Document:

Exhibit

Exhibit 10.25

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated as of the 30th day of September, 2016, is between 40|86 Advisors, Inc., a Delaware corporation (“Company”), and Eric R. Johnson (“Executive”).
    
WHEREAS, the Company and Executive entered into an Amended and Restated Employment Agreement dated December 17, 2014 and they now desire to amend and restate such agreement.

WHEREAS, the continued services of Executive and his managerial and professional experience are of value to the Company.

WHEREAS, the Company desires to have the benefit and advantage of the services of Executive to assist the Company and CNO Financial Group, Inc. (“CNO”) upon the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained herein, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.    Employment.  The Company hereby employs Executive and Executive hereby accepts employment upon the terms and conditions hereinafter set forth.

2.    Term.  The effective date of this agreement (the “Agreement”) shall be the date first written above (the “Effective Date”).  Subject to the provisions for termination as provided in Section 10 hereof, the term of Executive’s employment under this Agreement shall be the period beginning on the Effective Date and ending on September 30, 2019 (the “Term").  The Term shall not be automatically renewed and shall end upon any earlier termination of Executive’s employment with the Company.

3.    Duties.  During the Term, Executive shall be engaged by the Company in the capacity of President of the Company and a member of the board of directors of the Company, and he shall be an Executive Vice President of CNO, or he shall serve in such other senior executive capacity as the Chief Executive Officer of CNO shall specify.  Executive shall report to the Chief Executive Officer of CNO or such other senior executive officer as the Chief Executive Officer of CNO may specify regarding the performance of his duties.

4.    Extent of Services.  During the Term, subject to the direction and control of the Chief Executive Officer of CNO, Executive shall have the power and authority commensurate with his executive status and necessary to perform his duties hereunder.  Executive shall devote his entire employable time, attention and best efforts to the business of the Company and, during the Term, shall not, without the consent of the Company, be actively engaged in any other business activity, whether or not such business activity is pursued for gain, profit or other pecuniary advantage; provided, however, that this shall not be construed as preventing Executive 

from serving on boards of professional, community, civic, education, charitable and corporate organizations on which he presently serves or may choose to serve or investing his assets in such form or manner as will not require any services on the part of Executive in the operation of the affairs of the companies in which such investments are made (to the extent not in violation of the non-solicitation provisions of Section 9 hereof); provided, however, that corporate organizations shall be limited to those mutually agreed upon by Executive and the Company.

5.    Compensation.  During the Term:

(a)    As compensation for services hereunder rendered during the Term hereof, Executive shall receive a base salary (“Base Salary”) of Five Hundred Thousand Dollars ($500,000) per year payable in equal installments in accordance with the Company’s payroll procedure for its salaried executives.  Salary payments and other payments under this Agreement shall be subject to withholding of taxes and other appropriate and customary amounts.  Executive may receive increases in his Base Salary from time to time, based upon his performance, subject to approval of the Company.

(b)    In addition to Base Salary, Executive will have an opportunity to earn a bonus each year, as determined by the Company, with a target annual bonus equal to 100% of Executive's Base Salary (the “Target Bonus”) and a maximum annual bonus of 200% of Executive's Base Salary with respect to any calendar year, with such bonus payable at such time that other similar payments are made to other Company executives but in no event later than March 15 of the year following the year with respect to which such bonus was payable, unless the bonus amounts to be paid cannot be confirmed and paid on or before March 15, in which event the bonuses will be paid within 15 days after the bonus amounts have been confirmed by the Company.  For purposes of clarification, annual executive bonuses are payable on or before March 15 of the year following the year with respect to which such bonuses are payable, if Executive remains employed with the Company through such date or as otherwise payable under Section 11 of this Agreement.  Notwithstanding the above, a pro-rata portion of the 2019 bonus will be paid at the same time that similar payments are made to other Company executives if Executive remains employed through the end of the Term.  The performance requirements for Target Bonuses will be based on financial and other objective targets that the CNO Board of Directors (the “Board”) or the Human Resources and Compensation Committee of the Board (the “Compensation Committee”) believes are reasonably attainable at the time that they are set.  

(c)    Executive shall be eligible to participate in and receive future grants under any CNO stock or equity-based program offered to senior executives, subject to the discretion of the Board or the Compensation Committee. 

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6.    Additional Benefits.  During the Term:

(a)    Executive shall be entitled to participate in such existing executive benefit plans and insurance programs offered by the Company, or which it may adopt from time to time, for its executive management or supervisory personnel generally, in accordance with the eligibility requirements for participation therein.  Nothing herein shall be construed so as to prevent the Company from modifying or terminating any executive benefit plans or programs, or additional executive benefits, that it may adopt from time to time.  

(b)    Executive shall be entitled to four weeks of vacation with pay each year.

(c)    Executive may incur reasonable expenses for promoting the Company’s business, including expenses for entertainment, travel, and similar items.  The Company shall reimburse Executive for all such reasonable expenses upon Executive’s periodic presentation of an itemized account of such expenditures in accordance with the Company’s policies and procedures and Section 21 hereof; provided, however, that any such reimbursement will be made no later than March 15 of the year following the year in which the expense was incurred.  The Company agrees to pay Executive an additional amount to cover the incremental additional income taxes incurred by Executive, if any, with respect to payment or reimbursement of any reasonable business expenses pursuant to this subsection (c); provided, however, that any such payment will be made no later than March 15 of the year following the year in which the income tax was incurred. 

(d)     Executive shall be permitted to make elective contributions to any Company-sponsored, non-qualified deferred compensation plan in accordance with the terms of such plan.

7.    Disability.  

(a)     If Executive shall become physically or mentally disabled during the Term to the extent that his ability to perform his duties and services hereunder is materially and adversely impaired (any such incapacity, a “Disability”), his Base Salary, bonus and other compensation provided herein shall continue while he remains employed by the Company; provided, that if such Disability (as determined in the Company’s reasonable judgment, exercised in good faith) continues for at least three (3) consecutive months, the Company may terminate Executive’s employment hereunder, in which case the Company within 10 business days shall pay Executive a cash payment equal to (i) his annual Base Salary as provided in Section 5(a) hereof to the extent earned but unpaid as of the date of termination (“Unpaid Salary”), (ii) the bonus payable pursuant to Section 5(b) for the fiscal year of the Company ending prior to the date of termination (to the extent earned based on performance under the goals and objectives of the applicable plan but not previously paid) (“Unpaid Bonus”) and (iii) Executive’s then accrued but unused vacation (“Unpaid Vacation”) (the Unpaid Salary, Unpaid Bonus and Unpaid Vacation referred to sometimes together as the “Accrued Amounts”).  Additionally, in the event of a termination of employment due to Disability, the Company shall pay to Executive a pro-rata portion of the Target Bonus for the year in which the termination for Disability 

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occurred, payable at the same time when the bonus payment for the year of termination otherwise would have been paid pursuant to Section 5(b).  All options, restricted stock and/or other equity awards held by Executive on the date of termination for Disability shall vest only through the date of termination according to the normal vesting schedule applicable to such awards and shall be treated in accordance with the applicable award agreements.  

(b)     No payments or vesting under this Section 7 will be made if such Disability arose primarily from (a) chronic use of intoxicants, drugs or narcotics (other than drugs prescribed to Executive by a physician and used by Executive for their intended purpose for which they had been prescribed) or (b) intentionally self-inflicted injury or intentionally self-induced illness.

8.    Disclosure of Information.  Executive acknowledges that, in and as a result of his employment with the Company, he has been and will be making use of, acquiring and/or adding to confidential information of the Company and its affiliates of a special and unique nature and value.  As a material inducement to the Company to enter into this Agreement and to pay to Executive the compensation stated in Section 5, as well as any additional benefits stated herein, Executive covenants and agrees that he shall not, at any time while he is employed by the Company or at any time thereafter, directly or indirectly, divulge or disclose for any purpose whatsoever, any confidential information (whether or not specifically labeled or identified as “confidential information”), in any form or medium, that has been obtained by or disclosed to him as a result of his employment with the Company and which the Company or any of its affiliates has taken appropriate steps to safeguard, except to the extent that such confidential information (a) becomes a matter of public record or is otherwise available to the general public, other than as a result of any act or omission of Executive, (b) is required to be disclosed by any law, regulation or order of any court or regulatory commission, department or agency, in which event Executive shall give prompt notice of such requirement to the Company to enable the Company to seek an appropriate protective order or confidential treatment, (c) must be disclosed to enable Executive properly to perform his duties under this Agreement or (d) was developed by Executive prior to his employment by the Company.  Upon the termination of Executive’s employment, Executive shall return such information (in whatever form) obtained from or belonging to the Company or any of its affiliates which he may have in his possession or control.

9.    Covenants against Solicitation.  Executive acknowledges that the services he is to render to the Company and its affiliates are of a special and unusual character, with a unique value to the Company and its affiliates, the loss of which cannot adequately be compensated by damages or an action at law.  In view of the unique value to the Company and its affiliates of the services of Executive for which the Company has contracted hereunder, because of the confidential information to be obtained by, or disclosed to, Executive as set forth in Section 8 above, and as a material inducement to the Company to enter into this Agreement and to pay to Executive the compensation stated in Section 5 hereof, as well as any additional benefits stated herein, and other good and valuable consideration, Executive covenants and agrees that throughout the period Executive remains employed or compensated hereunder and for one year thereafter, Executive shall not, directly or indirectly, anywhere in the United States of America (i) solicit or attempt to convert to other insurance carriers or other corporations, persons or other 

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entities providing these same or similar products or services provided by the Company and its affiliates, any customers or policyholders of the Company or any of its affiliates; or (ii) solicit for employment or employ any individual who was employed by the Company or any of its affiliates during the term of Executive’s employment with the Company.  Should any particular covenant or provision of this Section 9 be held unreasonable or contrary to public policy for any reason, including, without limitation, the time period, geographical area, or scope of activity covered by any restrictive covenant or provision, the Company and Executive acknowledge and agree that such covenant or provision shall automatically be deemed modified such that the contested covenant or provision shall have the closest effect permitted by applicable law to the original form and shall be given effect and enforced as so modified to whatever extent would be reasonable and enforceable under applicable law. 

10.    Termination.  During the Term:

(a)    Either the Company or Executive may terminate his employment at any time for any reason upon written notice to the other.  Without limiting the foregoing, the Company may terminate Executive’s employment for Just Cause pursuant to Section 10(b) below or in a Control Termination pursuant to Section 10(c) below.  Without limiting the foregoing, Executive may terminate his employment With Reason pursuant to Section 10(d) below.  Executive’s employment shall also terminate (i) upon the death of Executive or (ii) after Disability of Executive pursuant to Section 7 hereof.  The date on which Executive’s employment with the Company terminates for any reason is called the “Termination Date”.

(b)    The Company may terminate Executive’s employment at any time for Just Cause.  For purposes of this Agreement, “Just Cause” shall mean: 

 (i)  (A) material breach by Executive of this Agreement not cured within 15 days after written notice to Executive by the Company, (B) a material breach of Executive’s duty of loyalty to the Company or its affiliates not cured within 15 days after written notice to Executive by the Company, or (C) willful malfeasance or fraud or dishonesty of a substantial nature in performing Executive’s services on behalf of the Company or its affiliates, which in each case is willful and deliberate on Executive’s part and committed in bad faith or without reasonable belief that such breach or action is in the best interests of the Company or its affiliates; 

(ii)  Executive’s use of alcohol or drugs (other than drugs prescribed to Executive by a physician and used by Executive for their intended purposes for which they had been prescribed) or other repeated conduct which materially and repeatedly interferes with the performance of his duties hereunder, which materially compromises the integrity or the reputation of the Company or its affiliates, or which results in other substantial economic harm to the Company or its affiliates; 

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(iii)  Executive’s conviction by a court of law, admission that he is guilty, or entry of a plea of nolo contendere with regard to a felony or other crime involving moral turpitude; 

(iv)  Executive’s unscheduled absence from his employment duties other than as a result of illness or disability, for whatever cause, for a period of more than three (3) consecutive days, without consent from the Company prior to the expiration of the three (3) day period; 

(v)  Executive’s failure to take action or to abstain from taking action, as directed in writing by a member of the Board or a higher ranking executive of the Company or CNO, where such failure continues after Executive has been given written notice of such failure and at least five (5) business days thereafter to cure such failure; or

(vi)  any intentional wrongful act or omission by Executive that results in the restatement of CNO’s financial statements due to a violation of the Sarbanes-Oxley Act of 2002.

No termination shall be deemed to be a termination by the Company for Just Cause if the termination is as a result of Executive refusing to act in a manner that Executive believes in good faith would be a violation of applicable law or where Executive acts (or refrains from taking action) in good faith in accordance with directions of a member of the Board or higher ranking executive but was unable to attain the desired results because such results were inherently unreasonable or unattainable.

(c)    The Company may terminate Executive’s employment in a Control Termination.  A "Control Termination" shall mean any termination by the Company (or its successor) of Executive’s employment for any reason within six months in anticipation of or within two years following a Change in Control.

The term "Change in Control" shall mean the occurrence of any of the following:

(i) the acquisition (other than an acquisition in connection with a “Non-Control Transaction”) by any "person" (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "1934 Act")) of "beneficial ownership" (as such term is defined in Rule 13d-3 promulgated under the 1934 Act), directly or indirectly, of securities of CNO or its Ultimate Parent representing 51% or more of the combined voting power of the then outstanding securities of CNO or its Ultimate Parent entitled to vote generally with respect to the election of the Board or the board of directors of CNO’s Ultimate Parent; or 
(ii) as a result of or in connection with a tender or exchange offer or contest for election of directors, individual board members of CNO (identified as of the date of commencement of such tender or exchange offer, or the commencement of such election contest, as the case may be) cease to constitute at least a majority of the Board; or 

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(iii) the consummation of a merger, consolidation or reorganization with or into CNO unless (x) the stockholders of CNO immediately before such transaction beneficially own, directly or indirectly, immediately following such transaction securities representing 51% or more of the combined voting power of the then outstanding securities entitled to vote generally with respect to the election of the board of directors of CNO (or its successor) or, if applicable, the Ultimate Parent and (y) individual board members of CNO (identified as of the date that a binding agreement providing for such transaction is signed) constitute at least a majority of the board of directors of CNO (or its successor) or, if applicable, the Ultimate Parent (a transaction to which clauses (x) and (y) apply, a “Non-Control Transaction”).  
For purposes of this Agreement, “Ultimate Parent” shall mean the parent corporation (or if there is more than one parent corporation, the ultimate parent corporation) that, following a transaction, directly or indirectly beneficially owns a majority of the voting power of the outstanding securities entitled to vote with respect to the election of the board of directors of CNO (or its successor).
(d)    At Executive's option, he may terminate employment with the Company "With Reason" provided one or more of the following conditions are met: (i) any reduction in Executive's Base Salary or Target Bonus without his consent, or (ii) there is a "Change in Control" as defined in Section 10(c) and, following Executive's written request made prior to the Change in Control, the ultimate parent entity or entities directly or indirectly gaining control of a majority of the Board or outstanding securities entitled to vote with respect to the Board fails to affirm and guarantee the Company's current and future obligations under this Agreement; provided that the events described in clauses (i) and (ii) above shall constitute With Reason only if the Company fails to cure such event (if capable of being cured) within 30 days after receipt from Executive of written notice of the event which constitutes With Reason; provided, further, that With Reason shall cease to exist for an event on the 60th day following the later of its occurrence or Executive’s knowledge thereof, unless Executive has given the Company written notice thereof prior to such date.
(e)    Upon termination of Executive’s employment with the Company for any reason (whether voluntary or involuntary), Executive shall be deemed to have voluntarily resigned from all positions that Executive may then hold with the Company and any of its affiliates; provided that such deemed resignation shall not adversely affect Executive’s rights to compensation or benefits under this Agreement and shall not affect the determination of whether Executive's termination was for Just Cause or With Reason.
		
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	Payments Following Termination.

(a)    In the event that Executive’s employment is terminated by the Company for Just Cause or if Executive voluntarily resigns (other than With Reason), then (i) the Company within 10 business days shall pay Executive a cash payment of his Base Salary as provided in Section 5(a) hereof that was earned but unpaid as of the date of termination and (ii) no bonus for the year of termination will be earned or paid to 

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Executive.  All stock options, restricted stock and/or other equity awards held by Executive on the date of termination shall be treated in accordance with the applicable award agreements. 

(b)    In the event Executive’s employment is terminated by the death of Executive, then the Company shall pay Executive’s estate within 30 days (i) the Accrued Amounts and (ii) a pro-rata portion of the Target Bonus for the year in which his death occurs.  All stock options, restricted stock and/or other equity awards held by Executive on the date of termination shall be treated in accordance with the applicable award agreements.

(c)  In the event that Executive is terminated (i) by the Company without Just Cause (and other than a termination due to expiration of the Term, death, Disability or a Control Termination), (ii) by reason of expiration of the Term or (iii) by Executive With Reason, then the Company shall pay Executive within 30 days of the Termination Date the Accrued Amounts.  Additionally, following such a termination, Executive shall be entitled to receive (i) a bonus pursuant to Section 5(b) based on CNO’s actual performance for the year in which Executive is terminated (prorated for the partial year period ending on the Termination Date), payable at the same time when such bonus amount normally would have been paid pursuant to Section 5(b), and (ii) a cash lump sum (payable within 75 days following the Termination Date) equal to the sum of his annual Base Salary and Target Bonus.  All stock options, restricted stock and/or other equity awards held by Executive on the date of termination shall be treated in accordance with the applicable award agreements. 

 (d)  In the event that Executive is terminated by the Company (or its successor) in a Control Termination as so defined, then the Company shall pay Executive within 30 days of the Termination Date the Accrued Amounts.   Additionally, following such a termination, Executive shall be entitled to receive (i) a bonus pursuant to Section 5(b) based on CNO’s actual performance for the year during which Executive is terminated (prorated for the partial year period ending on the Termination Date), payable at the same time as such bonus payment would have been paid pursuant to Section 5(b), and (ii) a cash lump sum (payable within 75 days following the Termination Date) equal to two times the sum of (A) his Target Bonus and (B) his annual Base Salary.  All stock options, restricted stock and/or other equity awards held by Executive upon the occurrence of a Change in Control shall be treated in accordance with the applicable award agreements. 

 (e)   Notwithstanding anything to the contrary, payment of any severance under this Agreement is conditioned upon the execution by Executive within 60 days following the Termination Date of a separation and release agreement in a form acceptable to the Company and the observation of such waiting or revocation periods, if any, before and after execution of the agreement by Executive as are required by law, such as, for example, the waiting or revocation periods required for a waiver and release to be effective with respect to claims under the Age Discrimination in Employment Act, provided that the Company delivers to Executive such agreement within seven days of the Termination Date.  In the event that the 60-day period following the Termination 

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Date straddles two calendar years, the severance payments described above shall not be paid prior to the second of such calendar years.

12.    Character of Termination Payments.  The amounts payable to Executive upon any termination of his employment shall be considered severance pay in consideration of past services rendered on behalf of the Company and his continued service from the date hereof to the date he becomes entitled to such payments and shall be the sole amount of severance pay to which Executive is entitled from the Company and its affiliates upon termination of his employment during the Term.  Executive shall have no duty to mitigate his damages by seeking other employment and, should Executive actually receive compensation from any such other employment, the payments required hereunder shall not be reduced or offset by any such other compensation.

13.    Representations of the Parties.

(a)    The Company represents and warrants to Executive that (i) this Agreement has been duly authorized, executed and delivered by the Company and constitutes valid and binding obligations of the Company; and (ii) the employment of Executive on the terms and conditions contained in this Agreement will not conflict with, result in a breach or violation of, constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant to: (A) the certificate of formation, (B) the terms of any indenture, contract, lease, mortgage, deed of trust, note, loan agreement or other agreement, obligation, condition, covenant or instrument to which the Company is a party or bound or to which its property is subject, or (C) any statute, law, rule, regulation, judgment, order or decree applicable to the Company, or any regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Company.

(b)    Executive represents and warrants to the Company that: (i) this Agreement has been duly executed and delivered by Executive and constitutes a valid and binding obligation of Executive; and (ii) neither the execution of this Agreement by Executive nor his employment by the Company on the terms and conditions contained herein will conflict with, result in a breach or violation of, or constitute a default under any agreement, obligation, condition, covenant or instrument to which Executive is a party or bound or to which his property is subject, or any statute, law, rule, regulation, judgment, order or decree applicable to Executive of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over Executive or any of his property.

14.    Arbitration of Disputes; Injunctive Relief.

(a)    Arbitration.  Except as provided in subsection (b) below, any controversy or claim arising out of or relating to this Agreement or the breach thereof shall be settled by binding arbitration in the City of Indianapolis, Indiana, in accordance with the laws of the State of Indiana by three arbitrators, one of whom shall be appointed by the Company, one by Executive, and the third of whom shall be appointed by the first two arbitrators.  If the first two arbitrators cannot agree on the appointment of a third 

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arbitrator, then the third arbitrator shall be appointed by the Chief Judge of the United States District Court for the Southern District of Indiana.  The arbitration shall be conducted in accordance with the rules of the American Arbitration Association, except with respect to the selection of arbitrators, which shall be as provided in this Section.  Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.  All reasonable costs and expenses (including fees and disbursements of counsel) incurred by Executive pursuant to this Section 14 shall be paid on behalf of or reimbursed to Executive promptly by the Company; provided, however, that in the event the Company prevails in such proceedings, Executive shall immediately repay all such amounts to the Company.

(b)    Executive acknowledges that a breach or threatened breach by Executive of Sections 8 or 9 of this Agreement will give rise to irreparable injury to the Company and that money damages will not be adequate relief for such injury.  Notwithstanding paragraph (a) above, the Company and Executive agree that the Company may seek and obtain injunctive relief, including, without limitation, temporary restraining orders, preliminary injunctions and/or permanent injunctions, in a court of proper jurisdiction to restrain or prohibit a breach or threatened breach of Section 8 or 9 of this Agreement.  Nothing herein shall be construed as prohibiting the Company from pursuing any other remedies available to the Company for such breach or threatened breach, including the recovery of damages from Executive.  

15.    Notices.  Any notice required or permitted to be given under this Agreement shall be sufficient if in writing and if sent by registered mail to his residence, in the case of Executive, or to the business office of its General Counsel, in the case of the Company.

16.    Waiver of Breach and Severability.  The waiver by either party of a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach by either party.  In the event any provision of this Agreement is found to be invalid or unenforceable, it may be severed from the Agreement, and the remaining provisions of the Agreement shall continue to be binding and effective.

17.    Entire Agreement.  Other than any equity award agreements entered into pursuant to the CNO Financial Group, Inc. Amended and Restated Long-Term Incentive Plan or any subsequent incentive plan, this instrument contains the entire agreement of the parties and, as of the Effective Date, supersedes all other obligations of the Company and its affiliates under other agreements or otherwise.  The compensation and benefits to be paid under the terms of this Agreement are in lieu of all other compensation or benefits to which Executive is entitled from CNO, the Company, and its affiliates, and upon termination of Executive’s employment with the Company Executive will not be entitled to receive any severance or other payments beyond those specified in this Agreement.  This Agreement may not be changed orally, but only by an instrument in writing signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought.

18.    Binding Agreement and Governing Law; Assignment Limited.  This Agreement shall be binding upon and shall inure to the benefit of the parties and their lawful successors in interest (including, without limitation, Executive’s estate, heirs and personal representatives) and, except for issues or matters as to which federal law is applicable, shall be construed in 

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accordance with and governed by the laws of the State of Indiana.  This Agreement is personal to each of the parties hereto, and neither party may assign or delegate any of its rights or obligations hereunder without the prior written consent of the other.

19.    Indemnification.  If Executive was or is made a party or is threatened to be made a party to or is otherwise involved (including involvement as a witness) in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that he is or was an officer or employee of the Company or any of its affiliates, Executive shall be indemnified and held harmless by the Company to the fullest extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader indemnification rights than permitted prior thereto), against all expense, liability and loss (including attorneys’ fees, judgments, fines, excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by Executive in connection therewith and such indemnification shall continue as to Executive if he ceases to be an officer or employee and shall inure to the benefit of Executive's heirs, executors and administrators; provided, however, that the Company shall indemnify Executive in connection with a Proceeding (or part thereof) initiated by Executive only if such Proceeding (or part thereof) was authorized by the board of directors of the Company.  The right to indemnification conferred in this paragraph shall include the obligation of the Company to pay the expenses incurred in defending any such Proceeding in advance of its final disposition (an “Advance of Expenses”); provided, however, that, if and to the extent that the Delaware General Corporation Law requires, an Advance of Expenses incurred by Executive in his capacity as an officer or employee shall be made only upon delivery to the Company of an undertaking, by or on behalf of Executive, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that Executive is not entitled to be indemnified for such expenses under this paragraph or otherwise.

20.     No Third Party Beneficiaries.  The terms and provisions of this Agreement are intended solely for the benefit of each party hereto and their respective successors or permitted assigns, and it is not intended to confer third-party beneficiary rights upon any other person.

21.    Section 409A.  This Agreement is intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended from time to time (the “Code”), and will be interpreted accordingly.  References under this Agreement to Executive’s termination of employment shall be deemed to refer to the date upon which Executive has experienced a “separation from service” within the meaning of Section 409A of the Code.  Notwithstanding anything herein to the contrary, (i) if at the time of Executive’s separation from service with the Company Executive is a “specified employee” as defined in Section 409A of the Code (and any related regulations or announcements thereunder) and the deferral of the commencement of any payments or benefits otherwise payable hereunder or payable under any other compensatory arrangement between Executive and the Company or any of its affiliates as a result of such separation from service is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to Executive) until the date that is six months following Executive’s separation from service (or the earliest date as is permitted under Section 409A of the Code), at which point all payments deferred pursuant to this Section 21 shall be paid to Executive in a 

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lump sum and (ii) if any payments of money or other benefits due to Executive hereunder could cause the application of an accelerated or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Section 409A of the Code, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner that does not cause such an accelerated or additional tax.  To the extent any reimbursements or in-kind benefits due to Executive under this Agreement constitute “deferred compensation” under Section 409A of the Code, any such reimbursements or in-kind benefits shall be paid to Executive in a manner consistent with Treas. Reg. Section 1.409A-3(i)(l)(iv).  Additionally, to the extent that Executive’s receipt of any in-kind benefits from the Company or its affiliates must be delayed pursuant to this Section 21 due to his status as a “specified employee,” Executive may elect to instead purchase and receive such benefits during the period in which the provision of benefits would otherwise be delayed by paying the Company (or its affiliates) for the fair market value of such benefits (as determined by the Company in good faith) during such period.  Any amounts paid by Executive pursuant to the preceding sentence shall be reimbursed to Executive as described above on the date that is six months following his separation from service.  Each payment made under this Agreement shall be designated as a “separate payment” within the meaning of Section 409A of the Code.  The Company shall consult with Executive in good faith regarding the implementation of the provisions of this Section 21, provided that neither the Company nor any of its employees or representatives shall have any liability to Executive with respect thereto.

22.  Effect of Excise Tax and Limit on Golden Parachute Payments.

(a)     Contingent Reduction of Parachute Payments. If there is a change in ownership or control of CNO that would cause any payment or distribution by the Company or any of its subsidiaries or any other person or entity to Executive or for Executive’s benefit (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) (each, a “Payment”, and collectively, the “Payments”) to be subject to the excise tax imposed by Section 4999 of the Code (such excise tax, together with any interest or penalties incurred by Executive with respect to such excise tax, the “Excise Tax”), then Executive will receive the greatest of the following, whichever gives Executive the highest net after-tax amount (after taking into account federal, state, local and social security taxes): (1) the Payments or (2) one dollar less than the amount of the Payments that would subject Executive to the Excise Tax (the “Safe Harbor Amount”). If a reduction in the Payments is necessary so that the Payments equal the Safe Harbor Amount, then the reduction will be determined in a manner which has the least economic cost to Executive and, to the extent the economic cost is equivalent, will be reduced in the inverse order of when payment would have been made to Executive, until the reduction is achieved.  Any reductions pursuant to this Section shall be made in a manner intended to be consistent with the requirements of Section 409A of the Internal Revenue Code.

(b)    Determination of the Payments. All determinations required to be made under this Section, including whether and when the Safe Harbor Amount is required and the amount of the reduction of the Payments and the assumptions to be utilized in arriving at such determination, shall be made by the Company which shall provide detailed supporting calculations to Executive.  Executive shall cooperate with any reasonable requests by the Company in connection with any contests or disputes with the Internal Revenue Service in connection with the Excise Tax.

12

(c)     Adjustments.    As a result of the uncertainty in the application of Section 4999 of the Code at the time of a determination hereunder, it is possible that Payments will be made which should not have been made under clause (a) of this Section (“Overpayment”) or that additional Payments which are not made pursuant to clause (a) of this Section should have been made (“Underpayment”).  In the event that there is a final determination by the Internal Revenue Service, or a final determination by a court of competent jurisdiction, that an Overpayment has been made, any such Overpayment shall be treated for all purposes as a loan to Executive which Executive shall repay to the Company together with interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code.  In the event that there is a final determination by the Internal Revenue Service, a final determination by a court of competent jurisdiction or a change in the provisions of the Code or regulations pursuant to which an Underpayment arises under this Agreement, any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive, together with interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code.  
23.  Counterparts:  This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties have executed this Agreement on November 7, 2016, to be effective as of the Effective Date.

	
	
	COMPANY

	40|86 ADVISORS, INC.

	 

	/s/ Karl W. Kindig

	Karl W. Kindig

	Assistant Secretary

	 

	EXECUTIVE

	 

	/s/ Eric R. Johnson

	Eric R. Johnson

13Exhibit 10.1

 

STANDBY PURCHASE AGREEMENT

 

FIRST UNITED CORPORATION

 

IN THE EVENT YOU DECIDE NOT TO MAKE A STANDBY
COMMITMENT TO PURCHASE SECURITIES IN THIS STANDBY OFFERING, PLEASE RETURN THIS STANDBY PURCHASE AGREEMENT (TOGETHER WITH ALL AMENDMENTS
THEREOF AND SUPPLEMENTS THERETO) TO:

 

First United Corporation

19 South Second Street

Oakland, MD 21550

Attention: Carissa L. Rodeheaver, Chairman, President &
CEO

 

     

     

    

 

INSTRUCTIONS

 

1.          Please
complete, date and sign (a) the Standby Purchase Agreement and (b) the Investor Qualification Questionnaire that is attached to
the Standby Agreement as Exhibit A, retain copies for your records, and deliver the signed originals to:

 

First United Corporation

19 South Second Street

Oakland, MD 21550

Attention: Carissa L. Rodeheaver, Chairman, President &
CEO

 

2.          Please
indicate on the signature page to the Standby Purchase Agreement the number of shares of common stock of First United Corporation
that you wish to commit to purchase in the Standby Offering (as defined in the Standby Purchase Agreement) and the aggregate subscription
price for those shares.

 

3.          Once
the Company accepts your commitment, it will not be revocable by you.

 

    	 	-ii-	 

     

    

 

STANDBY PURCHASE AGREEMENT

 

THIS STANDBY PURCHASE AGREEMENT (this “Agreement”)
is entered into this ___ day of November, 2016 by and between the undersigned standby purchaser (the “Standby Purchaser“)
and First United Corporation (the “Company”). The Standby Purchaser and the Company are each sometimes referred to
herein as a “Party” and are collectively referred to herein as the “Parties”.

 

WHEREAS, the Company proposes to distribute,
at no charge, to each holder of record of shares of common stock, par value $0.01 per share, of the Company (the “Common
Stock”) on a record date to be set by the Board of Directors of the Company (the “Record Date”) non-transferable
rights (the “Rights”) to subscribe for and purchase, in the aggregate, up to 783,626 additional shares of Common Stock
(the “New Shares”); and

 

WHEREAS, in such offering (the “Rights
Offering”), the Company’s shareholders of record as of the Record Date will receive one Right for each share of Common
Stock held as of the Record Date, with each Right entitling the holder to purchase 0.125 shares of Common Stock at a price per
share equal to 90% of the volume weighted average closing sales price of the common stock as reported on The NASDAQ Stock Market
for the 20 trading days immediately preceding the date on which the Registration Statement (as defined 2(c) hereof) is declared
effective, provided that in no event will such price be less than $9.00 per share nor more than $11.93 per share (the “Subscription
Price”); and

 

WHEREAS, each holder of Rights who fully exercises
its Rights in the Rights Offering (the “Basic Subscription Privilege”) will be entitled to subscribe, at the Subscription
Price, for additional shares of Common Stock to the extent they are available (the “Over-Subscription Privilege”);
and

 

WHEREAS, to facilitate the Rights Offering,
the Company is offering (the “Standby Offering”) to the Standby Purchaser and other selected accredited investors (each,
an “Investor” and collectively, the “Investors”) the opportunity to purchase, at the Subscription Price
and subject to the terms and conditions of this Agreement, any shares of Common Stock that are not purchased in the Rights Offering
pursuant to the exercise of Rights under the Basic Subscription Privilege or pursuant to the Over-Subscription Privilege (the “Unsubscribed
Shares”); and

 

NOW THEREFORE, in consideration of the mutual
covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the Parties, intending to be legally bound hereby, agree as follows:

 

1.            Standby
Purchase Commitment.

 

(a)          Standby
Purchase Commitment. If and to the extent Unsubscribed Shares are not purchased by the Company’s stockholders in the
Rights Offering pursuant to the exercise of Rights under the Basic Subscription Privilege or pursuant to the Over-Subscription
Privilege, then the Standby Purchaser hereby agrees to purchase from the Company (the “Commitment”), and the Company
hereby agrees to sell to the Standby Purchaser, at the Subscription Price, that number of shares of Common Stock set forth on the
signature page hereto (the “Commitment Shares”).

 

     

     

    

 

(b)          Confirmation
of Commitment. Upon acceptance of the Commitment by the Company, the Standby Purchaser’s Commitment pursuant to this
Agreement (i) will be binding upon the Standby Purchaser and its successors, legal representatives and assigns and (ii) may not
be canceled, modified, terminated or revoked by the Standby Purchaser for any reason, except as set forth in Sections 9
and 10(g).

 

(c)          Allocation
of Unsubscribed Shares. Promptly following the expiration of the Rights Offering, the Company will determine the amount of
Unsubscribed Shares. The Company shall allocate the Unsubscribed Shares among the Investors on a pro rata basis based on each Investor’s
Commitment Shares in the Standby Offering. Upon the Company’s allocation of the Unsubscribed Shares to the Investors, the
Company will promptly notify the Standby Purchaser in writing of the number of Unsubscribed Shares allocated to the Standby Purchaser
(the “Allocated Shares”), which number may be less than the number of Commitment Shares. Notwithstanding anything to
the contrary contained herein, the Company may, in its sole discretion and at any time prior to the Closing, reduce the number
of Allocated Shares to the extent necessary to ensure that, after giving effect to the Rights Offering and the issuance of all
shares of Common Stock offered in the Standby Offering, the Standby Purchaser will not beneficially own capital securities of the
Company which entitle the Standby Purchaser to cast more than 9.9% of the aggregate number of votes which may be cast by all holders
of the Company’s outstanding capital securities on matters submitted to such holders for a vote (the “Voting Limitation”).
The Company will promptly notify the Standby Purchaser in writing of any reduction in the Allocated Shares based on the Voting
Limitation.

 

(d)          Closing.
On the basis of the representations and warranties and subject to the terms and conditions herein set forth, the closing of the
purchase and sale of the Allocated Shares (the “Closing”) shall take place remotely via the electronic exchange of
signature pages on the same date as, and immediately following, the closing of the Rights Offering or such other place or time
or date after the closing of the Rights Offering as may be determined by the Company and the Standby Purchaser (the “Closing
Date”).

 

(e)          Payment.
Payment for Allocated Shares shall be made to the Company by the Standby Purchaser, on the Closing Date, against delivery of the
Allocated Shares, in United States dollars by means of certified or cashier’s checks, bank drafts, money orders or wire transfers.

 

2.            Representations
and Warranties of the Company. The Company represents and warrants to the Standby Purchaser as follows:

 

(a)          The
Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Maryland and has
all requisite corporate power and authority to carry on its business as now conducted. The Company is a registered bank holding
company under the Bank Holding Company Act of 1956, as amended, and First United Bank & Trust is its sole insured depository
institution subsidiary.

 

    	 	-2-	 

     

    

 

(b)          This
Agreement has been duly and validly authorized, executed and delivered by the Company and constitutes a binding obligation of the
Company enforceable against it in accordance with its terms, except as enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application relating to or affecting enforcement of creditors’
rights and the exercise of judicial discretion in accordance with general principles of equity.

 

(c)          Prior
to Closing, the registration statement in respect of the Rights Offering (the “Registration Statement”) that the Company
files with the Securities and Exchange Commission (the “SEC”) will have been declared effective by the SEC and no stop
order will have been issued with respect thereto and no proceedings therefore will have been initiated or, to the knowledge of
the Company, threatened by the SEC, and any request on the part of the SEC for additional information will have been complied with.
On its effective date, the Registration Statement will comply in all material respects with the requirements of the Securities
Act of 1933, as amended (the “Securities Act”), and will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the statements therein not misleading. On the Closing
Date, the Registration Statement and the prospectus contained therein (the “Prospectus”) will not include an untrue
statement of a material fact nor omit to state a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading; provided, however,
that the representations and warranties in this subsection shall not apply to statements in or omissions from the Registration
Statement or the Prospectus made in reliance upon and in conformity with the information furnished to the Company in writing by
the Standby Purchaser expressly for use in the Registration Statement or in the Prospectus pursuant to Section 5(c) below.

 

(d)          As
of the date hereof, the authorized capital of the Company consists of 27,000,000 shares of capital stock, consisting of (i) 25,000,000
shares of Common Stock and (ii) 2,000,000 shares of preferred stock, having no par value. As of the date hereof, (x) 6,269,004
shares of Common Stock are issued and outstanding and (y) 20,000 shares of preferred stock, all of which are designated as Fixed
Rate Cumulative Perpetual Preferred Stock, Series A, are issued and outstanding. As of the date hereof, 60,168 shares of Common
Stock are reserved for issuance upon exercise or vesting of options and other awards granted under the Company’s equity compensation
plans. All of the outstanding capital securities have been duly authorized, are validly issued, fully paid and nonassessable and
were offered, sold and issued in compliance with all applicable federal and state securities laws without violating any contractual
obligation or other preemptive or similar rights.

 

(e)          All
of the New Shares will have been duly authorized for issuance prior to the Closing, and, when issued and distributed as set forth
in the Prospectus, will be validly issued, fully paid and non-assessable; and none of the New Shares will have been issued in violation
of the preemptive rights of any security holders of the Company arising as a matter of law or under or pursuant to the Company’s
Articles of Incorporation (as amended and restated through the Closing Date), Bylaws (as amended and restated through the Closing
Date), or any material agreement or instrument to which the Company is a party or by which it is bound.

 

    	 	-3-	 

     

    

 

(f)          Neither
the Company nor any Subsidiary is in violation of its charter documents, bylaws or other governing instruments (“Governing
Instruments”) or in default under any agreement, indenture or instrument to which the Company or any Subsidiary is a party,
the effect of which violation or default could reasonably be expected to have a Material Adverse Effect on the Company (as defined
below), and the execution, delivery and performance of this Agreement by the Company and the consummation of the transactions contemplated
hereby will not conflict with, or constitute a breach of, or default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any of the assets of the Company or any Subsidiary pursuant to the terms of any agreement, indenture
or instrument to which the Company or any Subsidiary is a party which lien, charge or encumbrance could reasonably be expected
to have a Material Adverse Effect on the Company, or result in a violation of the Governing Instruments of the Company or any Subsidiary
or any order, rule or regulation of any court or governmental agency having jurisdiction over the Company, any Subsidiary or any
of their property; and, except as required by the Securities Act, the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and applicable state securities law, no consent, authorization or order of, or filing or registration with, any court
or governmental agency is required for the execution, delivery and performance of this Agreement. For purposes of this Agreement,
(i) the term “Subsidiary” means First United Bank & Trust and any other direct or indirect subsidiary of the Company;
and (ii) the term “Material Adverse Effect on the Company” shall mean a material adverse effect on the financial condition,
or on the earnings, financial position, shareholders’ equity, operations, assets, results of operations, regulatory compliance
or business of the Company and its Subsidiaries taken as a whole; provided that the term shall exclude (A) any change that
results or arises from changes in any foreign, federal, state or local laws, ordinances, rules, regulations, codes or administrative
directives, including, without limitation, the NASDAQ Stock Market Rules (collectively, “Laws”), applicable to the
Company or interpretations thereof by any courts or governmental authorities having jurisdiction over the Company; (B) any change
in generally accepted accounting principles in the United States, as in effect on the date thereof, applied on a basis consistent
with prior periods, (C) any change that results or arises from changes affecting general business or economic conditions affecting
the industry in which the Company competes, (D) actions and omissions of the Company taken with the prior written consent
of the Standby Purchaser, (E) any change or effect resulting from compliance with this Agreement, and (F) any natural disaster
or any acts of terrorism, sabotage, military action or war (whether or not declared) or any escalation or worsening thereof, in
each case except to the extent such event has or would have a disproportionate effect on the business of the Company.

 

(g)          The
Company and the Subsidiaries have taken all actions necessary to ensure that the transactions contemplated by this Agreement, individually
or in the aggregate, shall not give rise to a change in control under, or result in the breach or the violation of, or the acceleration
of any right under, or result in any additional rights, or the triggering of any rights of first refusal, preferential purchase
or similar rights with respect to any securities of the Company, anti-dilution adjustment under any contract or agreement to which
the Company or any Subsidiary is a party, including, without limitation, any employment agreement or employee benefit plan of the
Company or any Subsidiary. Such actions may include, without limitation, having any such contracts or agreements or rights granted
under any such contract or agreement waived in writing or amended prior to Closing.

 

    	 	-4-	 

     

    

 

(h)          The
Company’s Board of Directors has approved this Agreement and the transactions contemplated by this Agreement to the extent
required by applicable Laws, and such Laws do not require that the Company’s stockholders approve the Agreement or the transactions
contemplated by the Agreement.

 

(i)          The
Company’s Board of Directors has adopted resolutions providing that (i) the Standby Purchaser shall not be an “interested
stockholder” with respect to any “business combination” as defined in Subtitle 6 of Title 3 of the Maryland General
Corporation Law by virtue of its purchase of the Allocated Shares pursuant hereto, and (ii) the
Maryland Control Share Acquisition Act shall not apply to any of the Allocated Shares to the fullest extent permitted by Maryland
law.

 

(j)          Since
January 1, 2015, the Company has filed with the Commission all forms, reports, schedules, statements and other documents required
to be filed by it through the date hereof under the Exchange Act or the Securities Act (all such documents, as supplemented and
amended since the time of filing, collectively, the “Company SEC Documents”). The Company SEC Documents, including
without limitation all financial statements and schedules included in the Company SEC Documents, at the time filed (and, in the
case of registration statements and proxy statements, on the dates of effectiveness and the dates of mailing, respectively, and
in the case of any Company SEC Document amended or superseded by a filing prior to the date of this Agreement, then on the date
of such amending or superseding filing), (i) did not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, and (ii) complied in all material respects with the applicable requirements of the Exchange
Act and the Securities Act, as applicable. The audited consolidated financial statements of Company included in the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2015 comply as to form in all material respects with applicable
accounting requirements and with the published rules and regulations of the Commission with respect thereto, were prepared in accordance
with United States generally accepted accounting principles applied on a consistent basis during the periods involved, and present
fairly in all material respects, the consolidated financial position of the Company and its consolidated subsidiaries as at the
dates thereof and the consolidated results of their operations and cash flows for the periods then ended.

 

(k)          The
Company is in material compliance with all provisions of the Sarbanes-Oxley Act of 2002 (including the rules and regulations of
the Commission adopted thereunder) which are applicable to it as of the date of this Agreement. The Company’s certifying
officers have evaluated the effectiveness of the Company’s controls and procedures as of the date prior to the filing date
of the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented
in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness
of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there
have been no significant changes in the Company’s disclosure controls and procedures (as such term is defined in Rule 13a-14(c)
and Rule 15d-14(c) under the Exchange Act), in the Company’s internal control over financial reporting (as defined in Rule
13a-15(f) or Rule 15d-15(f) under the Exchange Act) or, to the Company’s knowledge, in other factors that could significantly
affect the Company’s disclosure controls and procedures or internal control over financial reporting.

 

    	 	-5-	 

     

    

 

(l)          Since
December 31, 2015, there have not been any events, changes, occurrences or state of facts that, individually or in the aggregate,
have had or would reasonably be expected to have a Material Adverse Effect.

 

3.            Representations
and Warranties of the Standby Purchaser. The Standby Purchaser represents and warrants to the Company as follows:

 

(a)          If
an entity, the Standby Purchaser is duly organized, validly existing and in good standing under the laws of the jurisdiction of
its incorporation or organization as set forth below such Investor’s name on the signature page hereof with the requisite
power and authority to purchase the Commitment Shares to be purchased by it hereunder and to execute and deliver this Agreement.
The information with respect to the Standby Purchaser set forth on the signature page hereto is true, complete and accurate in
all material respects.

 

(b)          Assuming
the due authorization, execution and delivery thereof by the Company, this Agreement constitutes the Standby Purchaser’s
valid and legally binding obligation, enforceable against the Standby Purchaser in accordance with its terms except as enforceability
thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application relating
to or affecting enforcement of creditors’ rights and the exercise of judicial discretion in accordance with general principles
of equity.

 

(c)          The
Commitment Shares to be purchased by the Standby Purchaser hereunder will be acquired for the Standby Purchaser’s own account,
not as nominee or agent, and not with a view to the resale or distribution of any part thereof in violation of the Securities Act,
and the Standby Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same
in violation of the Securities Act without prejudice, however, to the Standby Purchaser’s right at all times to sell
or otherwise dispose of all or any part of such Allocated Shares in compliance with applicable federal and state securities laws.
Nothing contained herein shall be deemed a representation or warranty by the Standby Purchaser to hold such Commitment Shares for
any period of time. The Standby Purchaser does not presently have any agreement or understanding, directly or indirectly,
with any Person, and has no present intention of having any such agreement or understanding, to distribute any of the Commitment
Shares in violation of applicable securities laws. The Standby Purchaser is neither (i) a broker-dealer registered under the Exchange
Act or an entity engaged in a business that would require it to be so registered nor (ii) in the business of underwriting securities.
For purposes of this Agreement, the term “Person” means an individual, a corporation, a partnership, an association,
a joint stock company, a limited liability company, a joint venture, a trust, a governmental entity, an unincorporated entity,
or any other legal entity.

 

(d)          The
Standby Purchaser acknowledges that it can bear the economic risk and complete loss of its investment in the Commitment Shares
and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of
the investment contemplated hereby.

 

    	 	-6-	 

     

    

 

(e)          The
Standby Purchaser (i) has received and read this Agreement, (ii) has read such of the Company’s periodic and other reports
and proxy statements filed to date with, and made publicly-available by, the SEC pursuant to the Exchange Act, and the appendices
and exhibits thereto and information incorporated by reference therein, concerning the Company and the Standby Offering as the
Standby Purchaser deemed necessary or appropriate, (iii) has had the opportunity to ask the Company questions regarding the terms
and conditions of the Standby Offering and the Company’s business and plans, (iv) has received answers that the Standby Purchaser
deems to be satisfactory, (v) has discussed with the Company the risks and uncertainties relating to the business and plans of
the Company, (vi) has had the opportunity to obtain, and to review with the Standby Purchaser’s attorneys, accountants and/or
other advisers, any additional information which the representatives of the Company possess or can acquire without unreasonable
effort or expense, (vii) is a sophisticated investor with such knowledge and experience in business and financial matters as will
enable the Standby Purchaser to evaluate the merits and risks of investment in the Company, and (viii) has reviewed the type of
investment that the shares of Common Stock constitutes, has determined that the such shares are a suitable investment for the Standby
Purchaser, and is able to bear the economic risk and lack of liquidity of an investment in such shares. Neither such inquiries
nor any other due diligence investigation conducted by the Standby Purchaser shall modify, limit or otherwise affect such Standby
Purchaser’s right to rely on the Company’s representations and warranties contained in this Agreement. The Standby
Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed on
or made any recommendation or endorsement of the Commitment Shares or the fairness or suitability of the investment in the Commitment
Shares, nor have such authorities passed upon or endorsed the merits of the offering of the Commitment Shares.

 

(f)          The
Standby Purchaser understands that the Commitment Shares are being offered and sold to the Standby Purchaser in reliance upon specific
exemptions from the registration requirements of the Securities Act and state securities laws and that the Company is relying upon
the truth and accuracy of the representations and warranties of the Standby Purchaser set forth in this Section 3 to determine
the availability of such exemptions and the eligibility of the Standby Purchaser to acquire the Commitment Shares.

 

(g)          The
Standby Purchaser understands that the Commitment Shares are characterized as “restricted securities” under the U.S.
federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and
that under such laws and applicable regulations such securities may be resold without registration under the Securities Act only
in certain limited circumstances. Without limiting the scope of the foregoing, the Standby Purchaser acknowledges that the Commitment
Shares have not been and, except as provided in Section 8 hereof, are not being registered under the Securities Act and may not
be transferred or resold without registration under the Securities Act or unless pursuant to an exemption therefrom.

 

    	 	-7-	 

     

    

 

(h)          The
Standby Purchaser is an accredited investor as defined in Rule 501(a) of Regulation D, as amended, under the Securities Act, as
amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

 

(i)          The
Investor Qualification Questionnaire (the “IQQ”) attached as Exhibit A of this Agreement that the Standby Purchaser
has completed, as well as all of the statements, answers and information therein, are true and correct in all material respects
as of the date hereof and will be true and correct in all material respects as of the Closing Date.

 

(j)          The
Standby Purchaser did not learn of the investment in the Commitment Shares as a result of any general solicitation or general advertising.

 

(k)          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, any Subsidiary or the Standby Purchaser for any commission, fee or other compensation pursuant to any agreement,
arrangement or understanding entered into by or on behalf of the Standby Purchaser.

 

(l)          Except
as set forth in Schedule 3(l) attached hereto, no authorization, approval, consent (or non-objection) or license of any
government, governmental instrumentality or court, domestic or foreign (other than under the Securities Act and applicable state
securities laws) or of any other Person is required for the purchase by the Standby Purchaser of the Commitment Shares or for
the consummation by the Standby Purchaser of any other transaction contemplated by this Agreement (the “Consents”).

 

4.            Standby
Purchaser’s Acknowledgements. The Standby Purchaser understands and hereby acknowledges as follows:

 

(a)          Neither
the offer nor the sale of the shares of Common Stock to which the Standby Offering relates has been registered under the Securities
Act or any state securities laws, and such shares are being offered and sold in reliance upon federal and state exemptions from
registration requirements for transactions not involving any public offering. The Standby Purchaser recognizes that reliance upon
such exemptions is based in part upon the representations of the Standby Purchaser contained in this Agreement and the IQQ.

 

(b)          No
United States federal or state agency has made any finding or determination as to the fairness of the Standby Offering, or any
recommendation or endorsement of the Commitment Shares.

 

(c)          Upon
the original issuance of the Allocated Shares and until such time as the same is no longer required under any applicable requirements
of the Securities Act or applicable state securities laws, the Company and its transfer agent shall make such notation on the certificate
or certificates evidencing the Allocated Shares purchased by the Standby Purchaser and in the stock book and transfer records of
the Company as may be necessary to record that such Allocated Shares have not been registered under the Securities Act and that
such shares may not be resold without registration under the Securities Act or any applicable state securities laws or pursuant
to an exemption from the registration requirements thereof. Without limiting the generality of the foregoing, any certificate evidencing
the Allocated Shares shall bear the following legend:

 

 

    	 	-8-	 

     

    

 

“THE SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THESE SECURITIES MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.”

 

5.            Covenants.

 

(a)          Covenants
of the Company. The Company agrees and covenants with the Standby Purchaser, between the date hereof and the earlier of the
Closing Date or the effective date of any termination pursuant to Section 9 hereof, as follows:

 

(i)          To
use commercially reasonable efforts to effectuate the Rights Offering;

 

(ii)         As
soon as reasonably practicable after the Company is advised or obtains knowledge thereof, to advise the Standby Purchaser with
a confirmation in writing, of (A) the time when the Prospectus or any amendment or supplement thereto has been filed with the SEC,
(B) the issuance by the SEC of any stop order, or of the initiation or threatening of any proceeding, suspending the effectiveness
of the Registration Statement or any amendment thereto or any order preventing or suspending the use of any preliminary prospectus
or the Prospectus or any amendment or supplement thereto, (C) the issuance by any state securities commission of any notice of
any proceedings for the suspension of the qualification of the shares of Common Stock for offering or sale in any jurisdiction
or of the initiation, or the threatening, of any proceeding for such purpose, (D) the receipt of any comments from the SEC directed
toward the Registration Statement or any document incorporated therein by reference, and (E) any request by the SEC for any amendment
to the Registration Statement or any amendment or supplement to the Prospectus or for additional information. The Company will
use its commercially reasonable efforts to prevent the issuance of any such order or the imposition of any such suspension and,
if any such order is issued or suspension is imposed, to obtain the withdrawal thereof as promptly as possible;

 

(iii)        To
operate the Company’s business in the ordinary course of business consistent with past practice;

 

(iv)        To
notify the Standby Purchaser, on a weekly basis or at such time as the Standby Purchaser may reasonably request, of the aggregate
number of subscriptions received pursuant to the Basic Subscription Privilege and the Over-Subscription Privilege in the Rights
Offering;

 

    	 	-9-	 

     

    

 

(v)         As
soon as reasonably practicable after the Closing, notify the Company’s transfer agent of the Standby Purchaser’s purchase
of the Allocated Shares and cause such transfer agent to issue confirmation of the issuance of such shares, to be held in book-entry
form, to the Standby Purchaser;

 

(vi)        Except
in connection with the Rights Offering, not to issue any shares of capital stock of the Company, or options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights, securities convertible into or exchangeable for capital stock
of the Company, or other agreements or rights to purchase or otherwise acquire capital stock of the Company, except for shares
of Common Stock issuable upon exercise or vesting of awards granted under the Company’s equity compensation plans that are
outstanding as of the date hereof;

 

(vii)       Not
to authorize any stock split, stock dividend, stock combination or similar transaction affecting the number of issued and outstanding
shares of Common Stock;

 

(viii)      Not
to declare or pay any dividends on its Common Stock or repurchase any shares of Common Stock; and

 

(ix)         Not
to incur any indebtedness or guarantees thereof other than in the ordinary course of business and consistent with past practice.

 

(b)          Certain
Acquisitions. Between the date hereof and the Closing Date, neither the Standby Purchaser nor any Affiliate (as defined below)
of the Standby Purchaser shall acquire any capital securities of the Company or any Subsidiary (as defined below) of the Company
unless authorized to do so by the Company. For purposes of this Agreement, the term “Affiliate” means, with respect
to a specified Person, any Person who directly, or indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, the Person specified.

 

(c)          Information.
The Standby Purchaser agrees to furnish to the Company all information with respect to the Standby Purchaser that the Company may
reasonably request and any such information furnished to the Company expressly for inclusion in the Prospectus by the Standby Purchaser
shall not contain any untrue statement of material fact or omit to state a material fact required to be stated in the Prospectus
or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

(d)          Public
Statements. Neither the Company nor the Standby Purchaser shall issue any public announcement, statement or other disclosure
with respect to this Agreement or the transactions contemplated hereby without the prior consent of the other Party, which consent
shall not be unreasonably withheld or delayed, except (i) if such public announcement, statement or other disclosure is required
by Laws, in which case the disclosing party shall consult in advance with respect to such disclosure with the other Party to the
extent reasonably practicable, or (ii) with respect to the filing by the Standby Purchaser of any Schedule 13D or Schedule 13G
with the SEC, to which a copy of this Agreement may be attached as an exhibit thereto.

 

    	 	-10-	 

     

    

 

(e)          Regulatory
Filing. If a federal, state or other regulatory filing is required under applicable Laws in connection with the transactions
contemplated hereunder, including, without limitation, under the Change in Bank Control Act, 12 U.S.C. § 1871(j), or the Bank
Holding Company Act, 12 U.S.C. §§ 1841 et seq., then the Company and the Standby Purchaser shall use commercially
reasonable efforts to promptly prepare and file all necessary documentation and to effect all applications that are necessary or
advisable under applicable Laws with respect to the transactions contemplated hereunder so that any applicable waiting period shall
have expired or been terminated as soon as practicable after the date hereof.

 

(f)          NASDAQ
Listing Application. The Company will timely file an “Additional Listing Application” with the NASDAQ Global Select
Market with respect to the New Shares. The Company will use its best efforts to obtain, effect and maintain the listing of such
securities on the NASDAQ Global Select Market and will file with the NASDAQ Global Select Market all documents and notices required
by The NASDAQ Global Select Market of companies with securities that are listed on the NASDAQ Global Select Market.

 

(g)          Indemnification
by the Company. Whether or not the transactions contemplated hereby are consummated, the Company shall at all times defend,
indemnify and hold harmless the Standby Purchaser and each of its Affiliates, advisors, agents, attorneys, accountants and consultants
(each, a “Purchaser Indemnified Person”) from and against all demands, suits, claims, actions or causes of action,
assessments, losses, damages, liabilities, costs, judgments and expenses, including, without limitation, interest, penalties, reasonable
attorneys’ fees, disbursements and expenses, and reasonable consultants’ fees, disbursements and expenses (each, a
“Loss” and collectively, “Losses”), imposed on, asserted against or incurred by any such Purchaser Indemnified
Person, based upon, arising out of, or resulting from, directly or indirectly, this Agreement, the matters referred to herein,
the Commitment, the use of proceeds received from the Standby Purchaser hereunder or any related transaction, or any claim, litigation,
investigation or proceeding relating to any of the foregoing regardless of whether such Purchaser Indemnified Person is a party
thereto; provided, however, that the foregoing indemnity will not, as to any Purchaser Indemnified Person, apply
to Losses to the extent they have resulted from (i) the inaccuracy or untruth of any representation or warranty made by the Standby
Purchaser in this Agreement or in any exhibit to this Agreement or in any certificate, document or instrument executed and delivered
by the Standby Purchaser in connection with this Agreement, (ii) the breach by the Standby Purchaser of any of its agreements or
covenants made in this Agreement or in any exhibit to this Agreement or the failure by the Standby Purchaser to perform, observe
or comply with any of its covenants or agreements contained in this Agreement or in any certificate, document or instrument executed
and delivered by the Standby Purchaser in connection with this Agreement, (iii) the bad faith, willful misconduct or gross negligence
of such Purchaser Indemnified Person, (iv) (A) any untrue or alleged untrue statement of a material fact contained in the Prospectus,
the Resale Registration Statement and/or any related marketing materials or (B) any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein not misleading, to the extent in either case, but
only to the extent, that such untrue or alleged untrue statement or omission or alleged omission is based upon and is consistent
with information so furnished in writing by or on behalf of the Standby Purchaser to the Company expressly for use in the Prospectus,
the Resale Registration Statement and/or any related marketing materials, or (iv) any action, suit, proceeding, investigation,
assessment or judgment incident to any of the matters addressed in the foregoing items (i) through (iv).

 

    	 	-11-	 

     

    

 

(h)          Indemnification
by the Standby Purchaser. Whether or not the transactions contemplated hereby are consummated, the Standby Purchaser shall
at all times defend, indemnify and hold harmless the Company and its control Persons, and their respective Affiliates and anyone
acting on their behalf (each, a “Company Indemnified Person”), from and against all Losses imposed on, asserted against
or incurred by any such Company Indemnified Person, based upon, arising out of, or resulting from, directly or indirectly, (i)
the inaccuracy or untruth of any representation or warranty made by the Standby Purchaser in this Agreement or the IQQ or in any
certificate, document or instrument executed and delivered by the Standby Purchaser in connection with this Agreement, or (ii)
(A) any untrue or alleged untrue statement of a material fact contained in the Prospectus, the Resale Registration Statement and/or
any related marketing materials or (B) any omission or alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, to the extent in either case, but only to the extent, that such untrue or alleged
untrue statement or omission or alleged omission is based upon and is consistent with information so furnished in writing by or
on behalf of the Standby Purchaser to the Company expressly for use in the Prospectus, the Resale Registration Statement and any
related marketing materials.

 

(i)          Use
of Proceeds. The Company shall use the proceeds of the Rights Offering solely in accordance with the description of the use
of proceeds set forth in the Registration Statement.

 

6.            Conditions
to Closing.

 

(a)          Conditions
to Standby Purchaser’s Obligations. The obligations of the Standby Purchaser to consummate the transactions contemplated
hereunder are subject to the fulfillment, prior to or on the Closing Date, of the following conditions unless such fulfillment
has been waived in writing by the Standby Purchaser:

 

(i)          The
representations and warranties of the Company in Section 2 hereof shall be true and correct in all material respects as
of the date hereof and at and as of the Closing Date as if made on such date (except for representations and warranties made as
of a specified date, which shall be true and correct in all material respects as of such specified date) and the Company shall
have performed all of its obligations hereunder;

 

(ii)         The
Company shall have received all Consents, on conditions reasonably satisfactory to the Company, for the Rights Offering and the
other transactions contemplated by this Agreement;

 

(iii)        The
Standby Purchaser shall have received all Consents, on conditions reasonably satisfactory to the Standby Purchaser, for the Standby
Purchaser’s purchase of the Allocated Shares pursuant to this Agreement;

 

    	 	-12-	 

     

    

 

(iv)        No
judgment, injunction, decree, regulatory proceeding or other legal restraint shall prohibit, or have the effect of rendering unachievable,
the consummation of the Rights Offering or the material transactions contemplated by this Agreement;

 

(v)         No
stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding
for that purpose shall have been initiated or threatened by the SEC; and any request of the SEC for inclusion of additional information
in the Registration Statement or otherwise shall have been complied with;

 

(vi)        The
New Shares shall have been authorized for listing on the NASDAQ Global Select Market (or any such other exchange or market as the
shares of Common Stock are then listed);

 

(vii)       As
of the Closing Date, trading in the Common Stock shall not have been suspended by the SEC or trading in securities generally on
The NASDAQ Global Select Market shall not have been suspended (a “Market Adverse Effect”); and

 

(viii)      At
or prior to the Closing, the Company shall have received a letter from an independent accounting firm stating that (A) the issuance
of the Common Stock pursuant to the transactions contemplated by this Agreement will not cause the Company to undergo an “ownership
change” for purposes of Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), (B) the issuance
of the Common Stock pursuant to the transactions contemplated by this Agreement will not cause the Company to be limited by Section
382 of the Code in its ability to use its net operating loss carryforwards, (C) there will be no adverse tax or accounting consequences
of the issuance of the Common Stock pursuant to the transactions contemplated by this Agreement, and (D) the structure of the transaction
will preserve the Company’s deferred tax asset, subject to any valuation allowance (the “DTA Letter”).

 

(b)          Conditions
to Company’s Obligations. The obligations of the Company to consummate the transactions contemplated hereunder are subject
to the fulfillment, prior to or on the Closing Date, of the following conditions unless such fulfillment has been waived in writing
by the Company:

 

(i)          The
representations and warranties of the Standby Purchaser in Section 3 hereof shall be true and correct in all material respects
as of the date hereof and at and as of the Closing Date as if made on such date (except for representations and warranties made
as of a specified date, which shall be true and correct in all material respects as of such specified date) and the Standby Purchaser
shall have performed all of its obligations hereunder;

 

(ii)         The
Rights Offering shall have been consummated;

 

(iii)        The
Company shall have received all Consents, on conditions reasonably satisfactory to the Company, for the Rights Offering and the
other transactions contemplated by this Agreement;

 

    	 	-13-	 

     

    

 

(iv)        The
Standby Purchaser shall have received all Consents, on conditions reasonably satisfactory to the Standby Purchaser, for the Standby
Purchaser’s purchase of the Allocated Shares pursuant to this Agreement;

 

(v)         No
judgment, injunction, decree, regulatory proceeding or other legal restraint shall prohibit, or have the effect of rendering unachievable,
the consummation of the Rights Offering or the material transactions contemplated by this Agreement; and

 

(vi)        No
stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding
for that purpose shall have been initiated or threatened by the SEC; and any request of the SEC for inclusion of additional information
in the Registration Statement or otherwise shall have been complied with;

 

(vii)       The
New Shares shall have been authorized for listing on the NASDAQ Global Select Market (or any such other exchange or market as the
shares of Common Stock are then listed); and

 

(viii)      At
or prior to the Closing, the Company shall have received the DTA Letter.

 

7.            Deliveries
at Closing.

 

(a)          By
the Company. At the Closing, the Company shall deliver, or cause to be delivered, to the Standby Purchaser a legal opinion
from Gordon Feinblatt LLC, counsel to the Company, to the effect that this Agreement has been duly authorized, executed and delivered
by the Company and that the Allocated Shares will be, when payment therefor has been received by the Company pursuant to this Agreement,
validly issued, fully paid and non-assessable.

 

(b)          By
the Standby Purchaser. At the Closing, the Standby Purchaser shall deliver, or cause to be delivered, to the Company the following
payment in an amount equal to the Subscription Price multiplied by the number of Allocated Shares to be purchased by the Standby
Purchaser pursuant to this Agreement.

 

8.            Resale
Registration.

 

(a)          Subject
to Section 1 hereof, the Company will (a) file, within 90 days of the Closing and at no cost to the Standby Purchaser, a
registration statement under the Securities Act to register all of the Allocated Shares sold to the Standby Purchaser in the Standby
Offering for resale by the Standby Purchaser (the “Resale Registration Statement”), (b) use its best efforts to cause
the Resale Registration Statement to be declared effective by the SEC, and (c) upon such declaration of effectiveness, maintain
a current prospectus relating to such Allocated Shares; provided, however, that the Company’s obligations under
this Section shall cease with respect to an Allocated Share upon the earlier to occur of (i) the sale of such Allocated
Share pursuant to a registration statement filed under the Securities Act, including, without limitation, the Resale Registration
Statement, or pursuant to Rule 144 promulgated under the Securities Act (“Rule 144”), (ii) when the Standby Purchaser
is permitted to sell such Allocated Share without restriction pursuant to Rule 144, and (iii) when such Allocated Share is resold
to the Company for cash or otherwise ceases to be issued and outstanding. If for any reason the Company does not file the Resale
Registration Statement in accordance with this Section 8(a), then the Company shall enter into a registration rights agreement
with the Standby Purchaser, which shall include reasonable and customary terms pursuant to which the Company agrees to register,
under the Securities Act and applicable state securities laws and regulations, the Standby Purchaser’s resale of any of its
Allocated Shares, at no cost to the Standby Purchaser (the “Registration Rights Agreement”).

 

    	 	-14-	 

     

    

 

(b)          The
Company may require the Standby Purchaser to furnish such information regarding the Standby Purchaser and its intended method of
disposition of the Allocated Shares as it may from time to time reasonably request in writing. If any such information is not furnished
within a reasonable period of time after receipt of such request, then the Company may exclude the Allocated Shares from the Resale
Registration Statement. Notwithstanding the foregoing, in no event shall the Standby Purchaser be required to provide any information
about its investors unless required by the SEC to do so.

 

9.            Termination.

 

(a)          By
the Standby Purchaser. The Standby Purchaser may terminate this Agreement at any time prior to the Closing Date, by written
notice to the Company, if (i) a Material Adverse Effect on the Company has occurred, (ii) a Market Adverse Effect has occurred
that, in either case, is not cured within 21 days after the occurrence thereof (the “Cure Period”); provided
that the right to terminate this Agreement after the occurrence of each Material Adverse Effect on the Company or a Market Adverse
Effect shall expire seven (7) days after the expiration of the Cure Period applicable thereto.

 

(b)          By
the Company. The Company may terminate this Agreement at any time prior to the Closing Date if the Company withdraws or terminates
the Rights Offering because it determines that the consummation of the Rights Offering is not in the best interests of the Company
and its stockholders.

 

(c)          By
the Parties in Certain Other Events. This Agreement may be terminated by the Company, on one hand, or by the Standby Purchaser,
on the other hand, by written notice to the other Party:

 

(i)          At
any time prior to the Closing Date if there is a material breach of this Agreement by the other Party that is not cured within
15 days after the non-breaching Party has delivered written notice to the breaching Party of such breach;

 

(ii)         At
any time after May 15, 2017 unless the Closing has occurred prior to such date; or

 

(iii)        Consummation
of the transactions contemplated by this Agreement is prohibited by applicable Laws.

 

    	 	-15-	 

     

    

 

(d)          Effect
of Termination. The Company and the Standby Purchaser agree that any termination of this Agreement pursuant to Sections
9(a), 9(b), 9(c)(ii) or 9(c)(iii) shall be without liability of the Company or the Standby Purchaser, except
that should the Company terminate this Agreement pursuant to Section 9(b), the Company will reimburse the Standby Purchaser
for its expenses reasonably incurred in connection with its negotiation and performance of this Agreement in an amount not to exceed
$25,0000. Such payment shall be made within five (5) Business Days of such termination. For purposes of this Agreement, the term
“Business Day” means any day that is not a Saturday, a Sunday or a day on which banks are generally closed in the State
of Maryland.

 

10.           Miscellaneous.

 

(a)          Survival.
The representations and warranties of the Company and the Standby Purchaser contained in this Agreement, in any exhibit hereto,
or in any certificate delivered hereunder, and the covenants contained in Sections 5(d), 5(g), 5(h) and 5(i) shall survive
the Closing hereunder.

 

(b)          Assignment;
No Third-Party Beneficiaries. This Agreement may not be assigned by the Standby Purchaser without the prior written consent
of the Company. This Agreement will be binding upon, and will inure to the benefit of and be enforceable by, the Company and its
successors and assigns and the Standby Purchaser and its permitted successors and assigns. Notwithstanding any provision of this
Agreement to the contrary, no Person other than the Company or the Standby Purchaser shall be entitled to rely on or have the benefit
of, as a third-party beneficiary or under any other theory, any of the representations, warranties, agreements, covenants or other
provisions of this Agreement except as set forth in Section 5(g).

 

(c)          Counterparts;
Facsimile. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. The exchange of copies of this Agreement and of signature pages by
facsimile or PDF transmission shall constitute effective execution and delivery of this Agreement as to the Parties and may be
used in lieu of an original of this Agreement for all purposes. Signatures of the Parties transmitted by facsimile or PDF transmission
shall be deemed to be their original signatures for all purposes.

 

(d)          Titles
and Subtitles; Construction. The titles and subtitles used in this Agreement are used for convenience only. They form no part
of this Agreement and shall not affect its construction or interpretation. Except where expressly indicated otherwise, all references
to Sections, subsections, paragraphs, clauses or other subdivisions in this Agreement refer to the corresponding Sections, subsections,
paragraphs, clauses or other subdivisions of this Agreement. All words used in this Agreement shall be construed to be of such
gender or number as the circumstances require. As used in this Agreement, the words “hereby”, “herein”,
hereof”, “hereunder” and words of similar import refer to this Agreement as a whole and not to any particular
provision of this Agreement.

 

    	 	-16-	 

     

    

 

(e)          Notices.
All notices to a Party required or permitted by this Agreement shall be in writing and signed by the Party giving or delivering
same, shall specify the Section of this Agreement pursuant to which it is given or being delivered, and shall be hand-delivered,
transmitted by United States certified mail, return receipt requested, postage prepaid, transmitted by facsimile or electronic
mail (with delivery confirmation), or delivered, prepaid, via nationally recognized overnight carrier to such Party at its address
set forth below:

 

If to the Company, to:

 

First United Corporation

19 South Second Street

Oakland, MD 21550

Attention: Carissa L. Rodeheaver

Email: crodeheaver@mybank.com

 

If to the Standby Purchaser, to the address
provided on the signature page hereto.

 

Each such notice shall be deemed to have been
given or delivered (i) on the date delivered if delivered in person, (ii) on the third (3rd) Business Day after it is
transmitted if transmitted by United States certified mail, (iii) on the day after it is delivered to a nationally recognized overnight
carrier that confirms to the sender delivery on such day, or (iv) if given by facsimile or electronic mail, the date on which the
facsimile or electronic mail is transmitted if confirmed by transmission report during the transmitter’s normal business
hours, or at the beginning of the next Business Day after transmission if confirmed at any time other than the transmitter’s
normal business hours. A Party shall have the right to change its address set forth above by giving notice of such change in accordance
with this Section 10(e).

 

(f)          Expenses.
Except as provided Section 9(d) hereof, the Parties shall pay their own costs and expenses in connection herewith. In the
event that legal proceedings are commenced by a Party against the other Party in connection with this Agreement or the Registration
Rights Agreement, or the transactions contemplated hereby or thereby, the Party that does not prevail in such proceedings shall
pay the reasonable attorneys’ fees and other reasonable out-of-pocket costs and expenses incurred by the prevailing Party.

 

(g)          Amendments
and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively), only by a writing signed by both Parties. Any
amendment or waiver effected in accordance with this Section 10(g) shall be binding upon each holder of any shares of Common
Stock purchased under this Agreement at the time outstanding, each future holder of all such shares, and the Company.

 

(h)          Severability.
Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof but shall be interpreted
as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the Parties hereby waive any provision of law which renders any provision hereof prohibited or unenforceable
in any respect.

 

    	 	-17-	 

     

    

 

(i)          Entire
Agreement. This Agreement, including the Exhibits and any disclosure schedules hereto, and, if entered into, the Registration
Rights Agreement constitute the entire agreement among the Parties hereto with respect to the subject matter hereof and thereof
and supersede all prior agreements and understandings, both oral and written, among the Parties with respect to the subject matter
hereof and thereof.

 

(j)          Further
Assurances. The Parties shall execute and deliver all such further instruments and documents and take all such other actions
as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements
herein contained.

 

(k)          Independent
Nature of the Standby Purchaser’s Obligations and Rights. The obligations of the Standby Purchaser under this Agreement
are several and not joint with the obligations of any other Investor under any document in connection with the transactions contemplated
by this Agreement (including the Standby Offering) to which any Investor is a party (such documents, together with this Agreement,
the “Transaction Documents”), and the Standby Purchaser shall not be responsible in any way for the performance
of the obligations of any other Investor under any Transaction Document. The decision of the Standby Purchaser to purchase the
Allocated Shares pursuant to this Agreement has been made by the Standby Purchaser independently of any other Investor 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 Investor or by any agent or employee of any other Investor, and neither the Standby Purchaser nor any of
its agents or employees shall have any liability to any other Investor (or any other Person) relating to or arising from any such
information, materials, statements, or opinions. Nothing contained herein or in any Transaction Document, and no action taken by
any Investor pursuant thereto, shall be deemed to constitute the Standby Purchaser and the other Investors as a partnership, an
association, a joint venture, or any other kind of entity, or create a presumption that the Standby Purchaser and the other Investors
are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction
Documents. The Standby Purchaser acknowledges that no other Investor has acted as agent for the Standby Investor in connection
with making its investment hereunder, that the Standby Purchaser has not acted as agent for any other Investor in connection with
such Investor making its Investment under any Transaction Document, that no Investor will be acting as agent of the Standby Purchaser
in connection with monitoring the Standby Purchaser’s investment in the Allocated Shares or enforcing its rights under this
Agreement and that the Standby Purchaser will not be acting as agent of any other Investor in connection with monitoring such other
Investor’s investment in the Unsubscribed Shares or enforcing its rights under any Transaction Document. The Standby Purchaser
shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this
Agreement, and it shall not be necessary for any other Investor 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 the Standby
Purchaser, solely, and not between the Company and the Investors collectively and not between and among the Investors.

 

    	 	-18-	 

     

    

 

(l)          Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of Maryland without regard to the choice of law principles thereof. Each of the Parties irrevocably
submits to the exclusive jurisdiction of the courts of the State of Maryland located in Baltimore County and the United States
District Court for the District of Maryland for the purpose of any suit, action, proceeding or judgment relating to or arising
out of this Agreement and the transactions contemplated hereby. Service of process in connection with any such suit, action or
proceeding may be served on each Party anywhere in the world by the same methods as are specified for the giving of notices under
this Agreement. Each of the Parties irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding
and to the laying of venue in such court. Each Party irrevocably waives any objection to the laying of venue of any such suit,
action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in
any such court has been brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY
JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

 

[SIGNATURES APPEAR ON NEXT PAGE]

 

    	 	-19-	 

     

    

 

[SIGNATURE PAGE]

 

IN WITNESS WHEREOF, the Standby Purchaser has
executed this Agreement on the ____ day of ______________, 20__.

 

FOR COMPLETION BY ALL TYPES OF STANDBY PURCHASERS:

 

Standby Purchaser’s Commitment: ___________ shares of Common
Stock, with an aggregate Subscription Price of $_____________.

 

Standby Purchaser’s Address For Notice:

________________________________________

________________________________________

________________________________________

________________________________________

Facsimile No.: ________________________

E-Mail: ______________________________

Attention:      ________________________

 

FOR COMPLETION BY A STANDBY PURCHASER WHO IS A NATURAL PERSON (i.e.,
an individual):

 

	Standby Purchaser’s Name: 	 
	 	(print or type)

 

	Standby Purchaser’s Signature: 	 

 

FOR COMPLETION BY A STANDBY PURCHASER WHO IS NOT A NATURAL PERSON
(i.e., a corporation, partnership, limited liability company, trust or other entity or association):

 

	Standby Purchaser’s Name: 	 
	 	(print or type)

 

	By: 	 	 
	Name:
	Title:
	(Signer must be authorized representative of the Standby Purchaser)

 

ACCEPTED this ___ day of ______________, 20__:

 

FIRST UNITED CORPORATION

 

	By:	 	 
	Name:	Carissa L. Rodeheaver
	Title:	Chairman, President & CEO

 

    	 	-20-

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