stock issuable upon the conversion of shares of the Preferred
Stock to be issued hereunder shall be included in both the numerator and denominator), if the Company at any time or from time
to time makes any public or non-public offering of any equity (including Common Stock, preferred stock (other than the Preferred
Stock issued pursuant to this Agreement) and restricted stock), or any securities, options or debt that are convertible or exchangeable
into equity or that include an equity component (such as an “equity kicker”) (including any hybrid security) (any such
security a “New Security”), each Purchaser shall be afforded the opportunity (provided, in the case of an offering
that is not a registered public offering, that such Purchaser satisfied any applicable “accredited investor,” “qualified
institutional buyer” or other investor criteria applicable to such offering) to acquire from the Company for the same price
and on the same terms (except that such Purchaser may elect to receive such securities in non-voting form) as such securities are
proposed to be offered to others, up to the amount of New Securities in the aggregate required to enable it to maintain its proportionate
Common Stock-equivalent interest in the Company; provided that such Purchaser shall not be entitled to acquire securities pursuant
to this Section 4.15 if such acquisition would cause or would result in such Purchaser and its Affiliates, collectively, being
deemed to own, control or have the power to vote, for purposes of the BHC Act or the CIBC Act and any rules and regulations promulgated
thereunder, 10% or more of any class of “voting securities” (as defined in the BHC Act and any rules or regulations
promulgated thereunder) of the Company (it being understood, for the avoidance of doubt, that no security shall be included in
any such percentage calculation to the extent it cannot by its terms be converted into or exercisable for voting securities by
such Purchaser or its Affiliates), or 33.3% of the Company’s total equity, outstanding at such time. Subject to the foregoing
proviso, the amount of New Securities that such Purchaser shall be entitled to purchase in the aggregate shall be determined by
multiplying (x) the total number of such offered shares of New Securities by (y) a fraction, the numerator of which is the
number of shares of Common Stock held by such Purchaser plus the number of shares of Common Stock represented by any convertible
securities held by such Purchaser on an as converted basis, as of such date, and the denominator of which is the number of shares
of Common Stock then outstanding plus the number of shares of Common Stock represented by any convertible securities held by such
Purchaser on an as converted basis, as of such date. Notwithstanding the foregoing, the subscription rights set forth under this
Section 4.15 shall not apply to (1) any offering by the Company pursuant to the granting or exercise of employee stock options
or other equity incentives to employees or directors pursuant to the Company’s stock incentive plans or the issuance of stock
pursuant to any employee stock purchase plan, in each case in the ordinary course of equity compensation awards and to the extent
approved by the Board of Directors, (2) issuances of any securities issued as a result of a stock split, stock dividend, reclassification
or reorganization or similar event, but solely to the extent such issuance is made to all holders of Common Stock, (3) issuances
of shares of Common Stock (including the Underlying Shares) issued upon conversion of, or as a dividend on, the Preferred Stock
and any convertible securities of the Company issued prior to the date hereof and (4) an offering by the Company for consideration
in connection with any bona fide, arm’s length direct or indirect merger or acquisition. For the avoidance of doubt, to the
extent that the Company complies with its obligations pursuant to this Section 4.15 with respect to any securities that are convertible
or exchangeable into (or exercisable for) Common Stock, such Purchaser shall not have an additional right to purchase pursuant
to this Section 4.15 additional securities as a result of the issuance of New Securities upon the conversion, exchange or exercise
of such earlier issued securities (whether or not such Purchaser exercised its right to purchase such earlier issued securities).
A Purchaser may assign the right to exercise the subscription rights set forth in this Section 4.15 to any Affiliate or Person
who shares a common discretionary investment adviser with such 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 4.15.

    	37

    	 

    

(b)     Notice.
In the event the Company proposes to offer New Securities, it shall give each Purchaser written notice (or, if such a written
notice would be required to be filed with the Commission, oral notice) of its intention, describing, to the extent then known,
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) no later than five Business Days, as the case may be, after
the initial filing of a registration statement with the Commission with respect to an underwritten public offering, after the
commencement of marketing with respect to a Rule 144A offering or after the Company commences the marketing of any other offering;
provided that for purposes of this Section 4.15, in addition to providing notice to each Purchaser in accordance with Section
6.3, the Company shall use its commercially reasonable efforts to effect actual notice of the Purchaser as promptly as practicable,
including via telephone and/or electronic mail (provided that the Company shall contact only those persons listed in the “Address
for Notices” section of such Purchaser’s signature page to this Agreement and shall have no obligation to use electronic
mail if such electronic mail would be required to be filed with the Commission). The Company may provide such notice to each Purchaser
on a confidential basis (and the Purchaser shall keep the information conveyed by notice confidential) prior to public disclosure
of such offering. Each Purchaser shall have ten days from the date of receipt of such notice (or, in the case or a “shelf
takedown” from a shelf registration statement, two days from the receipt of such notice) (such ten or two day period, as
applicable, the “Response Period”) to notify the Company in writing whether it will exercise such subscription
rights and as to the amount of New Securities such Purchaser desires to purchase, up to the maximum amount calculated pursuant
to Section 4.15(a). Such notice shall constitute a binding commitment by such 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 and subject to other customary closing
conditions and provided, with respect to a registered offering, that such notice shall not be binding unless and until the Company
can accept a binding commitment under applicable laws and regulations. The failure of a Purchaser to respond within the Response
Period shall be deemed to be a waiver of such Purchaser’s rights under this Section 4.15 only with respect to the offering
described in the applicable notice.

(c)     Purchase Mechanism.
If a Purchaser exercises its subscription rights provided in this Section 4.15, the closing of the purchase of the New Securities
with respect to which such right has been exercised shall take place within 30 days after the giving of notice of such exercise,
which period of time shall be extended for a maximum of 120 days in order to comply with applicable laws and regulations (including
receipt of any applicable regulatory or shareholder approvals), except that in the case of a registered public offering the closing
shall occur in accordance with market convention. Each of the Company and such Purchaser agrees to use its commercially reasonable
efforts to secure any regulatory or shareholder approvals or other consents, and to comply with any law or regulation necessary
in connection with the offer, sale and purchase of such New Securities, including calling a meeting of the Company’s shareholders
to vote on any matters requiring shareholder approval in connection with the offer, sale and purchase of such New Securities (the
“Subscription Proposals”), recommending to the Company’s shareholders that such shareholders vote in favor
of any Subscription Proposals and soliciting proxies for approval of any Subscription Proposals.

    	38

    	 

    

(d)     Failure to Purchase.
In the event a Purchaser fails to exercise its subscription rights provided in this Section 4.15 within the Response Period, or,
if so exercised, such Purchaser is unable to consummate such purchase within the time period specified in Section 4.15(c) above
for any reason, the Company shall thereafter be entitled during the period of 60 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 30 days from the date of said agreement) to sell the New Securities not elected to be purchased pursuant to this
Section 4.15 or which such Purchaser does not or is unable to purchase, at a price and upon terms no more favorable to purchasers
of such securities than were specified in the Company’s notice to such 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 five 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 60-day period (or sold and issued New Securities in accordance with the
foregoing within 30 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 such Purchaser in the manner provided above.

(e)     Non-Cash Consideration.
In the case of the offering of securities for a 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 determined by the Board of Directors; provided, however, that such fair value as determined by
the Board of Directors shall not exceed the aggregate market price of the securities being offered as of the date the Board of
Directors authorizes the offering of such securities.

(f)     Cooperation. The
Company and each participating Purchaser shall cooperate in good faith to facilitate the exercise of such Purchaser’s rights
pursuant to this Section 4.15, including securing any required approvals or consents.

(g)     Exception to Time Periods.
Notwithstanding the foregoing provisions of this Section 4.15, 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 4.15(b) and Section 4.15(c) either (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 4.15 sufficient to satisfy the terms of this Section 4.15 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 4.15
sufficient to satisfy the terms of this Section 4.15.

    	39

    	 

    

4.16     FDIC Final Statement
of Policy on Qualifications for Failed Bank Acquisitions. So long as a Purchaser holds any Securities, the Company will not,
without the consent of such Purchaser, take any action, directly or indirectly, through its subsidiaries or otherwise, that the
Board of Directors of the Company believes in good faith would reasonably be expected to cause such 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.

4.17     NASDAQ Compliance.
The Company will not issue securities in addition to the Securities to the extent that the issuance of such additional securities
would require the Company to obtain approval of the Company’s shareholders for the combined issuance of the Securities and
such other securities in order to comply with Rule 5635 of the NASDAQ Marketplace Rules.

ARTICLE
V

CONDITIONS PRECEDENT TO CLOSING

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

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

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

(c)     No Injunction. No
statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated
by the Transaction Documents.

(d)     Consents.
Other than the Required Approvals contemplated in Sections 3.1(e) (ii), (iv) and (vi), the Company shall have obtained in a
timely fashion any and all consents, permits, approvals, registrations and waivers necessary for consummation of the purchase
and sale of the Shares, all of which shall be and remain so long as necessary in full force and effect.

    	40

    	 

    

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

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

(g)     Articles of Amendment.
The Company shall have filed the Articles of Amendment with the Secretary of State.

(h)     Minimum Gross Proceeds.
The Company shall receive at the Closing aggregate gross proceeds from the sale of Shares of at least $33,850,000, at a price per
share equal to the Purchase Price, and shall simultaneously issue and deliver at the Closing to the Purchasers hereunder an aggregate
number of Shares equal to such gross proceeds divided by the Purchase Price.

(i)     Bank Regulatory Issues.
The purchase of Shares by such Purchaser shall not (i) cause such Purchaser or any of its Affiliates to violate any banking
regulation, (ii) require such Purchaser or any of its affiliates to file a prior notice under the CIBC Act, or otherwise seek prior
approval or non-objection of any banking regulator, (iii) require such Purchaser or any of its Affiliates to become a bank holding
company or otherwise serve as a source of strength for the Company or any Subsidiary or (iv) cause such Purchaser, together with
any other person whose Company securities would be aggregated with such Purchaser’s Company securities for purposes of any
bank 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.

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

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

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

    	41

    	 

    

(c)     No Injunction. No
statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated
by the Transaction Documents.

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

ARTICLE
VI

MISCELLANEOUS

6.1     Fees and Expenses.
The Company shall pay its own fees and the reasonable legal fees and expenses of (i) Greenberg Traurig, LLP, counsel to certain
Purchasers, incurred by such Purchasers in connection with the transactions contemplated by the Transaction Documents, up to a
maximum amount of $50,000 in the aggregate, and (ii) Simpson Thacher & Bartlett LLP, counsel to Castle Creek, incurred by Castle
Creek in connection with the transactions contemplated by the Transaction Documents, up to a maximum amount of $50,000 in the aggregate,
which amounts shall be paid directly by the Company to Greenberg Traurig, LLP and Simpson Thacher & Bartlett LLP, respectively,
at the Closing. Except as set forth above and elsewhere in the Transaction Documents, the parties hereto shall be responsible for
the payment of all expenses incurred by them in connection with the preparation and negotiation of the Transaction Documents and
the consummation of the transactions contemplated hereby. The Company shall pay all Transfer Agent fees, stamp taxes and other
taxes and duties levied in connection with the Company’s sale and issuance of the Securities to the Purchasers.

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

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

    	42

    	 

    

	 	If to the Company:	First Bancorp

341 North Main Street

Troy, North Carolina 27371

Attention: Richard H. Moore, Chief
Executive Officer

Telephone: 910-576-6171

Fax: 910-576-0662

E-Mail: rmoore@firstbancorp.com

	 	With a copy to:	Robinson, Bradshaw & Hinson, P.A.

101 North Tryon Street, Suite 1900

Charlotte, North Carolina 28246

Attention: Henry H. Ralston

Telephone: 704-377-2536

Fax: 704-373-3913

E-Mail: hralston@rbh.com

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

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

6.4     Amendments; Waivers;
No Additional Consideration. No amendment or waiver of any provision of this Agreement will be effective with respect to any
party unless made in writing and signed by a duly authorized representative of such party. No consideration shall be offered or
paid to any Purchaser to amend or consent to a waiver or modification of any provision of any Transaction Document unless the same
consideration is also offered to all Purchasers who then hold Shares.

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

6.6     Successors and Assigns.
The provisions of this Agreement shall inure to the benefit of and be binding upon the parties and their successors and permitted
assigns. This Agreement, or any rights or obligations hereunder, may not be assigned by the Company without the prior written consent
of the Purchasers. Any Purchaser may assign its rights and obligations hereunder in whole or in part to any Person to whom such
Purchaser assigns or transfers any Securities in compliance with the Transaction Documents and applicable law, provided such transferee
shall agree in writing to be bound, with respect to the transferred Securities, by the terms and conditions of this Agreement that
apply to the “Purchasers”; provided, however, that notwithstanding anything in this Agreement to the contrary,
the rights granted to Castle Creek and/or its Affiliates under Section 4.13 of this Agreement may not by assigned without the prior
written consent of the Company.

    	43

    	 

    

6.7     No
Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than,
solely with respect to the provisions of Section 4.8, the Indemnified Persons.

6.8     Governing Law. This
Agreement shall be governed by and construed in accordance with the internal laws of the State of New York applicable to contracts
made and to be performed entirely within such State. Each party agrees that all Proceedings concerning the interpretation, enforcement
and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party
hereto or its respective Affiliates, employees or agents) whether in tort or contract or at law or in equity, may be commenced
on a non-exclusive basis in the New York Courts. Each party hereto hereby irrevocably submits to the non-exclusive jurisdiction
of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any such
New York Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably
waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under
this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

6.9     Survival. Subject
to applicable statute of limitations, the representations, warranties, agreements and covenants contained herein shall survive
the Closing and the delivery of the Shares; provided, that the representations and warranties of the Company and each Purchaser
shall survive the Closing and delivery of the Shares but only for a period of 18 months following 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) and shall thereafter expire and have no further force and effect; provided, that
the representations and warranties set forth in Sections 3.1(a), 3.1(b) (except the last two sentences of such Section 3.1(b),
which shall be subject only to the general survival period of 18 months following the Closing Date as described above), 3.1(c)
(except the third sentence of such Section 3.1(c), which shall be subject only to the general survival period of 18 months following
the Closing Date as described above), 3.1(f), 3.1(g) (except the terms of clause (vii) of such Section 3.1(g), which shall be subject
only to the general survival period of 18 months following the Closing Date above) and 3.1(w) shall survive indefinitely, and the
representations and warranties in Sections 3.1(j), 3.1(l) and 3.1(qq) shall survive until 60 days following the expiration of the
applicable statutory statute of limitations.

    	44

    	 

    

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

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

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

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

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

    	45

    	 

    

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

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

[REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK]

[SIGNATURE PAGE FOR COMPANY FOLLOWS]

    	46

    	 

    

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.

	First Bancorp
	By:_______________________________________
	Name:
	Title:

[REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK]

[SIGNATURE PAGES FOR PURCHASERS FOLLOW]

 

 

[Signature
Page to Securities Purchase Agreement]

    	 

    	 

    

	NAME OF PURCHASER:
	____________________________
	By: _________________________
	Name:
	Title:
	 
	Aggregate Purchase Price (Closing Subscription Amount): $__________
	 
	Aggregate Number of Shares of Common Stock to be Acquired at Closing: __________________
	 
	Aggregate Number of Shares of Preferred Stock to be Acquired at Closing (if applicable): __________
	 
	Tax ID No.: ____________________
	 
	Address for Notice:
	 
	__________________________________
	__________________________________
	__________________________________
	Telephone No.:   ______________________
	Facsimile No.:   _______________________
	E-mail Address:   ______________________
	Attention:  ___________________________

Delivery Instructions:

(if different than above)

c/o _______________________________

Street: ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________

 

[Signature
Page to Securities Purchase Agreement]

    	 

    	 

    

EXHIBITS

	A:	Articles of Amendment

	B:	Form of Registration Rights Agreement

	C-1:	Accredited Investor Questionnaire

	C-2:	Stock Certificate Questionnaire

	D:	Form of Opinion of Company Counsel

	E:	Form of Secretary’s Certificate

	F:	Form of Officer’s Certificate

    	 

    	 

    

EXHIBIT A

Articles of Amendment

 

 

Exhibit A| Page 1

    	 

    	 

    

EXHIBIT B

Form of Registration Rights Agreement

 

 

Exhibit B| Page 1

    	 

    	 

    

EXHIBIT C-1

ACCREDITED INVESTOR QUESTIONNAIRE

(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)

To:     First Bancorp

This Investor Questionnaire (“Questionnaire”)
must be completed by each potential investor in connection with the offer and sale of shares of common stock, no par value per
share (the “Common Stock”) and/or Series C Convertible Perpetual Preferred Stock (the “Preferred Stock,”)
and the underlying shares of Common Stock into which the Preferred Stock is convertible (the “Underlying Shares,”
and collectively with the Common Stock and the Preferred Stock, the “Shares”), of First Bancorp, a North Carolina
corporation (the “Company”). The Shares are being offered and sold by the Company without registration under
the Securities Act of 1933, as amended (the “Securities Act”), and the securities laws of certain states, in
reliance on the exemptions contained in Section 4(2) of the Securities Act and on Regulation D promulgated thereunder and
in reliance on similar exemptions under applicable state laws. The Company must determine that a potential investor meets certain
suitability requirements before offering or selling Shares to such investor. The purpose of this Questionnaire is to assure the
Company that each investor will meet the applicable suitability requirements. The information supplied by you will be used in determining
whether you meet such criteria, and reliance upon the private offering exemptions from registration is based in part on the information
herein supplied.

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

PART A.     BACKGROUND INFORMATION

	Name of Beneficial Owner of the Shares:	 	 
	Business Address:	 	 
	 	(Number and Street)
	 	 	 
	(City)	(State)	(Zip Code)
	Telephone Number: 	(___)

    	Exhibit C-1| Page 1

    	 

    

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

	Type of entity:	 

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

Yes ____     No ____

If an individual:

	Residence Address:	 	 
	 	(Number and Street)
	 	 	 
	(City)	(State)	(Zip Code)
	Telephone Number: 	(___)

 

Age: _____________     Citizenship: ____________     Where
registered to vote:____________ 

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

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

Are you a director or executive officer of the Company?

Yes ____     No ____

Social Security or Taxpayer Identification No.                                                                                                                              

PART B.     ACCREDITED INVESTOR QUESTIONNAIRE

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

	 	__ (1)	A bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity;
	 	 	 
	 	__ (2)	A broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934;
	 	 	 
	 	__ (3)	An insurance company as defined in Section 2(13) of the Securities Act;

    	Exhibit C-1| Page 2

    	 

    
	
	 	 	 
	 	__ (4)	An investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that act;
	 	 	 
	 	__ (5)	A Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958;
	 	 	 
	 	__ (6)	A plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000;
	 	 	 
	 	__ (7)	An employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;
	 	 	 
	 	__ (8)	A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;
	 	 	 
	 	__ (9)	An organization described in Section 501(c)(3) of the Internal Revenue Code, a corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the Shares, with total assets in excess of $5,000,000;
	 	 	 
	 	__ (10)	A trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Shares, whose purchase is directed by a sophisticated person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of investing in the Company;
	 	 	 
	 	___ (11)	A natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of his or her purchase exceeds $1,000,000 (excluding in such calculation the value of your primary residence and the related amount of indebtedness secured by your primary residence up to its fair market value and including in such calculation, if applicable, the related amount of indebtedness secured by your primary residence that exceeds its fair market value and the amount of any increase on the related indebtedness secured by your primary residence incurred within 60 days prior to your purchase of the Company’s securities);
	 	 	 
	 	___ (12)	A natural person who had an individual income in excess of $200,000 in each of the two most recent years, or joint income with that person’s spouse in excess of $300,000, in each of those years, and has a reasonable expectation of reaching the same income level in the current year;

    	Exhibit C-1| Page 3

    	 

    
 

	 	 	 
	 	___ (13)	An executive officer or director of the Company;
	 	 	 
	 	___ (14)	An entity in which all of the equity owners qualify under any of the above subparagraphs. If the undersigned belongs to this investor category only, list the equity owners of the undersigned, and the investor category which each such equity owner satisfies.

    	Exhibit C-1| Page 4

    	 

    

	A.	FOR EXECUTION BY AN INDIVIDUAL:
	 	 
	 	 	 	By	 
	 	Date	 	 	 
	 	 	 	Print Name:	 
	 	 	 	 	 
	B.	FOR EXECUTION BY AN ENTITY:
	 	 
	 	 	 	Entity Name:	 
	 	 	 	 	 
	 	 	 	By	 
	 	 	 	 	 
	 	Date	 	 	 
	 	 	 	Print Name:	 
	 	 	 	Title:	 
	 	 	 	 	 
	C.	ADDITIONAL SIGNATURES (if required by partnership, corporation or trust document):
	 	 
	 	 	 	Entity Name:	 
	 	 	 	 	 
	 	 	 	By	 
	 	 	 	 	 
	 	Date	 	 	 
	 	 	 	Print Name:	 
	 	 	 	 	 
	 	 	 	Title:	 
	 	 	 	 	 
	 	 	 	Entity Name:	 
	 	 	 	 	 
	 	 	 	By	 
	 	Date	 	 	 
	 	 	 	Print Name:	 
	 	 	 	 	 
	 	 	 	Title:	 

 

    	Exhibit C-1| Page 5

    	 

    

Exhibit
C-2

Stock Certificate Questionnaire

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

 

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

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

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

	 	 	 
	 	 	
 

	 	 	 
	 	 	
 

	 	 	 
	 	 	
 

	 	 	 
	 	 	
 

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

 

    	Exhibit C-2| Page 1

    	 

    

EXHIBIT D

Form of Opinion of Company Counsel*

		1.	The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State
of North Carolina. The Bank has been duly incorporated and is validly existing as a corporation in good standing under the laws
of the State of North Carolina.

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

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

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

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

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

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

		8.	The Securities being delivered to the Purchasers pursuant to the Purchase Agreement have been duly and validly authorized and,
when issued, delivered and paid for as contemplated in the Purchase Agreement, will be duly and validly issued, fully paid and
non-assessable and without personal liability to the Company as a result solely due to the ownership thereof by the Purchasers,
and free of any preemptive right or similar rights contained in the Company’s Articles of Incorporation, as amended, or Amended
and Restated By-laws.

    	Exhibit D| Page 1

    	 

    
	

		9.	Neither the Company nor any of its Subsidiaries is an “investment company” under the Investment Company Act of
1940, as amended.

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

 

 

    	Exhibit D| Page 2

    	 

    

EXHIBIT E

Form of Secretary’s Certificate

The undersigned hereby certifies that
he is the duly elected, qualified and acting Secretary of First Bancorp, a North Carolina corporation (the “Company”),
and that as such he is authorized to execute and deliver this certificate in the name and on behalf of the Company and in connection
with the Securities Purchase Agreement, dated as of December 21, 2012, by and among the Company and the investors party thereto
(the “Purchase Agreement”), and further certifies in his official capacity, in the name and on behalf of the
Company, the items set forth below. Capitalized terms used but not otherwise defined herein shall have the meaning set forth in
the Purchase Agreement.

		1.	Attached hereto as Exhibit A is a true, correct and complete copy of the resolutions duly adopted by the Board of Directors
of the Company at a meeting held on _____, 2012, which represent all of the resolutions approving the transactions contemplated
by the Purchase Agreement and the issuance of the Securities. Such resolutions have not in any way been amended, modified, revoked
or rescinded, have been in full force and effect since their adoption to and including the date hereof and are now in full force
and effect.

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

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

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

 

	Name	Position	
        Signature

         

	 	 	_______________________
	 	 	_______________________

 

    	Exhibit E| Page 1

    	 

    

IN WITNESS WHEREOF, the undersigned has
hereunto set his hand as of this 21st day of December, 2012.

                                                                           
              

[_____________]

Secretary

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

                                                                                         

[_____________]

Chief [______] Officer

    	Exhibit E| Page 2

    	 

    

EXHIBIT F

Form of Officer’s Certificate

The undersigned, the Chief _____ Officer
of First Bancorp, a North Carolina corporation (the “Company”), pursuant to Section 2.2(a)(vi) of the Securities
Purchase Agreement, dated as of December 21, 2012, by and among the Company and the investors signatory thereto (the “Securities
Purchase Agreement”), hereby represents, warrants and certifies as follows (capitalized terms used but not otherwise
defined herein shall have the meaning set forth in the Securities Purchase Agreement):

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

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

IN WITNESS WHEREOF, the undersigned
has executed this certificate this 21st day of December, 2012.

                                                                                         

[___________]

[___________]

                                                                                         

[___________]

[___________]

 

 

 

    	Exhibit F| Page 1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00211-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00211-of-00352.parquet"}]]