Document:

Exhibit 10.1

                          INTEREST PURCHASE AGREEMENT

     THIS  INTEREST  PURCHASE AGREEMENT ("Agreement") is entered into as of this
13th  day of December, 2006, by and between Siberian Energy Group Inc., a Nevada
corporation  ("Buyer",  "SEG")  and  Key  Brokerage  LLC.,  a  Delaware  limited
liability  company  ("Seller").

                                  WITNESSETH:

     A.   Seller  is  the  sole owner of Kondaneftegaz LLC ("Kondaneftegaz")(the
"Company"),  registration  number   -  1048600002901,     8601022853,  which  is
located  in  the Khanty-Mansiysk autonomos district of western Siberia and which
was  created  in  2004 for the purpose of oil and gas exploration in the region.
Kondaneftegaz  applied  for exploration and production license on Krasnoleninski
parcel  in  the  Khanty-Mansiysk  district, which will be auctioned in the first
half  of  2007.  In  addition,  Kondaneftegaz  has  applied  for  9  parcels  in
Karabashskaia  area  of  Khanty-Mansiysk  district.

     B.   Pursuant  to  the  Option  agreement  dated  September  14,  2006  and
following  the  due diligence review by the Buyer, the Buyer desires to buy from
Seller  a 100% interest in Kondaneftegaz ("Interest") and Seller desires to sell
the  Interest  to Buyer according to the terms and subject to the conditions set
forth  in  this  Agreement.

                                     AGREEMENT
                                -------------------

     In consideration of the foregoing and the mutual promises contained herein,
the  parties  agree  as  follows:

     1.   PURCHASE  AND  SALE  OF  INTEREST.  Upon  the terms and subject to the
conditions  set forth in this Agreement, Seller hereby sells, assigns, transfers
and  conveys  the  Interest  to  Buyer,  and Buyer hereby purchases, obtains and
acquires  the  Interest  from  Seller.  Simultaneously  with the transfer of the
Interest,  the  Seller  is  transferring  the  geological information package on
Karabashki  zone  of  Khanty-Mansiysk  Autonomous  district  (Tuymen  region  of
Russian  Federation)  ("Geological  Data")  into  the  ownership  of  the Buyer.
Geological  data  to  be  transferred is listed in Appendix 1 to this Agreement.
Price  of Geological data is included in the total purchase price as per item 2.

     2.   PURCHASE  PRICE.  In  consideration  of  and in exchange for the sale,
assignment,  transfer and conveyance of the Interest and of the Geological Data,
Buyer  agrees  to issue to Seller, 1,900,000 (One million nine hundred thousand)
shares  of the common stock of Siberian Energy Group Inc., a Nevada corporation,
(the  "Stock").  On  the  Closing  Date  the  Stock shall be delivered to Seller
through  certificates,  properly  endorsed for transfer to the Seller (or as the
Seller  may  direct).

The  Stock  shall  be  non-registered  and subject to restrictions. "Restricted"
securities  have  the  meaning  as  that  term  is  defined  in  Rule 144 of the
Securities  Act  of  1933  and  may  not  be offered for sale, sold or otherwise
transferred  except  pursuant  to  a registration statement or a valid exemption
from  registration.

<PAGE>

     3.  CONDITIONS  AND  CLOSING

          (a)  Seller  shall  procure  that the Buyer acquires good title to the
Company's  Interests,  free  from  any  Encumbrance;

          (b)  Closing  shall  take  place  in  New  York,  NY ten Business Days
following  the  date  of this Agreement, or at such other place or on such other
date  as may be agreed between the Seller and the Buyer (the "Closing Date"). At
the Closing, Buyer shall deliver to Seller certificates evidencing the number of
shares  of  Stock  specified  in  Sections 2 hereof, and Seller shall deliver to
Buyer  an  assignment  of  the  Interest,  in  the  form  attached as Exhibit A.

           (d)  The  Seller  is  responsible  to  make the appropriate change of
ownership in the registration documents of the Company and certify the change in
the  government  registration  body  of  Russian Federation within 10 days after
closing.

     4.   ASSIGNMENT  OF THE INTEREST. From and after the Closing, all equitable
and  legal  rights,  title  and interests in and to the Interest shall be owned,
held  and  exercised  by  Buyer.

     5.   ASSIGNMENTS  OF  THE  STOCK. From and after the Closing, all equitable
and  legal rights, title and interests in and to the Stock shall be owned,  held
and  exercised  by  the  Seller.  Siberian  Energy  Group  Inc.  shall,  issue
certificates  to  the  Seller  (or  as the Seller  may direct) for the number of
shares  of  Stock  as  specified  in  Section  2  above.

     6.   INVESTMENT  REPRESENTATIONS  OF  BUYER.  Buyer  hereby  represents and
warrants  to  the  Seller  as  follows:

          (a)  Buyer understands that the Interest in Kondaneftegaz has not been
registered  under the Securities Act of 1933 (the "1933 Act") or the laws of any
state, and the transactions contemplated hereby are being undertaken in reliance
upon  an  exemption  from  the  registration  requirements  of the 1933 Act, and
reliance  upon  such exemption is based upon Buyer's representations, warranties
and  agreements  contained  in  this  Agreement.

          (b)  Buyer  has  received  and  carefully  reviewed  all  information
necessary  to  enable Buyer to evaluate its investment in the Company. Buyer has
been  given  the opportunity to ask questions of and to receive answers from the
Company  concerning its business and the Interest, and to obtain such additional
written  information  necessary  to  verify  the  accuracy  thereof.

          (c)  Buyer  is  aware that the purchase of the Interest is speculative
and  involves  a high degree of risk. Buyer is aware that  there is no guarantee
that  Buyer  will  realize  any gain from his acquisition of the Interest. Buyer
further  understands  that Buyer could lose the entire amount of its investment.

          (d)  Buyer  understands  that  no  federal  or  state  agency or other
authority  has  made  any finding or determination regarding the fairness of the
offer,  sale  and/or  issuance of the Interest or has made any recommendation or
endorsement  thereof  or  has  passed  in  any  way  upon  this  Agreement.

<PAGE>

          (e)  Buyer:  (i)  is  acquiring  the  Interest  solely for Buyer's own
account  for  investment  purposes  only  and  not  with a view toward resale or
distribution  thereof,  in  whole  or  in  part, (ii) has no tract, undertaking,
agreement  or  arrangement,  in  existence  or  contemplated,  to  sell, pledge,
assign  or otherwise transfer the Interest to any other person, and (iii) agrees
not  to  sell  or  otherwise  transfer  the  Interest  unless  and  until  it is
subsequently  registered  under the 1933 Act and any applicable state securities
laws,  or  unless  an  exemption  from  any  such  requirement  is  available.

          (f)  Buyer  is  financially  able  to  bear  the  economic  risk of an
investment  in  the  Interest,  including  the  ability  to  hold  the  Interest
indefinitely  and  to  afford a complete loss of its investment in the Interest.
Buyer  has such knowledge and experience in financial and business matters as to
be  capable  of  evaluating  the  merits  and  risks  of  the acquisition of the
Interest.

     7.   INVESTMENT  REPRESENTATIONS  OF  SELLERS. The Seller hereby represents
and  warrants  to  Buyer  as  follows:

          (a)     Seller  has  received  and  carefully reviewed all information
necessary  to  enable Seller to evaluate the investment represented by the Stock
in  Siberian  Energy  Group  Inc.  Seller  has been given the opportunity to ask
questions  of  and to receive answers from Siberian Energy Group Inc. concerning
its  business  and  the Stock, and to obtain such additional written information
necessary  to  verify  the  accuracy  thereof.

          (b)     Seller  is  aware that the Stock is speculative and involves a
high degree of risk. Seller is aware that there is no guarantee that Seller will
realize any gain from ownership of the Stock. Seller further understands that it
could  lose  the  entire  amount  of  its  investment.

          (c)     Seller is financially able to bear  the  economic  risk  of an
investment  in  the  Stock, including the ability to hold the Stock indefinitely
and  to  afford  a  complete  loss  of  its  investment in the Stock. Seller has
knowledge  and  experience in financial and business matters as to be capable of
evaluating  the  merits  and  risk  of  the  acquisition  of  the  Stock.

          (d)     The Seller was not furnished any offering literature or
                  memorandum;

          (e)     The  Seller  recognizes that the Stock has not been registered
under the  Securities  Act of 1933, as amended ("Act"), nor under the securities
laws of any  state   and,  therefore,  cannot  be  resold  unless  resale of the
Stock is registered  under the Act or unless  an  exemption from registration is
available;  no   public agency  has passed upon the fairness of the terms of the
offering;  the  undersigned   may  not sell  the Shares without registering them
under  the  Act  and  any   applicable  state  securities laws unless exemptions
from  such  registration  requirements  are  available with  respect to any such
sale;

          (f)     The undersigned is  acquiring  the  Stock for its own account
for long-term investment and not with a view toward resale, fractionalization or
division,  or distribution thereof, and it does not presently have any reason to
anticipate  any  change  in  its  circumstances,  financial  or  otherwise,  or
particular  occasion  or  event  which  would necessitate or require its sale or
distribution  of  the  Stock.  No  one  other than the Seller has any beneficial
interest  in  said  Stock;

          (g)     The Seller acknowledges that it is  an  Accredited Investor as
defined  in  Section  501  of  Regulation D under the Securities Act of 1933, as
amended,  as  adopted  by  the  Securities  and  Exchange  Commission.

<PAGE>

     8.   CONDITIONS  TO  OBLIGATIONS  OF  BUYER.  The  obligation  of  Buyer to
consummate  the  transactions  contemplated  by this Agreement is subject to the
fulfillment  of  each  of  the  following  conditions:

          (a)  On  the  Closing  Date,  Seller  shall  be  the  sole  legal  and
beneficial  owner  of  the  Interest,  free  and  clear  of  all  claims, liens,
mortgages,  charges, security interests, encumbrances and other restrictions and
limitations  of  any  kind  and  nature  whatsoever.

          (b)  By  the  Closing  Date,  any  and  all  necessary  consents,
authorizations, orders or approvals for transfer of the Interest shall have been
obtained.

          (c)  Neither  the  execution  or  delivery  of  this Agreement nor the
performance  of  its  obligations  hereunder  will  conflict with or result in a
breach  of  or  constitute  a  default  under or result in the creation of or an
imposition  of  a  lien  upon  any  of the properties or assets of Seller or any
agreement too which Seller may be a party or by which its property or assets may
be  subject.

     9.   CONDITIONS  TO  OBLIGATIONS  OF  SELLER.  The  obligation of Seller to
consummate  the  transactions  contemplated  by this Agreement is subject to the
fulfillment  of  each  of  the  following  conditions:

          (a)  On the Closing Date, Buyer shall be the sole legal and beneficial
owner  of  the  Stock,  free  and  clear of all claims, liens, charges, security
interest,  encumbrances  and  other  restrictions and limitations of any kind or
nature  whatsoever.

          (b)  On  the  Closing  Date,  any  and  all  necessary  consents,
authorizations,  orders  or  approvals for transfer of the Stock shall have been
obtained.

          (c)  Neither  the  execution  or  delivery  of  this Agreement nor the
performance of its obligation hereunder will conflict with or result in a breach
of  or  constitute a default under or result in the creation of or an imposition
of  a  lien  upon  any  of the properties or assets of Buyer or any agreement to
which  Buyer  may  be a party or by which its property or assets may be subject.

         10.  MISCELLANEOUS.

          (a)  This  Agreement  represents  the  entire  agreement  between  the
parties  hereto  with  respect  to  the  transactions  contemplated  hereby  and
supersedes  all  prior agreements with respect thereto, whether written or oral.

          (b)  This  Agreement  shall be governed by and construed in accordance
with  the  laws  of  the  State  of  New  York, without regard, however, to such
jurisdiction's  principles  of  conflict  of  laws.

          (c)  This  Agreement may be executed in counterpart originals, each of
which  shall  be  an  original,  but  all  of  which  shall  constitute only one
Agreement. A facsimile signature of any party will be binding on that party, and
any  facsimile  communication  shall  be  immediately  followed  by  a hard copy
containing  such  signature.

     [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK.  SIGNATURE PAGE FOLLOWS.]

<PAGE>

IN  WITNESS  WHEREOF,  the  parties  hereto have executed this Interest Purchase
Agreement  as  of  the  day  and  year  first  written  above.

                BUYER

                SIBERIAN  ENERGY  GROUP  INC.,
                a  Nevada  corporation
                address:  275  Madison  Ave,  6th Floor,
                New  York,  NY  10016

                By:/s/ David Zaikin
                   ---------------------------------------------
                   David  Zaikin,  CEO and Chairman of the Board

                SELLER:

                KEY  BROKERAGE  LLC.,
                a  Delaware  limited  liability  company
                address:  1201-762  Orange  Street, Wilmington,
                New  Castle  district,  Delaware

                By:/s/ Vladimr Kvitko
                   -------------------------------
                   Vladimr  Kvitko,  President

<PAGE>

                                     EXHIBIT  A

                         ASSIGNMENT  OF  MEMBERSHIP  INTEREST

     FOR VALUE RECEIVED, Key Brokerage LLC, a Delaware limited liability company
("Assignor"),  herewith sells, assigns, transfers and conveys to Siberian Energy
Group  Inc.  a Nevada corporation ("Assignee"), the Assignor's rights, title and
interests  as  member  of  and in Kondaneftegaz LLC, a Russian limited liability
company (the "Company"), which shall comprise one hundred percent (100%) capital
and profits interest in the Company, including 100% share in the charter capital
in  amount of 10,000 Russian rubles, 100% share of net assets and profits of the
Company,  distributions  and  liquidation  rights  in the Company and voting and
management  rights  and  powers  in  the  Company  in proportion to the assigned
interest  in  the  Company.

     This  Assignment of Interest in the Company is made, delivered and shall be
effective  on the date hereof in accordance with and in complete satisfaction of
the  requirements  of  the  Charter  of  Kondaneftegaz  LLC  of  26 April, 2005.

     IN  WITNESS  WHEREOF,  Assignor has executed this Assignment by and through
its  members  this  ___  day  of  December,  2006.

                 KEY  BROKERAGE  LLC.,
                 a  Delaware  limited  liability  company
                 address:  1201-762  Orange  Street, Wilmington,
                 New  Castle  district,  Delaware

                By:
                   -------------------------------
                   Vladimir  Kvitko,  President

<PAGE>

                                                                      APPENDIX 1

                                              To the Interest Purchase Agreement

List of Geological information on Karabashki zone of Khanty-Mansi Autonomous
area (Tuymen region of Russian Federation).

No.    Item
---    ----
1.     Description  of  11  deposits  and areas adjacent to the license areas of
       Karabashskaya  zone.

2.     Well  logs  (1:500  scale)  over  11  deposits  (11  wells).

3.     Stratigraphic  division  with  identification  of  stages,  formations,
       subformations,  members  (approximately  350  wells).

4.     Oil  analyses  (approximately  50  analyses).

5.     Gas  analyses  (approximately  50  analyses).

6.     Characteristics  of  pay zone parameters of deposits (7 pages of computer
       typed  text).

7.     Distribution  of  hydrocarbon  accumulations,  oil  and gas plays over 11
       deposits  (areas)  (table,  2  pages).

8.     Time  seismic  sections  of  the  deposits.

9.     Fragments of regional seismic lines in the region of the license areas (4
       fragments).

10.    Structural  maps  of  the deposits along the seismic horizon B (Bazhenov
       formation)  (11  maps).

11.    General  map  of the region of the license area location (1 map, 1:1 000
       000  scale).

12.    The  State  Committee of the RSFSR on Geology and Subsoil Utilization
       'Ural Regional  Geological Committee 'Uralgeologia'. Bazhenov Geophysical
       Expedition.  "Report  on  Results of Geodetic Surveys, Carried out by
       Severouralskaya Crew  along  the  Regional  Lines  P-14  and Kotliyskiy
       in Tyumen and Sverdlovsk Regions  in  1990-1992". Scale 1:200 000,
       P-41-VII, VIII, XIX, XXV in four books and  2  folders,  settlement
       Sheelit,  1992.

13.    Bliznetsov  M.T.,  Zerchaninova  L.A. and others.  "Report  on Results of
       Regional  Seismic  Surveys  along  Lines  3,  5,  99,  100  in Kondinskiy
       Administrative  Region   of   the Khanty-Mansi  Autonomous  Area  of  the
       Tyumen  region  in  1998-2000",  enclosed:   193  pages,  62  figures, 11
       tables,  31  pages  of  graphical  enclosure,  bibliography   40   pages.
       Bazhenov   Geophysical   expedition,   P-41-XXXIV",  P-41-XXXV,  0-41-IV,
       0-41-V.

14.    The  Khanty-Mansi  Autonomous  Area,  the  Tyumen  region,  Bazhenov
       Geophysical  Expedition  "Report  on  Results of Regional Seismic Surveys
       along Lines 5, 99a, 101 (South of Shaimskaya Zone) in Kondinskiy
       Administrative Region of the Khanty-Mansi Autonomous Area of the Tyumen
       Region in 2000-2001" Uralskaya crew  No.12  (1  book,  1  folder)
       Zarechny,  2001.

15.    Bazhenov  Geophysical  Expedition "Brief Informational Geological Report
       on  Main  Results and Volumes of Works, Carried out during 9 Months of
       2006 over the  Object 'Seismic Surveys along Fragments of Regional
       Seismic Lines No.98 and No.11  in  Trans-Ural  Part  of  West-Siberian
       Oil-and-gas  Province".

<PAGE>Exhibit 10.1

FOUR OAKS FINCORP, INC.

SECOND AMENDED AND RESTATED

DIVIDEND REINVESTMENT AND

STOCK PURCHASE PLAN

1.

PURPOSE

The purpose of the Plan is to provide the shareholders of record of the Company’s Common Stock with a simple and convenient method of investing cash dividends and optional cash payment in shares of Common Stock. To the extent that new shares of Common Stock will be purchased from the Company, the Company will receive additional funds to finance the continuing operations of the Company.

2.

FEATURES

Participants in the Plan:

·

Will have cash dividends on their shares of Common Stock automatically reinvested in additional shares of Common Stock;

·

May elect to make optional cash payments from $20.00 to $1,000.00 per quarter for additional Common Stock purchases;

·

Will receive full investment use of funds because the Plan provides for crediting of fractional shares (calculated to four decimal places) and reinvestment in additional shares;

·

Will pay no accountant fees for the reinvestment of dividends or optional cash payments;

·

Will receive quarterly statements from the Agent reflecting total dividends and optional cash payments, the price paid for shares purchased, and the total shares held in the participant’s account; and

·

Will enjoy safekeeping of shares purchased pursuant to the Plan, including protection against loss, theft, or inadvertent destruction of certificates.

3.

ADMINISTRATION

Registrar and Transfer Company will administer the Plan and serve as agent (the “Agent”) for Plan participants. The Agent keeps records, sends statements of account to each participant, and performs other duties related to the Plan.  Shares purchased under the Plan are registered in the name of the Agent or in the name of its nominee, and credited to the accounts of the participants in the Plan. Questions and communications regarding the Plan should include your account number and should be directed to:

Registrar and Transfer Company

10 Commerce Drive, Cranford, New Jersey  07016

Telephone:  1-800-368-5948; 1-908-497-2300

4.

PARTICIPATION

A.

ELIGIBILITY

Any holder of record of the Company’s Common Stock is eligible to participate in the Plan at any time. Beneficial owners of shares of Common Stock whose shares are registered in names other than their own (for example, in the name of a broker, bank, or other nominee) and who wish to participate in the Plan must become owners of record by having the number of shares they wish to enroll in the Plan transferred into their names. Tentatively, they must make arrangements for the nominees or other holders of record to participate in the Plan on behalf of such beneficial owners.

B.

ENROLLMENT IN THE PLAN

An eligible shareholder may join the Plan at any time by completing an Authorization Card and returning it to the Agent at the above address. Authorization Cards may be obtained at any time by contacting the Agent.

For new enrollees, participation will commence with the next dividend payable after receipt of authorization provided it is received by the Agent by the fifth business day prior to the record date for the dividend. If an Authorization Card is received after the fifth business day prior to the record date established for a particular dividend, the reinvestment of dividends under the Plan will begin with the next succeeding dividend. The Company expects to set quarterly dividend and record payment dates for Common Stock on or about the following dates:

		
	Approximate Record Date

	Approximate Payment Date

	February 28

	March 8

	May 31

	June 8

	August 31

	September 8

	November 30

	December 8

          

To participate in the optional cash payment feature, a personal check drawn on a U.S. bank and made payable to Registrar and Transfer Company should be sent together with the payment form which is attached to the quarterly statement participants receive after their initial dividend has been invested. Cash payments can only be made for participants who have had at least one dividend reinvested pursuant to the Plan.

Shareholders enrolled in the Plan will remain enrolled unless they terminate their participation by giving written notice to the Agent as described below.

5.

NUMBER OF SHARES SUBJECT TO THE PLAN

Shareholders of record may participate in the Plan with respect to all or any portion of the shares of Common Stock registered in their name. If a shareholder wishes to participate in the Plan with less than all of such shareholder’s shares, the shareholder must notify the Agent in writing to that effect. Otherwise, it will be assumed that the shareholder intends to participate in the Plan with respect to all shares owned. Also, if a participant wishes to change the number of shares of Common Stock subject to the Plan, the participant must notify the Agent in writing to that effect. Any such notification received by the Agent after the fifth business day prior to a dividend payment date will not be effective until the next quarter.

6.

COSTS

The Agent will provide the service of reinvesting a participant’s dividends paid on the Company’s Common Stock or optional cash payments at no cost to the shareholder. No administrative costs of the Plan will be paid by the Company. No brokerage commissions or fees will be charged for purchases of shares made under the Plan by the Agent directly from the Company out of authorized but issued shares of the Company. The Company presently intends to bear the costs of brokerage commissions or fees incurred as a result of any purchases made under the Plan on the open market. The Company may change or eliminate this policy entirely upon written notice to participants. The reinvestment of dividends does not relieve the participant of any income tax that may be payable on the dividends or on any brokerage commissions or fees paid by the Company.

7.

PURCHASES UNDER THE PLAN

A.

METHOD OF PURCHASE

The Agent automatically will receive the full amount of dividends paid on both the shares held by participants and any additional full or fractional shares acquired under the Plan, as well as any optional cash payments made by participants. The Agent will use these funds to purchase shares of the Company’s Common Stock for Plan participants from the Company’s authorized but unissued shares. Purchases also may be made on any securities exchange where such shares are traded, in the over-the-counter market, or in negotiated transactions.

 

B.

NUMBER OF SHARES PURCHASED

The number of shares purchased under the Plan for each participant will depend on the amount of dividends reinvested and optional cash payments made to the participant’s account and the purchase price of the Common Stock. Therefore, each participant’s account will be credited with the number of shares, including a fractional share computed to four decimal places, equal to the total amount invested under the Plan by the participant (dividends and optional cash payment), divided by the applicable purchase price per share of the Common Stock.

C.

TIMING OF PURCHASES

The Agent will purchase shares as soon as practicable after cash dividends are paid in the quarters when such payments are made. In other quarters, the Agent generally will purchase shares on the first business day of the quarter. Purchases will include dividends to be reinvested and optional cash payments as of the date of purchase, as applicable. The Agent will use every reasonable effort to reinvest all dividends promptly after receipt and in no event later than 30 days after receipt unless such investments are restricted by any applicable state or federal securities laws.

No interest will be paid on dividends or optional cash payments pending reinvestment for any reason the Agent is precluded from acquiring shares for 90 consecutive days, the Agent will promptly remit all cash dividends and optional cash payments held in the participant’s Plan account to the participant after such 90th day.

D.

PURCHASE PRICE

The purchase price of original issue shares of Common Stock purchased directly from the Company will be determined once each quarter by the Board of Directors of the Company based on an annual appraisal and trading activity. The appraisal will be conducted by an  independent appraisal firm selected by the Board of Directors. The purchase price for the first quarter shall be based on the first such appraisal. Each quarter thereafter, the Board of Directors of the Company shall set the purchase price based on a review of the most recent annual appraisal and trading activity during the preceding quarter. No brokerage commissions or fees will be charged for purchases made through the Plan directly from the Company. Shares purchased on the open market under the Plan will be purchased at the price per share payable to the broker-dealer(s) involved. The Company presently intends to bear any brokerage commission or fees incurred in connection with open market purchases.

8.

OPTIONAL CASH PAYMENTS

A.

METHOD OF PAYMENTS

Once a participant has received the first Dividend Reinvestment Statement (described below) for dividends reinvested, the participant may elect to make optional cash payments to his account for additional Common Stock purchases. Each optional cash payment must be accompanied by a payment form, which is furnished by the Agent with each Dividend Reinvestment Statement. The Agent will commingle all optional cash payments credited to a participant’s account with cash dividends and optional cash payment credited to all accounts under the Plan and all such funds will be applied to the purchase of Common Stock as provided above. Optional cash payments received by the fifth business day before a dividend payment date will be combined with cash dividends and invested by the Agent at the time cash dividends are reinvested and in any event will be invested with funds received by the fifth business day before purchases are made in other quarters, as provided above. Any optional cash payments received by the Agent more than 30 days prior to a dividend payment date will be returned to the shareholder. 

The Agent will hold the participant’s optional cash payments in non-interest bearing accounts. No interest will be paid on any optional cash payment for the period following receipt by the Agent but prior to investment.  Participants are encouraged to transmit optional cash payments so as to be received by the Agent as close as possible to the fifth day prior to a dividend payment date to avoid unnecessary accumulations of funds.

A participant may obtain a refund of his or her uninvested optional cash payment upon written request to the Agent received not less than two business days prior to the investment of such payment.

A participant is under no obligation to make an optional cash payment in any quarter, and the same amount of money does not need to be sent each quarter.

B.

LIMITATIONS

Any optional cash payment must not be less than $20.00, and payments may not exceed $1,000.00 per quarter in the aggregate for any participant or for each beneficial owner on whose behalf a participant may be investing.  Only one optional cash payment may be made in each quarter by any participant, or by each beneficial owner on whose behalf a participant may be investing, and optional cash payments are only invested quarterly, as provided above. The Company may change the minimum and maximum allowable optional cash payment amount or eliminate cash payments entirely upon written notice to participants.

Participants may not draw checks or drafts against their Plan accounts in respect of any shares or cash held therein and may not sell, assign, or transfer their account.

9.

CERTIFICATES FOR SHARES

Normally, certificates for shares of Common Stock purchased under the Plan will not be issued directly to participants. Shares will be held by or through the Agent, providing protection against loss, theft, or inadvertent destruction. The number of shares credited to a participant’s account will be shown on the next statement of account sent to the participant. The participant, however, may obtain from the Agent certificates for full shares upon receipt by the Agent of a written request from the participant. Any request for issuance of a certificate received by the Agent less than five days prior to the record date for a dividend payment shall become effective only after dividends paid for such record date have been reinvested. Also, the Agent generally processes requests for certificates only once each month on or about the l5th day of each month. No certificate will be issued for a fractional share, although dividends on a fractional interest in a share will be credited to the participant’s account.

10.

REPORTS TO PARTICIPANTS

As soon as practicable after the end of each quarterly period, the Agent will send a statement of account (the “Dividend Reinvestment Statement”) to the participant. The Dividend Reinvestment Statement will include information regarding each purchase and other information regarding the status of the participant’s account as of the date of such statement. The Dividend Reinvestment Statements will provide a record of the cost basis of shares purchased under the Plan and should be retained for tax purposes.

11.

WITHDRAWALS OF SHARES PURCHASED UNDER THE PLAN

A participant may withdraw all or any portion of the full shares of Common Stock held in the participant’s account under the Plan for a fee of $10.00 by notifying the Agent in writing to that effect. Upon notification and payment, a certificate for the full shares withdrawn will be issued in the name of the participant and mailed to him. No certificate will be issued for a fractional share interest.

Withdrawals of some or all of the full shares in a participant’s account will not terminate the participant’s enrollment in the Plan

12.

TERMINATION OF PARTICIPATION

A participant may terminate his account by notifying the Agent in writing to that effect. Any notice of termination received by the Agent less than five days prior to the record date for a dividend payment shall become effective only after dividends paid for such record date have been reinvested. Upon termination, the Agent will issue to the participant a certificate for the number of full shares of Common Stock and a check for any fractional share in the participant’s account. The Agent generally issues such certificates and checks only once each month, on or about the 15th day of each month.

13.

OTHER FEATURES

A.

STOCK SPLITS, STOCK DIVIDENDS, AND RIGHTS OFFERINGS

Stock splits or stock dividends on shares held in a participant’s account will be credited to the account based on the number of shares (including fractional share interests) held in the account on the record date for such dividend or split. The Agent will report the amount of dividends received on shares or fractional shares held in each account.

In the event the Company offers rights or warrants to purchase additional shares of Common Stock or other securities to the holders of Common Stock, such rights or warrants will be made available to participants based on the number of shares, including fractional share interests to the Common Stock entitled to such rights or warrants.

B.

VOTING OF SHARES PURCHASED UNDER THE PLAN

All full and fractional shares credited to a participant’s account under the Plan will be added to the shares registered in the participant’s name on the shareholder records of the Company. The participant will receive one proxy covering the total of such shares, which proxy shall be voted as the participant directs; or, if the participant so elects, the participant may vote all of such shares in person at the shareholders’ meeting.

14.

FEDERAL INCOME TAX CONSEQUENCES

Dividends and other distributions by the Company to shareholders generally will be taxed as ordinary dividend income. Participants who acquire additional shares of Common Stock through the Plan directly from the Company with reinvested cash dividends will be treated for federal income tax purposes as having received a taxable stock distribution. As a result, an amount equal to the fair market value on the investment date of the shares acquired directly from the Company with reinvested cash dividends will be treated as a dividend paid to participants. The tax basis of the shares acquired directly from the Company with such reinvested dividends also will equal the fair market value of the shares on the investment date.

Participants who acquire additional shares of Common Stock through the Plan through open market purchases made with reinvested cash dividends will be deemed to have received a taxable dividend equal to the amount of the cash dividend reinvested plus the amount of any brokerage fees paid by the Company with respect to such additional shares. The participant’s tax basis in these shares acquired on the open market will equal the purchase price of the shares plus any brokerage fees paid with respect to the shares.

Participants in the Plan will not realize any taxable income at the time of investment of optional cash payments in additional shares of Common Stock acquired directly from the Company. The tax basis of shares purchased directly from the Company with an optional cash payment will be the fair market value of the shares on the investment date.

Participants who acquire additional shares of Common Stock through open market purchases made with optional cash payments will be treated as receiving a cash dividend equal to the amount of any brokerage fees paid by the Company with respect to such shares. The tax basis of shares purchased on the open market with an optional cash payment will equal the purchase price of the shares, plus any brokerage fees paid by the Company with respect to such shares.

The holding period of shares of Common Stock acquired through the Plan, whether purchased with reinvested dividends or optional cash payments, will begin on the day following the investment date.

Participants in the Plan will not realize any taxable income when they receive certificates for full shares credited to their accounts, whether upon their written requests for such certificates, upon full shares credited to their account, or upon withdrawal from or termination of participation in the Plan. Participants, however, will realize taxable gain or loss (which for most participants, will be capital gain or loss) when full shares acquired under the Plan are sold or exchanged by the participant and when participants receive a cash payment for a fractional share credited to their account. The amount of such gain or loss will be the difference between the amount that the participant receives for his shares or fractional share (net of brokerage commissions and other costs of sale) and the tax basis thereof.

For foreign participants who elect to have their cash dividends reinvested and whose dividends are subject to United States income tax withholding, and any other participant for whom federal income tax withholding on dividends is required, an amount equal to the cash dividends payable to such participants, less the amount of tax required to be withheld, will be applied to the purchase of Common Stock through the Plan.

The foregoing is intended only as a general discussion of the current federal income tax consequences of participation in the Plan. It does not include a discussion of state and local income tax consequences of participation in the Plan. For specific information on the tax consequences of participation in the Plan, including any future changes in applicable law or interpretation thereof, participants should consult their own tax advisors.

15.

CHANGE AND TERMINATION OF THE PLAN; INTERPRETATION OF THE PLAN

The Company reserves the right to change, suspend, or terminate the Plan at any time. Participants shall be notified of any such change, suspension, or termination. Any question of interpretation arising under the Plan will be determined by the Company. The Plan and all transactions in connection with the Plan will be governed by and construed in accordance with the laws of the State of North Carolina.

This Second Amended and Restated Plan was adopted by the Board of Directors of Four Oaks Fincorp, Inc. effective as of December 18, 2006.

/s/ Wanda J. Blow

Wanda J. Blow

Secretary

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