Document:

Exhibit 10.1

 Exhibit 10.1 
  
 TVI CORPORATION 
  
 AMENDED AND RESTATED 1998 INCENTIVE STOCK OPTION PLAN 
  
 Section 1. Purpose of the Plan. 
  
 This stock option plan (the “Plan”) is intended to provide incentives: 
  
 (a) to the officers and other employees of TVI Corporation (the “Company”), or any present or future parent or
subsidiary of the Company (“Affiliate”) by providing them with opportunities to purchase stock in the Company pursuant to options granted hereunder which qualify as “incentive stock options” under Section 422 of the Internal
Revenue Code of 1986, as amended (the “Code”) (“ISO” or “ISOs”); 
  
 (b) to officers, employees, directors, and consultants of the Company and any present or future subsidiaries by providing them with opportunities to purchase stock in the Company pursuant to options granted hereunder
which do not qualify as ISOs (“Non-Qualified Option” or “Non-Qualified Options,” collectively with ISO or ISOs, “Options”); 
  
 (c) to officers, employees, directors, and consultants of the Company and any present or future Affiliates by providing them with either stock bonus
grants and/or restricted stock purchase grants for Company Common Stock (collectively, “Stock Grants”); and 
  
 (d) As used herein, the term “Award” means any Option or Stock Grant hereunder. The terms “parent” and “subsidiary” mean
“parent corporation” and “subsidiary corporation,” respectively, as those terms are defined in Section 424 of the Code and the Treasury Regulations promulgated thereunder (the “Regulations”). 
  
 Section 2. Common Stock Subject to the Plan. 
  
 (a) The total number of shares of the authorized but unissued shares of the
common stock, $.01 par value, of the Company (“Common Stock”) for which Awards may be granted under the Plan shall not exceed ten million (10,000,000) shares, subject to adjustment as provided in Section 13 hereof. 
  
 (b) If an Award granted hereunder shall expire, be cancelled or otherwise
terminate for any reason without having been exercised in full, the un-purchased shares subject thereto shall again be available for subsequent grants under the Plan. 
  
 (c) Common Stock issuable pursuant to an Award granted under the Plan may be subject to such restrictions on transfer,
repurchase rights or other restrictions as shall be determined by the Board of Directors of the Company (the “Board”) (discussed below in Section 3). 
  

Section 3. Administration of the Plan. 
  
 (a) General. The Plan shall be administered by the Board. However, the Board may from time to time appoint a committee to make recommendations
concerning operation of the Plan or the granting of Awards. The Board may hold a special meeting to take actions concerning the Plan, or it may take actions concerning the Plan at a regular meeting. 
  
 (b) Powers of the Board. Subject to the provisions of the Plan, the
Board shall have sole authority, in its absolute discretion: 
  
 (i) determine the employees of the Company and its subsidiaries to whom ISOs may be granted, and to determine to whom Non-Qualified Options may be granted; 

 (ii) determine the time or times at which Awards may be granted; 
  
 (iii) determine the Award price of shares subject to each Award which price
shall not be less than the minimum price specified in Section 6; 
  
 (iv) determine whether each Award granted shall be an ISO, a Non-Qualified Option or a Stock Grant; 
  
 (v) determine (subject to Section 9) the time or times when each Option shall become exercisable and the duration of the exercise period; and 

 
 (vi) determine whether restrictions such as repurchase Awards are to be
imposed on shares subject to Awards and the nature of such restrictions. 
  
 (vii) to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company which are not in conflict with the provisions of the Plan. 
  
 (c) Board Determinations. All determinations, interpretation and
constructions made by the Board in good faith shall not be subject to review by any person and shall be final, binding and conclusive on all persons. 
  
 Section 4. Eligibility. 
  
 (a) Options designated as ISOs may be granted only to employees and others who may eligible under the Code (including officers who are employees) of the
Company or an Affiliate. Non-Qualified Options may be granted to any officer, employee, or consultant of the Company or an Affiliate. 
  
 (b) In determining the eligibility of an individual to be granted an Award, as well as in determining the number of shares to be optioned to any person,
the Board shall take into account the position and responsibilities of the person being considered, the nature and value to the Company or an Affiliate of his or her service and accomplishments, his or her present and potential contribution to the
success of the Company or an Affiliate, and such other factors as the Board may deem relevant. 
  
 (c) No Option designated as an ISO shall be granted to any employee of the Company or an Affiliate if such employee owns, immediately prior to the grant of an Option, stock representing more than 10% of the total
combined voting power of all classes of stock of the Company or an Affiliate, unless the purchase price for the stock under such Option shall be at least 110% of its fair market value at the time such Option is granted and the Option, by its terms,
shall not be exercisable more than five (5) years from the date it is granted. In determining the stock ownership under this paragraph, the provisions of Section 424(d) of the Code shall be controlling. In determining the fair market value under
this paragraph, the provisions of Section 6 hereof shall apply. 
  
 (d) The maximum number of shares of Common Stock with respect to which an Option may be granted to any employee in any taxable year of the Company shall not exceed 1,300,000 shares, taking into account shares subject to options granted and
terminated, or repriced, during such taxable year, subject to adjustment as provided in Section 13 hereof. 
  

 AMENDED AND RESTATED 1998 INCENTIVE
STOCK OPTION PLAN 
  
 2 

 Section 5. Option Agreement. 
  
 (a) Each Option shall be evidenced by an option agreement (the “Option Agreement”) duly executed on behalf of the
Company and by the optionee to whom such Option is granted, which Option Agreement shall comply with and be subject to the terms and conditions of the Plan. 
  
 (b) The Option Agreement may contain such other terms, provisions and conditions which are not inconsistent with the Plan as may be determined by the
Board, provided that Options designated as ISOs shall meet all of the conditions for ISOs as defined in Section 422 of the Code. The date of grant of an Option shall be as determined by the Board. More than one Option may be granted to an
individual. 
  
 Section 6. Option Price. 
  
 (a) Non-Qualified Options. The Option price or prices of shares of
the Company’s Common Stock for Options designated as Non-Qualified Options shall be as determined by the Board, but in no event shall the Option price be less than eighty-five percent (85%) of the fair market value of such Common Stock at the
time the Option is granted as determined by the Board in accordance with the laws of the State of Maryland or the laws of any jurisdiction in which the Company or its successors in interest may be organized. 
  
 (b) ISOs. The Option price or prices of shares of the Company’s
Common Stock for ISOs shall be the fair market value of such Common Stock at the time the Option is granted as determined by the Board in accordance with the Regulations promulgated under Section 422 of the Code as follows: 
  
 (i) If such shares are then listed on any national securities exchange, the
fair market value shall be the mean between the high and low sales prices, if any, on such exchange on the date of the grant of the Option. 
  
 (ii) If the shares are traded on the NASDAQ National Market, the fair market value of such shares shall be the mean between the high and low sales prices,
if any, as reported in the NASDAQ National Market for the date of the grant of the Option. 
  
 (iii) If the shares are not then either listed on any exchange or quoted in the NASDAQ National Market, the fair market value shall be the average of the “Bid” and “Ask” prices, if any, as reported
in the National Daily Quotation Service for the date of the grant of the Option. If no sales occurred on the date of the grant, market value shall be determined by taking a weighted average of the means between the highest and lowest sales prices or
Bid/Ask prices as appropriate on the nearest date before and the nearest date after the date of grant in accordance with Treasury Regulations Section 25.2512-2. 
  

(c) If the fair market value cannot be determined under the preceding methods, it shall be determined in good faith by the Board. 
  
 Section 7. Option Manner of Payment; Option Manner of Exercise. 
  
 (a) Options granted under the Plan may provide for the payment of the
exercise price by delivery of: 
  
 (i) cash or a check payable to
the order of the Company in an amount equal to the exercise price of such Options, 
  

 AMENDED AND RESTATED 1998 INCENTIVE
STOCK OPTION PLAN 
  
 3 

 (ii) shares of Common Stock of the Company owned by the optionee having a fair market value equal in
amount to the exercise price of the Options being exercised, 
  
 (iii) any combination of (i) and (ii), provided, however, that payment of the exercise price by delivery of shares of Common Stock of the Company owned by such optionee may be made only under such circumstances and on such terms as may from
time to time be established by the Board and only if provided for in the Option Agreement. The fair market value of any shares of the Company’s Common Stock which may be delivered upon exercise of an Option shall be determined by the Board in
accordance with Section 6 hereof. Payment may also be made by delivery of a properly executed exercise notice to the Company, together with a copy of irrevocable instructions to a broker to deliver promptly to the Company the amount of sale or loan
proceeds to pay the exercise price if provided for in the Agreement. To facilitate the foregoing, the Company may enter into agreements for coordinated procedures with one or more brokerage firms, 
  
 (iv) in consideration received by the Company under a formal cashless
exercise program maintained with an outside broker adopted by the Board in connection with the Plan, or 
  
 (v) by any other means approved by the Board. 
  
 (b) To the extent that the right to purchase shares under an Option has accrued and is in effect, Options may be exercised in full at one time or in part
from time to time, by giving written notice, signed by the person or persons exercising the Option, to the Company, stating the number of shares with respect to which the Option is being exercised, accompanied by payment in full for such shares as
provided in subparagraph (a) above. Upon such exercise, delivery of a certificate for paid-up non-assessable shares shall be made at the principal office of the Company to the person or persons exercising the Option at such time, during ordinary
business hours, after ten business days from the date of receipt of the notice by the Company, as shall be designated in such notice, or at such time, place and manner as may be agreed upon by the Company and the person or persons exercising the
Option. 
  
 Section 8. Exercise of Options. 
  
 Subject to the provisions of Sections 9 through 11 and 13, each Option
granted under the Plan shall be exercisable as follows: 
  
 (a)
Vesting. The Option shall either be fully exercisable on the date of grant or shall become exercisable thereafter in such installments as the Board may specify; 
  
 (b) Full Vesting of Installments. Once an installment becomes exercisable it shall remain exercisable until
expiration of the Option, unless otherwise specified by the Board; 
  
 (c) Partial Exercise. Each Option or installment may be exercised at any time or from time to time, in whole or in part, for up to the total number of shares with respect to which it is then exercisable; and 
  
 (d) Acceleration of Vesting. The Board shall have the right to
accelerate the date of exercise of any installment of any Option; provided that the Board shall not, without the consent of an optionee, accelerate the exercise date of any installment of any Option granted to any employee as an ISO if such
acceleration would violate the annual vesting limitation contained in Section 422(d) of the Code. The Board, in its sole discretion, shall have the right to provide in any Agreement for the acceleration of the date of exercise of any installment of
any Option granted hereunder upon the occurrence of any event or circumstance as the Board shall determine. 
  

 AMENDED AND RESTATED 1998 INCENTIVE
STOCK OPTION PLAN 
  
 4 

 Section 9. Term of Options’ Exercisability. 
  
 (a) Term. Each Option shall expire not more than ten (10) years from the date of the granting thereof but shall be
subject to earlier termination as may be provided in any Agreement evidencing an Option granted hereunder. 
  
 (b) Exercisability. Subject to the provisions of Section 10 below, an Option granted to an employee optionee who ceases to be an employee of the
Company or one of its subsidiaries shall be exercisable only to the extent that the right to purchase shares under such Option has accrued and is in effect on the date such optionee ceases to be an employee of the Company or one of its subsidiaries.

  
 Section 10. Employee’s Post-Termination Exercise of Options

  
 (a) An Option will, to the extent not previously exercised by
an employee optionee, terminate three (3) months after the date on which optionee’s employment by the Company or an Affiliate is terminated (whether such termination be voluntary or involuntary) other than by reason of disability (as defined in
Section 22(e)(3) of the Code, and the Regulations thereunder), Cause (as defined below) or death. In the event of termination of employment due to disability or death, the Option will terminate one (1) year from the date of termination of employment
due to disability or death. In the event of termination of employment due to Cause, the Option will terminate immediately and automatically upon such termination. After the date optionee’s employment is terminated, as aforesaid, optionee may
exercise this Option only for the number of shares which optionee had a right to purchase and did not purchase on the date optionee’s employment terminated. If optionee is employed by an Affiliate, optionee’s employment shall be deemed to
have terminated on the date optionee’s employer ceases to be an Affiliate of the Company, unless optionee is on that date transferred to the Company or another Affiliate. Optionee’s employment shall not be deemed to have terminated if
optionee is transferred from the Company to an Affiliate, or vice versa, or from one Affiliate to another Affiliate. “Cause” means, in the absence of an employment, consulting or other agreement otherwise defining Cause and
applicable to a particular optionee: (i) incompetence, fraud, personal dishonesty, embezzlement or acts of gross negligence or gross misconduct on the part of optionee in the course of his or her employment or services, (ii) an optionee’s
engagement in conduct that is materially injurious to the Company or an Affiliate, (iii) an optionee’s conviction by a court of competent jurisdiction of, or pleading “guilty” or “no contest” to, (x) a felony, or (y) any
other criminal charge (other than minor traffic violations) which could reasonably be expected to have a material adverse impact on the Company’s or an Affiliate’s reputation or business; or (iv) willful failure by an optionee to follow
the lawful directions of a superior officer or the Board.  
  
 (b) If optionee dies while employed by the Company or an Affiliate, optionee’s executor or administrator, as the case may be, may, at any time within one (1) year after the date of optionee’s death, exercise the Option as to any
shares which optionee had a right to purchase and did not purchase during optionee’s lifetime. If optionee’s employment with the Company or an Affiliate is terminated by reason of optionee’s becoming disabled (within the meaning of
Section 22(e)(3) of the Code and the Regulations thereunder), optionee or optionee’s legal guardian or custodian may at any time within one (1) year after the date of such termination, exercise the Option as to any shares which optionee had a
right to purchase and did not purchase prior to such termination. Optionee’s executor, administrator, guardian or custodian must present proof of his or her authority satisfactory to the Company prior to being allowed to exercise this Option.

  

 AMENDED AND RESTATED 1998 INCENTIVE
STOCK OPTION PLAN 
  
 5 

 Section 11. Transferability of Options. 
  
 (a) An Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable
during the lifetime of the optionee only by the optionee. Notwithstanding the foregoing, the optionee may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of
the optionee, shall thereafter be entitled to exercise the Option. 
  
 (b) Notwithstanding the foregoing, a Nonqualified Stock Option shall be transferable to the extent provided in the Option Agreement. 
  
 Section 12. Provisions of Stock Grants. 
  
 (a) Stock Bonus Grants. Each stock bonus grant shall be evidence by a stock bonus agreement (“Stock Bonus Agreement”) duly executed on
behalf of the Company and by the grantee, which Stock Bonus Agreement shall comply with and be subject to the terms and conditions of the Plan. The Stock Bonus Agreement shall be in such form and shall contain such terms and conditions as the Board
shall deem appropriate. The terms and conditions of Stock Bonus Agreements may change from time to time, and the terms and conditions of separate Stock Bonus Agreements need not be identical, but each Stock Bonus Agreement shall include (through
incorporation of provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions: 
  
 (i) Consideration. A stock bonus may be awarded in consideration for past services actually rendered to the Company or an Affiliate for its
benefit. 
  
 (ii) Vesting. Shares of Common Stock awarded
under the Stock Bonus Agreement may, but need not, be subject to a share repurchase option or other restrictions in favor of the Company in accordance with a vesting schedule to be determined by the Board. 
  
 (iii) Termination of Stock Bonus Holder’s Employment. In the
event a stock bonus grantee’s employment or other service with the Company terminates, the Company may reacquire any or all of the shares of Common Stock held by the stock bonus grantee which have not vested as of the date of termination under
the terms of the Stock Bonus Agreement. 
  
 (iv)
Transferability. Rights to acquire shares of Common Stock under the Stock Bonus Agreement shall be transferable by the stock bonus grantee only upon such terms and conditions as are set forth in the Stock Bonus Agreement, as the Board shall
determine in its discretion, so long as Common Stock awarded under the Stock Bonus Agreement remains subject to the terms of the Stock Bonus Agreement. 
  
 (b) Restricted Stock Purchase Grants. Each restricted stock purchase grant shall be evidence by a restricted stock purchase agreement
(“Restricted Stock Purchase Agreement”) duly executed on behalf of the Company and by the grantee, which Restricted Stock Purchase Agreement shall comply with and be subject to the terms and conditions of the Plan. The Restricted Stock
Purchase Agreement shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. The terms and conditions of the Restricted Stock Purchase Agreements may change from time to time, and the terms and conditions
of separate Restricted Stock Purchase Agreements need not be identical, but each Restricted Stock Purchase Agreement shall include (through incorporation of provisions hereof by reference in the agreement or otherwise) the substance of each of the
following provisions: 
  
 (i) Purchase Price. Subject to
the provisions of Section 4(c) regarding 10% shareholders, the purchase price under each Restricted Stock Purchase Agreement shall be such amount 
  

 AMENDED AND RESTATED 1998 INCENTIVE
STOCK OPTION PLAN 
  
 6 

 as the Board shall determine and designate in such Restricted Stock Purchase Agreement. In no event, shall the purchase
price shall be less than eighty-five percent (85%) of the Common Stock’s fair market value on the date such grant is made or at the time the purchase is consummated. 
  
 (ii) Consideration. The purchase price of Common Stock acquired pursuant to the Restricted Stock Purchase Agreement
shall be paid either: (A) in cash at the time of purchase; (B) at the discretion of the Board, according to a deferred payment or other similar arrangement with the restricted stock purchase grantee; or (C) in any other form of legal consideration
that may be acceptable to the Board in its discretion. 
  
 (iii)
Vesting. Shares of Common Stock acquired under the Restricted Stock Purchase Agreement may, but need not, be subject to a share repurchase option in favor of the Company in accordance with a vesting schedule to be determined by the Board.

  
 (iv) Termination of Restricted Stock Purchase
Grantee’s Service. In the event a restricted stock purchase grantee’s employment or other service with the Company terminates, the Company may repurchase or otherwise reacquire any or all of the shares of Common Stock held by the
restricted stock purchase grantee which have not vested as of the date of termination under the terms of the Restricted Stock Purchase Agreement. 
  
 (v) Transferability. Rights to acquire shares of Common Stock under the Restricted Stock Purchase Agreement shall be transferable by the restricted
stock purchase grantee only upon such terms and conditions as are set forth in the Restricted Stock Purchase Agreement, as the Board shall determine in its discretion, so long as Common Stock awarded under the Restricted Stock Purchase Agreement
remains subject to the terms of the Restricted Stock Purchase Agreement. 
  
 Section 13. Adjustments. 
  
 (a) Upon the
occurrence of any of the following events, an Award holder’s rights with respect to Awards granted to him or her hereunder shall be adjusted as hereinafter provided, unless otherwise specifically provided in the written agreement between the
Award holder and the Company relating to such Award: 
  
 (i)
Common Stock Dividends and Common Stock Splits. If the shares of Common Stock shall be subdivided or combined into a greater or smaller number of shares or if the Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, the number of shares of Common Stock deliverable upon the exercise of Options shall be appropriately increased or decreased proportionately, and appropriate adjustments shall be made in the purchase price per share to
reflect such subdivision, combination or stock dividend; and 
  
 (ii) Recapitalization or Reorganization. In the event of a recapitalization or reorganization of the Company (except as otherwise provided in any Option Agreement) pursuant to which securities of the Company or of another corporation
are issued with respect to the outstanding shares of Common Stock, an optionee upon exercising an Option shall be entitled to receive for the purchase price paid upon such exercise the securities the optionee would have received if the optionee had
exercised the Option prior to such recapitalization or reorganization. 
  
 (iii) Modification of ISOs. Notwithstanding the foregoing, any adjustments made pursuant to subparagraphs (i) or (ii) with respect to ISOs shall be made only after the Board, after consulting with counsel for the Company, determines
whether such adjustments would constitute a “modification” of such ISOs (as that term is defined in Section 424 of the Code) or would cause any 
  

 AMENDED AND RESTATED 1998 INCENTIVE
STOCK OPTION PLAN 
  
 7 

 adverse tax consequences for the holders of such ISOs. If the Board determines that such adjustments made with respect to
ISOs would constitute a modification of such ISOs, it may refrain from making such adjustments. 
  
 (iv) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, each Option will terminate immediately
prior to the consummation of such proposed action or at such other time and subject to such other conditions as shall be determined by the Board. 
  
 (v) Issuances of Securities. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares subject to Options. No adjustments shall be made for dividends paid in cash or in property
other than securities of the Company. 
  
 (vi) Fractional
Shares. No fractional share shall be issued under the Plan and the optionee shall receive from the Company cash in lieu of such fractional shares. 
  
 (vii) Adjustments. Upon the happening of any of the events described in subparagraphs (i) or (ii) above, the class and aggregate number of shares
set forth in Section 2 and Section 4 hereof that are subject to Options which previously have been or subsequently may be granted under the Plan shall also be appropriately adjusted to reflect the events described in such subparagraphs. The Board or
Successor Board shall determine the specific adjustments to be made under this Section 13 and, subject to Section 3, its determination shall be conclusive. 
  
 (b) If any person or entity owning restricted Common Stock obtained by exercise of an Option made hereunder receives shares or securities or cash in
connection with a corporate transaction described in subparagraphs (i) or (ii) above as a result of owning such restricted Common Stock, such shares or securities or cash shall be subject to all of the conditions and restrictions applicable to the
restricted Common Stock with respect to which such shares or securities or cash were issued, unless otherwise determined by the Board or the Successor Board. 
  
 Section 14. No Special Employment Rights. 
  
 Nothing contained in the Plan or in any Award granted under the Plan shall confer upon any Award holder any right with respect to the continuation of his
employment by the Company or an Affiliate or interfere in any way with the right of the Company or an Affiliate, subject to the terms of any separate employment agreement to the contrary, at any time to terminate such employment or to increase or
decrease the compensation of the Award holder from the rate in existence at the time of the grant of an Award. Whether an authorized leave of absence, or absence in military or government service, shall constitute termination of employment shall be
determined by the Board at the time. 
  
 Section 15. Withholding Tax.

  
 The Company’s obligation to deliver shares upon the
exercise of any Award granted under the Plan shall be subject to the Award holder’s satisfaction of all applicable Federal, state and local income, excise, employment and any other tax withholding requirements. The Company and employee may
agree to withhold shares of Common Stock purchased upon exercise of an Award to satisfy the above-mentioned withholding requirements. The Board shall also have the right to require that shares be withheld from delivery to satisfy such condition.

  

 AMENDED AND RESTATED 1998 INCENTIVE
STOCK OPTION PLAN 
  
 8 

 Section 16. Restrictions on Issue of Shares. 
  
 (a) Notwithstanding the provisions of Section 7, the Company may delay the issuance of shares covered by an Award and the
delivery of a certificate for such shares until one of the following conditions shall be satisfied: 
  
 (i) The shares with respect to which such Award has been granted are at the time of the issue of such shares effectively registered or qualified under
applicable Federal and state securities acts now in force or as hereafter amended; or 
  
 (ii) Counsel for the Company shall have given an opinion, which opinion shall not be unreasonably conditioned or withheld, that such shares are exempt from registration under applicable Federal and state securities
acts now in force or as hereafter amended. 
  
 (b) It is intended
that all Awards shall be effective, and the Company shall use its best efforts to bring about compliance with the above conditions within a reasonable time, except that the Company shall be under no obligation to qualify shares or to cause a
registration statement or a post-effective amendment to any registration statement to be prepared for the purpose of covering the issue of shares in respect of which any Award may be granted, except as otherwise agreed to by the Company in writing.

  
 Section 17. Purchase For Investment; Rights of Holder on Subsequent
Registration. 
  
 (a) Unless the shares to be issued in
connection with any Award granted under the Plan have been effectively registered or are exempt from registration under the Securities Act of 1933, as now in force or hereafter amended, the Company shall be under no obligation to issue any shares
covered by any Award unless the Award holder shall give a written representation and undertaking to the Company which is satisfactory in form and scope to counsel for the Company and upon which, in the opinion of such counsel, the Company may
reasonably rely, that he or she is acquiring the shares issued pursuant to such Award for his or her own account as an investment and not with a view to, or for sale in connection with, the distribution of any such shares, and that he or she will
make no transfer of the same except in compliance with any rules and regulations in force at the time of such transfer under the Securities Act of 1933, or any other applicable law, and that if shares are issued without such registration, a legend
to this effect may be endorsed upon the securities so issued. 
  
 (b) In the event that the Company shall, nevertheless, deem it necessary or desirable to register under the Securities Act of 1933 or other applicable statutes any shares with respect to which an Award shall have been granted, or to qualify
any such shares for exemption from the Securities Act of 1933 or other applicable statutes, then the Company may take such action and may require from each optionee such information in writing for use in any registration statement, supplementary
registration statement, prospectus, or offering circular as is reasonably necessary for such purpose and may require reasonable indemnity to the Company and its officers and directors and controlling persons from such holder against all losses,
claims, damages and liabilities arising from such use of the information so furnished and caused by any untrue statement of any material fact therein or caused by the omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances under which they were made. 
  
 Section 18. Loans. 
  
 The
Company may make loans to optionees to permit them to exercise Options. If loans are made, the requirements of all applicable Federal and state laws and regulations regarding such loans must be met. 
  

 AMENDED AND RESTATED 1998 INCENTIVE
STOCK OPTION PLAN 
  
 9 

 Section 19. Modification of Outstanding Awards. 
  
 The Board may authorize the amendment of any outstanding Award with the consent of the optionee when and subject to such
conditions as are deemed to be in the best interests of the Company and in accordance with the purposes of this Plan. 
  
 Section 20. Approval of Stockholders. 
  
 The Plan shall be subject to approval by the vote of stockholders holding at least a majority of the voting stock of the Company present, or represented,
and entitled to vote at a duly held stockholders’ meeting, or by written consent of stockholders holding at least a majority of the voting stock of the Company, within twelve (12) months after the adoption of the Plan by the Board and shall
take effect as of the date of adoption by the Board upon such approval. The Board may grant Awards under the Plan prior to such approval, but any such Award shall become effective as of the date of grant only upon such approval and, accordingly, no
such Option may be exercisable prior to such approval. 
  
 Section 21.
Termination and Amendment. 
  
 (a) Unless sooner
terminated as herein provided, the Plan shall terminate ten (10) years from the date upon which the Plan was duly adopted by the Board of the Company. The Board may at any time terminate the Plan or make such modification or amendment thereof as it
deems advisable; provided, however, that except as provided in this Section 21, the Board may not, without the approval of the stockholders of the Company obtained in the manner stated in Section 20, increase the maximum number of shares for which
Awards may be granted or change the designation of the class of persons eligible to receive Awards under the Plan, or make any other change in the Plan which requires stockholder approval under applicable law or regulations or any applicable rule or
regulation of any stock exchange or over-the-counter market on which the Company’s Common Stock is then listed. The Board may grant Awards under the Plan prior to such approval, but any such Award shall become effective as of the date of grant
only upon such approval and, accordingly, no such Award may be exercisable prior to such approval. 
  
 (b) The Board may terminate, amend or modify any outstanding Award without the consent of the Award holder, provided, however, that, except as provided in
Section 13, without the consent of the optionee, the Board shall not change the number of shares subject to an Award, nor the exercise price thereof, nor extend the term of such Award. 
  
 Section 22. Reservation of Common Stock. 
  
 The Company shall at all times during the term of the Plan reserve and keep available such number of shares of stock as will be sufficient to satisfy the
requirements of the Plan and shall pay all fees and expenses necessarily incurred by the Company in connection therewith. 
  
 Section 23. Limitation of Rights in the Award Shares. 
  
 An optionee shall not be deemed for any purpose to be a stockholder of the Company with respect to any of the Awards except to the extent that the Award
shall have been exercised with respect thereto and, in addition, a certificate shall have been issued theretofore and delivered to the optionee. 
  
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 AMENDED AND RESTATED 1998 INCENTIVE
STOCK OPTION PLAN 
  
 10 

 Plan Adopted by the Board on May 8, 1998 
  
 Plan Approved by the Stockholders on October 31, 1998 
  
 Amendment Adopted by the Board on April 20, 2001 
  
 Amendment Approved by the Stockholders on June 5, 2001 
  
 Amendment and Restatement Adopted by the Board on November 1, 2002

  
 Amendment and Restatement Adopted by the Board on
January 12, 2003 
  
 Amendment and Restatement Approved by
the Stockholders on May 23, 2003 
  

 AMENDED AND RESTATED 1998 INCENTIVE
STOCK OPTION PLAN 
  
 11EXHIBIT 10.12

 Exhibit 10.12 
  
 

 
  
 ADVANCES AND SECURITY AGREEMENT

  
 This ADVANCES AND SECURITY AGREEMENT (this
“Agreement”), dated as of the earlier of the date of execution by the Bank (as hereinafter defined) and November 30, 2004, is entered into between Cooperative Bank, a state bank organized under the laws of and located in the state of North
Carolina, having its principal place of business at 201 Market Street, Wilmington, NC 28401-4443 (the “Borrower”) and the Federal Home Loan Bank of Atlanta, a corporation organized and existing under the laws of the United
States, having its principal office at 1475 Peachtree Street, N.E., Atlanta, Georgia 30309 (the “Bank”). 
  
 WHEREAS, the Borrower desires from time to time to participate in the Bank’s credit programs under the terms of this Agreement, and the Bank is
authorized to extend credit to the Borrower pursuant to the provisions of the Federal Home Loan Bank Act, as now and hereafter amended (the “Act”), and the regulations and guidelines of the Federal Housing Finance Board (the
“Board”) or any successor entity, as now and hereafter in effect (collectively, the “Regulations”); 
  
 WHEREAS, the Bank requires that extensions of credit by the Bank be secured pursuant to this Agreement, and the Borrower and any Obligor (as hereinafter
defined) joined to this Agreement from time to time, as provided herein, agree to provide the security the Bank requests in accordance with this Agreement; and 
  

WHEREAS, the Borrower and each other Obligor acknowledges, understands and agrees that (a) the Bank shall not have any obligation or commitment (under
this Agreement, the Credit and Collateral Policy, or otherwise) to approve any application by the Borrower for Advances, Credit Products, Derivative Transactions, or Other Products, (b) the terms and conditions of any Advances, Credit Products,
Derivative Transactions, or Other Products which the Bank may make or issue, except for any such terms and conditions specified in a Confirmation, may change after the date made or issued, in connection with a modification to the Bank’s Credit
and Collateral Policy as provided in Section 6.01 of this Agreement, and (c) the Bank, in its sole discretion, may modify the Credit and Collateral Policy from time to time after the date of this Agreement and need not obtain any further consent
from any Obligor in order for those modifications to become binding upon each Obligor. 
  
 NOW THEREFORE, the Borrower and the Bank agree as follows: 
  
 ARTICLE I: DEFINITIONS 
  
 Section 1.01 Definitions. As used herein, the following terms shall have the following meanings: 
  
 (A) “Advances” means any and all loans or other similar extensions of credit, heretofore, now or hereafter granted by the Bank to,
on behalf of, or for the account of, the Borrower. 
  

 (B) “Affiliate” means an affiliate of the Borrower which (i) has been accepted by
the Bank, in its sole discretion, as a person which may pledge collateral to the Bank and otherwise support the obligations of the Borrower to the Bank hereunder and (ii) has entered into a joinder Agreement. The Affiliate and the Borrower are
hereinafter jointly referred to as the “Obligors.” 
  
 (C) “Application” means an application or other writing, in such form or forms as shall be specified by the Bank from time to time, by which the Borrower requests an Advance or a Credit Product, and by which an
Obligor requests a Derivative Transaction or an Other Product. 
  
 (D) “Borrowed Money” means, with respect to any Person, without duplication (a) all indebtedness for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, or
upon which interest payments are customarily made, (c) that portion of obligations with respect to capital leases that is properly classified as a liability on a balance sheet in conformity with GAAP, (d) any obligations of such Person issued or
assumed as the deferred purchase price of property or services purchased by such Person (other than trade debt incurred in the ordinary course of business and due within six months of the incurrence thereof or evidenced by a note or other
instrument), (e) all Borrowed Money of others secured by (or for which the holder of such Borrowed Money has an existing right, contingent or otherwise, to be secured by) any lien on, or payable out of the proceeds of production from, any property
or asset owned, held or acquired by such Person regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is nonrecourse to the credit of that Person, (f) all guaranty obligations of such Person in respect of
any Borrowed Money of any other person, (g) the maximum amount of all standby letters of credit issued or bankers’ acceptances facilities created for the account of such Person and, without duplication, all drafts drawn thereunder (to the
extent unreimbursed), (h) the principal balance outstanding under any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product plus any accrued interest thereon, and (i) the
Borrowed Money of any partnership or unincorporated joint venture in which such Person is a general partner or joint venturer. 
  
 (E) “Borrowing Documents” means this Agreement (as amended by any and all Joinder Agreements and any and all Collateral Pledge
Amendments), all Applications, all Confirmations, and all Supplemental Documentation. 
  
 (F) “Capital Stock” means all of the capital stock in the Bank held by the Borrower and all payments which have been or hereafter are made on account of subscriptions to and all unpaid
dividends on such capital stock. 
  
 (G)
“Collateral” means (i) all property, including the products and proceeds thereof, heretofore assigned, transferred or pledged to the Bank by any Obligor as collateral for an Advance, a Credit Product, a Derivative
Transaction, an Other Product or any other Liability prior to the date hereof and (ii) all Capital Stock, Deposits, Residential First Mortgage Collateral, Commercial Mortgage Collateral, Multifamily Mortgage Collateral, Government and Agency
Securities Collateral, HELOC and Second Mortgage Collateral, Other Securities Collateral and Other Collateral, including the products and proceeds thereof, which is now or hereafter pledged to the Bank pursuant to Section 3.01 hereof or any Joinder
Agreement. 
  
 (H) “Collateral Maintenance
Level” means the aggregate dollar amount equal to such percentage(s) as the Bank may specify from time to time of all Liabilities (1) for Advances 

  

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and Credit Products; (2) with respect to Derivative Transactions for which an Obligor is required to maintain Collateral; and (3) with respect to any Other
Product or under any Borrowing Documents. The Bank may increase or decrease the Collateral Maintenance Level at any time as provided in the Credit and Collateral Policy, and such increase or decrease, as specified by the Bank, will apply to all
existing as well as after-arising Liabilities. 
  
 (I)
“Collateral Pledge Amendment” means a Collateral Pledge Amendment, substantially in the form attached hereto as Exhibit B, whereby the Obligors and the Bank have agreed to amend the collateral pledge provisions of Section
3.01 (ii) hereof as provided therein. 
  
 (J)
“Commercial Mortgage Collateral” means all notes, bonds, instruments, mortgages, deeds of trust, deeds to secure debt, security agreements, policies and certificates of insurance, guarantees, evidences of recordation,
applications, underwriting materials, surveys, appraisals, approvals, permits, notices, opinions of counsel, loan servicing data and all other electronically stored and written records or materials relating to fully-disbursed loans held by any
Obligor secured by a first lien on property improved by one or more commercial buildings, together with all rights and interests associated with such loans and documents, including all legal, beneficial, residual and servicing rights, and any
endorsements or assignments thereof. 
  
 (K)
“Confirmation” means a confirmation, in such form or forms as the Bank may generate from time to time, by which the Bank agrees to, confirms and provides any additional terms with respect to any Advance, Credit Product,
Derivative Transaction, or Other Product. 
  
 (L)
“Credit and Collateral Policy” means the policies and procedures of the Bank governing the administration of its credit and other programs, including the requirements for maintenance of collateral to secure extensions of
credit by the Bank, as any such policies and procedures may be amended, supplemented, restated or otherwise modified from time to time hereafter, in accordance with Section 6.01. 
  
 (M) “Credit Products” means any and all commitments or obligations under which the Bank agrees to
make payments on behalf of or for the account of the Borrower, including letters of credit, guarantees or other arrangements intended to facilitate transactions between the Borrower and third parties, or under which the Bank enters into a credit or
financial accommodation, agreement or other arrangement with the Borrower, irrespective of whether the Bank’s obligation is contingent or conditional. 
  
 (N) “Deposits” means all deposit accounts maintained by any Obligor with the Bank, all money, cash, checks, drafts, notices,
bills, bills of exchange and bonds deposited therein or credited thereto, any increases, renewals, extensions, substitutions and replacements thereof, whether or not deposited in any such deposit account and all statements, certificates, passbooks
and instruments representing any such deposit account. 
  
 (O)
“Derivative Transactions” means all interest rate swaps, all interest rate caps, floors and collars, all currency exchange transactions, all options and all similar transactions entered into between the Bank and any Obligor.

  
 (P) “GAAP” means generally accepted
accounting principles. 
  

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 (Q) “Government and Agency Securities Collateral” means mortgage-backed
securities (including participation certificates) issued by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association, obligations guaranteed by the Government National Mortgage Association, and obligations issued or
guaranteed by the United States or an agency thereof. 
  
 (R)
“HELOC and Second Mortgage Collateral” means all notes, bonds, instruments, mortgages, deeds of trust, deeds to secure debt, security agreements, policies and certificates of insurance or guarantees, evidences of recordation,
applications, underwriting materials, surveys, appraisals, approvals, permits, notices, opinions of counsel and loan servicing data and all other electronically stored and written records or materials relating to home equity lines of credit held by
any Obligor, loans held by any Obligor secured by a junior lien on one-to-four unit single-family dwellings, or other similar loans held by any Obligor which have not been fully disbursed, together with all rights and interests associated with such
loans and documents, including all legal, beneficial, residual and servicing rights, and any endorsements or assignments thereof. 
  
 (S) “Joinder Agreement” means a joinder agreement, substantially in the form attached hereto as Exhibit A, whereby an Obligor has
agreed in writing to be primarily, jointly and severally liable for all obligations of all of the Obligors to the Bank under this Agreement and to pledge Collateral satisfactory to the Bank as security for such obligations. 
  
 (T) “Lendable Collateral Value” means an amount equal
to such percentage as the Bank shall from time to time, in its sole discretion, ascribe in the Credit and Collateral Policy to the market value or unpaid principal balances (as the Bank may specify or define) of Qualifying Collateral. 
  
 (U) “Liabilities” means all fees, expenses,
obligations, liabilities or indebtedness of any Obligor to the Bank, due or to become due, direct or indirect, absolute or contingent, joint or several, now existing or hereafter at any time created, arising or incurred, under this Agreement, any
Application, Confirmation, Supplemental Documentation, Advance, Derivative Transaction, Credit Product, Other Product or Deposit, including any overdrafts or other charges in connection therewith, or under any other obligation for any other service
provided by the Bank, including any obligations under indemnification provisions in any agreement or document between any Obligor and the Bank, and any renewal, extension or substitution of any such obligations, liabilities and indebtedness,
including reasonable attorneys’ fees of the Bank in the collection thereof and the enforcement of any remedies with respect to any Collateral therefor. 
  
 (V) “Material Adverse Effect” means (a) a material adverse effect upon the business, operations, properties, assets or condition
(financial or otherwise) of any Obligor or (b) the impairment of the ability of any Obligor to perform its obligations under any Borrowing Document to which it is a party or of Bank to enforce any Borrowing Document or collect any of the
Liabilities. In determining whether any individual event would result in a Material Adverse Effect, notwithstanding that such event does not of itself have such effect, a Material Adverse Effect shall be deemed to have occurred if the cumulative
effect of such event and all other then existing events would result in a Material Adverse Effect. 
  
 (W) “Multifamily Mortgage Collateral” means all notes, bonds, instruments, mortgages, deeds of trust, deeds to secure debt,
security agreements, policies and certificates of insurance, guarantees, evidences of recordation, applications, underwriting materials, surveys, appraisals, 

  

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approvals, permits, notices, opinions of counsel, loan servicing data and all other electronically stored and written records or materials relating to the
fully-disbursed loans held by any Obligor secured by a first lien on property improved by one or more multifamily buildings, together with all rights and interests associated with such loans and documents, including all legal, beneficial, residual
and servicing rights, and any endorsements or assignments thereof. 
  
 (X) “Obligors” means, collectively, the Borrower and any Affiliate joined hereunder as provided herein. 
  
 (Y) “Other Collateral” means such items of personal property, other than Capital Stock, Deposits, Residential First Mortgage
Collateral, Commercial Mortgage Collateral, Multifamily Mortgage Collateral, Government and Agency Securities Collateral, HELOC and Second Mortgage Collateral, and Other Securities Collateral, that are offered by any Obligor as Collateral and are
specifically accepted by the Bank as Collateral; provided, Other Collateral may from time to time include specific items of Residential First Mortgage Collateral, Commercial Mortgage Collateral, Multifamily Mortgage Collateral and HELOC and Second
Mortgage Collateral which are identified and offered by an Obligor as Collateral and are specifically accepted by the Bank as Collateral. 
  
 (Z) “Other Products” means all products and services, other than an Advance, Credit Product or Derivative Transaction, offered by
the Bank to any Obligor from time to time, including correspondent banking services, mortgage purchase programs and affordable housing and community investment products and services. 
  
 (AA) “Other Securities Collateral” means securities (other than Government and Agency Securities
Collateral) representing unsubordinated interests in, or collateralized by first lien security interests in, both the interest and principal payments on first lien residential mortgages. 
  
 (BB) “Person” means an individual, partnership, corporation, trust, joint venture, joint stock
company, limited liability company, association, unincorporated organization, governmental authority, or any other entity. 
  
 (CC) “Qualifying Collateral” means Collateral, other than Capital Stock and Deposits, which is eligible as collateral to support
the origination of Advances, Credit Products, Derivative Transactions and Other Products under the terms and conditions of the Act, the Regulations and the Credit and Collateral Policy, and which satisfies such other requirements for lending as may
be established by the Bank. 
  
 (DD) “Residential First
Mortgage Collateral” means all notes, bonds, instruments, mortgages, deeds of trust, deeds to secure debt, security agreements, policies and certificates of insurance or guarantees, evidences of recordation, applications, underwriting
materials, surveys, appraisals, approvals, permits, notices, opinions of counsel and loan servicing data and all other electronically stored and written records or materials relating to fully-disbursed loans held by any Obligor secured by a first
lien on one-to-four unit single family dwellings, together with all rights and interests associated with such loans and documents, including all legal, beneficial, residual and servicing rights, and any endorsements or assignments thereof.

  
 (EE) “Supplemental Documentation” means any document, agreement or other writing (other than this Agreement) between the Bank and an Obligor
relating to Deposits, Advances, 

  

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Credit Products, Derivative Transactions and Other Products, including reimbursement agreements, mortgage purchase documents, wire transfer agreements,
automated clearinghouse agreements, agreements related to the loans held for sale program, International Swap Dealers Association (“ISDA”) master agreements, schedules to ISDA master agreements and
credit support annexes to ISDA master agreements. 
  
 Section
1.02 Other Definitional Provisions. References to “Sections” “Subsections” and “Exhibits” shall be to Sections, Subsections and Exhibits, respectively, of this Agreement
unless otherwise specifically provided. Any of the terms defined in Section 1.01 may, unless the context otherwise requires, be used in the singular or the plural depending on the reference. In this Agreement, “hereof,” “herein,”
“hereto,” “hereunder” and the like mean and refer to this Agreement as a whole and not merely to the specific section, paragraph or clause in which the respective word appears; words importing any gender include the other gender;
references to “writing” include printing, typing, lithography, facsimile, electronic and other means of reproducing words or other data in a tangible visible form; the words “including,” “includes” and
“include” shall be deemed to be followed by the words “without limitation”; references to agreements and other contractual instruments shall be deemed to include subsequent amendments, assignments, and other modifications
thereto, but only to the extent such amendments, assignments and other modifications are not prohibited by the terms of this Agreement; references to Persons include their respective permitted successors and assigns or, in the case of governmental
Persons, Persons succeeding to the relevant functions of such Persons; and all references to statutes and related regulations shall include any amendments of same and any successor statutes and regulations. 
  
 ARTICLE II: ADVANCES AGREEMENT 
  
 Section 2.01 Documentation. Subject to Section 6.03
hereof, the Borrower may apply to the Bank for Advances, Credit Products, Derivative Transactions and Other Products in accordance with the Credit and Collateral Policy. The final terms of any Advance, Credit Product, Derivative Transaction or Other
Product shall be conclusively established by this Agreement and any Confirmation and Supplemental Documentation related thereto. Any Obligor shall be estopped from asserting any claim or defense with respect to the terms applicable to any Advance,
Credit Product, Derivative Transaction or Other Product unless, within the earlier of (i) any time period specified in any Confirmation or Supplemental Documentation relating thereto and (ii) two (2) business days of receipt of the final documents
relating to such product or service, the Borrower delivers to the Bank a written notice specifying the disputed term(s) or condition(s) of the Advance, Credit Product, Derivative Transaction or Other Product. Upon the request of the Bank, or as
provided in the Credit and Collateral Policy, the Borrower shall sign and deliver to the Bank a promissory note or notes and such other Supplemental Documentation in such form as the Bank may reasonably require evidencing any Advance, Credit
Product, Derivative Transaction or Other Product. Unless otherwise agreed by the Bank in writing, all Advances shall be made by crediting the Borrower’s demand deposit account(s) with the Bank. All Borrowing Documents shall be deemed to have
been executed and delivered in Atlanta, Georgia, and all payments made under the Borrowing Documents shall be deemed to have been made in Atlanta, Georgia. The Bank’s obligation to fund any portion of any approved Advance, issue any approved
letter of credit, guaranty or financial accommodation relating to a Credit Product or continue under any Derivative Transaction or Other Product shall be subject to (i) continuing compliance by the Obligors with the terms and provisions of this
Agreement (ii) there having occurred no Event of Default hereunder and (iii) the continuing satisfaction by the Obligors of the credit and collateral considerations of the 

  

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Bank and the eligibility requirements and policies prescribed in the Act, the Regulations and the Credit and Collateral Policy. 
  
 Section 2.02 Repayment of Liabilities. Each Obligor agrees to
repay all Liabilities in accordance with this Agreement, the Credit and Collateral Policy and the terms and conditions of the Confirmation and Supplemental Documentation evidencing such Liabilities. Interest shall be paid on all Liabilities at the
times specified by the Bank in the Credit and Collateral Policy and in the Confirmation or Supplemental Documentation and shall be charged for each day that such Liabilities are outstanding at the rate applicable to such Liabilities. Each Obligor
shall pay to the Bank, immediately and without demand, interest on any past due principal of and interest on any Liabilities at an interest rate which is the greater of (i) the rate applicable to such Liabilities plus one percent or (ii) the rate in
effect and being charged by the Bank from time to time on overdrafts on demand deposit accounts of its members, but in no event more than any applicable limit established by the Regulations (the “Default Rate”).
The Borrower shall ensure that, on any day on which any payment is due to the Bank with respect to any Liabilities, whether by maturity, prepayment or acceleration, the Borrower’s demand deposit account(s) with the Bank has an available balance
in an amount at least equal to the amounts then due and payable to the Bank, and the Borrower hereby authorizes the Bank to debit the Borrower’s demand deposit account(s) with the Bank for all amounts due and payable with respect to any
Liabilities and for all other amounts due and payable hereunder. In the event that the available balance in the Borrower’s demand deposit account(s) is insufficient to pay such due and payable amounts, the Bank may, without notice to or request
from any Obligor, apply any other deposits, credits, or monies of any Obligor then in the possession of the Bank to the payment of amounts due and payable. Each Obligor agrees that, in the event that any such debit results in any of the
Borrower’s accounts with the Bank being overdrawn, the Obligor shall immediately reimburse the Bank for such overdraft amount and pay overdraft charges thereon at the Default Rate, in addition to any minimum fees for overdrafts imposed by the
Bank from time to time. All payments with respect to Liabilities shall be applied first to any fees or charges applicable thereto and to interest due thereon, in such order as the Bank may determine, and then to any principal amount thereof that is
then due and payable. 
  
 Section 2.03 Payment of Prepayment
Charges. All prepayment fees and charges described in the Credit and Collateral Policy, or in any Application, Confirmation or Supplemental Documentation, shall be payable at the time of any voluntary or involuntary payment of all or part of
the principal of any Liabilities prior to the originally scheduled maturity thereof, including without limitation payments that are made as a part of a liquidation of any Obligor or that become due by operation of law or as a result of an
acceleration pursuant to Section 5.02 hereof, whether such payment is made by any Obligor, by a conservator, receiver, liquidator or trustee of or for any Obligor, or by any successor to or any assignee of any Obligor. 
  
 Section 2.04 Compliance with the Credit and Collateral Policy.
Each Obligor hereby agrees to comply at all times with the Credit and Collateral Policy. 
  
  
 ARTICLE III: SECURITY AGREEMENT 
  
 Section 3.01 Creation of Security Interest. As security for all Liabilities, the Borrower hereby assigns,
transfers, and pledges to the Bank, and grants to the Bank a security interest in, (i) all property heretofore assigned, transferred or pledged by the Borrower to the Bank as collateral securing Liabilities and other obligations of the Borrower
prior to the date hereof, (ii) except as 

  

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otherwise provided in a Collateral Pledge Amendment, all of the Capital Stock, Deposits, Residential First Mortgage Collateral, Commercial Mortgage
Collateral, Multifamily Mortgage Collateral and HELOC and Second Mortgage Collateral now or hereafter owned by the Borrower and (iii) all of the Government and Agency Securities Collateral, Other Securities Collateral, and Other Collateral,
specifically identified by the Borrower to the Bank as Qualifying Collateral and accepted by the Bank, and all proceeds and products of any items of the Collateral described in clauses (i) through (iii) above. In addition, as security for all
Liabilities, each Affiliate will assign, transfer and pledge to the Bank, and grant to the Bank a security interest in, the Collateral set forth in its Joinder Agreement. 
  
 Section 3.02 Representations and Warranties Concerning Collateral. Each Obligor represents and warrants to the
Bank, as of the date hereof, the date of each Advance, Credit Product, Derivative Transaction or Other Product, and the date of delivery of each collateral report required under Section 3.07(A) hereof, as follows: 
  
 (A) The Obligor owns and has marketable title to the Collateral pledged by it
hereunder and has the right and authority to grant a security interest in such Collateral and to subject all of such Collateral to this Agreement; 
  
 (B) The information given from time to time by the Obligor as to each item of Collateral pledged by it hereunder is true, accurate and complete in all
material respects; 
  
 (C) The Obligors own Qualifying Collateral
with a Lendable Collateral Value at least equal to the Collateral Maintenance Level; 
  
 (D) The lien of the Residential First Mortgage Collateral, Commercial Mortgage Collateral and Multifamily Mortgage Collateral on the real property securing such Collateral is a first, prior and perfected lien under
applicable law; 
  
 (E) The Obligor has not conveyed or otherwise
created, and there does not otherwise exist, any participation interest or other direct, indirect, legal, or beneficial interest, lien or encumbrance in any Collateral on the part of any Person other than the Bank and the Obligor, except that the
Obligor may sell or otherwise dispose of Collateral not necessary to meet the requirements of Section 3.03(A), and not otherwise reported to the Bank as Qualifying Collateral for purposes of meeting the requirements of Section 3.03(A), to the extent
such sale or disposition is made to a person not controlling, controlled by or in common control with any Obligor; 
  
 (F) No account debtor or other obligor owing any obligation to the Obligor with respect to any Qualifying Collateral necessary to meet the collateral
maintenance requirement in Section 3.03(A) hereof, or otherwise reported to the Bank as Qualifying Collateral for purposes of meeting the requirements of Section 3.03(A), has or shall have any defenses, offsetting claims, or other rights affecting
the right of the Obligor or the Bank to enforce the terms of such Qualifying Collateral, and no defaults (or conditions that, with the passage of time or the giving of notice or both, would constitute a default) exist under any such Qualifying
Collateral; and 
  
 (G) No part of any real property or interest
in real property that is included within the Collateral contains or is subject to the effects of toxic or hazardous materials or other hazardous substances (including those defined in the Comprehensive Environmental Response Compensation 

  

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and Liability Act of 1980, as amended, 42 U.S.C. §9601, et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. §1801 et seq.; the Resource
Conservation and Recovery Act, 42 U.S.C. §6901 et seq.; and in the regulations adopted and publications promulgated pursuant to said laws) the presence of which could subject the Bank to any liability under applicable state or Federal law or
local ordinance either at any time that such property is pledged to the Bank or upon the enforcement by the Bank of its security interest therein. 
  
 Section 3.03 Collateral Maintenance Requirement. 
  
 (A) The Obligors shall at all times maintain Qualifying Collateral which has a Lendable Collateral Value that is at least equal to the Collateral
Maintenance Level. In addition, the Obligors agree to maintain such additional amounts of Collateral as may be required by the Bank in order to protect the Bank’s security position with respect to the outstanding Liabilities of the Obligors to
the Bank. 
  
 (B) All documents and other matters pertaining to
the Qualifying Collateral necessary to meet the requirements of Section 3.03(A), or otherwise reported to the Bank as Qualifying Collateral for purposes of meeting the requirements of Section 3.03(A), must be satisfactory to the Bank and, if not,
the Bank may refuse to accept such Qualifying Collateral or may assign such Qualifying Collateral a Lendable Collateral Value less than the Lendable Collateral Value otherwise applicable under the Credit and Collateral Policy. 
  
 (C) No Obligor shall assign, pledge, transfer, create any lien, encumbrance
or security interest in, sell, or otherwise dispose of any Collateral; provided, however, (i) an Obligor may sell or otherwise dispose of Collateral not necessary to meet the requirements of Section 3.03(A) and not otherwise reported
to the Bank as Qualifying Collateral for purposes of meeting the requirements of Section 3.03(A), so long as no Event of Default has occurred and is continuing and such Collateral is sold to a person not controlling, controlled by or in common
control with any Obligor and (ii) upon the written request of the Obligors, the Bank will agree to release such Collateral as shall be mutually agreeable to the Bank and the Obligors so long as such Collateral to be released is not necessary to meet
the requirements of Section 3.03(A) and not otherwise reported to the Bank as Qualifying Collateral for purposes of meeting the requirements of Section 3.03(A). 
  

Section 3.04 Holding of Collateral. 
  
 (A) Each Obligor shall hold any Collateral in its possession in such manner as reasonably identifies the security interest of the Bank and as the Bank
shall further direct. 
  
 (B) Except for Collateral required to be
delivered to the Bank or its custodian as required hereunder, Collateral shall be held by each Obligor in its possession (except as otherwise provided herein) in trust for the benefit of, and subject to the direction, and control of, the Bank and
shall be physically safeguarded by the Obligor in accordance with reasonable commercial procedures. To the extent that any Obligor enters into any Custodial arrangement with respect to the Collateral, the Obligor shall notify the Bank in writing of
such arrangement, shall provide the Bank with copies of all agreements evidencing such arrangement, which shall be satisfactory to the Bank in all respects, and shall cause such agreements to provide that the custodian holds the Collateral for the
benefit of the Bank and no other person and that the custodian shall accept instructions from the Bank with respect to the Collateral. Without limitation of the foregoing, each Obligor shall take all action 

  

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necessary or desirable to protect and preserve the Collateral and the Bank’s interest therein, including, the collection of payments under all mortgages
and under any insurance, assuring that all mortgages are serviced in accordance with the standards of a reasonable and prudent mortgagee and compliance with all requirements with respect to the Collateral set forth in the Credit and Collateral
Policy. 
  
 (C) Any Collateral which is a security or other
investment property shall be delivered to the Bank, together with such assignments, powers and other documents as the Bank shall require in connection with its perfected, first-priority security interest in such Collateral. With respect to any
uncertificated securities pledged to the Bank as Collateral hereunder, the delivery requirements contained in this Agreement shall be satisfied by the transfer of a perfected, first-priority security interest in such securities to the Bank, such
transfer to be effected in such manner and to be evidenced by such documents as shall be reasonably specified by the Bank. 
  
 Section 3.05 Delivery of Collateral. 
  
 (A) Promptly upon the Bank’s written or oral request, or as provided in the Credit and Collateral Policy, the Obligors shall deliver to the Bank, or
to a custodian designated by the Bank, such Qualifying Collateral as may be necessary so that the Lendable Collateral Value of Qualifying Collateral held by the Bank, or such custodian, meets or exceeds the Collateral Maintenance Level at all times.
Collateral delivered to the Bank shall be endorsed and assigned, as appropriate, in such form as reasonably specified by the Bank and together with such information with respect to such Collateral as the Bank shall request. 
  
 (B) Each Obligor agrees to pay to the Bank such reasonable fees and charges
as may be assessed by the Bank to cover the Bank’s overhead and other costs relating to the receipt, holding and redelivery of Collateral and other reasonable expenses, disbursements and advances incurred or made by the Bank in connection
therewith (including the reasonable compensation and the expenses and disbursements of any custodian, consultant or appraiser that may be appointed by the Bank hereunder, and the agents and legal counsel of the Bank and of such custodian).

  
 Section 3.06 Collateral Reports; Access to
Collateral. 
  
 (A) At the times provided in the Credit
and Collateral Policy, and promptly after any additional requests by the Bank, each Obligor shall deliver to the Bank such information, reports, verification reviews and schedules with respect to the Collateral, the Qualifying Collateral and
compliance with this Agreement and the Credit and Collateral Policy as provided in the Credit and Collateral Policy, or as the Bank shall request, all in form and substance as prescribed by the Bank. 
  
 (B) Each Obligor shall provide the Bank with such financial reports and other
information relating to the Obligor’s financial condition as the Bank may reasonably request. 
  
 (C) Each Obligor shall give the Bank, its agents and representatives access at reasonable times and locations to the Collateral, and to the Obligor’s
books and records of account relating to such Collateral, for the purpose of the Bank or its agents and representatives examining, verifying or reconciling the Collateral and the Obligor’s reports to the Bank thereon. At the Bank’s
request, the Obligors shall make any or all documents and information pertaining to the Collateral available to the Bank, its agents and representatives at reasonable times and locations for their inspection and 

  

 -10- 

 
approval. Each Obligor shall make adequate working facilities available to the Bank, its agents and representatives for purposes of such verifications and
reviews. Reasonable fees and charges may be assessed to the Obligors by the Bank to cover overhead and other costs relating to such verifications and reviews, including, any costs and expenses of third parties engaged by the Bank for such purposes.

  
 (D) If any Obligor becomes aware or has reason to believe that
the Lendable Collateral Value of the Obligors’ Qualifying Collateral has fallen below the Collateral Maintenance Level, that a contingency exists which with the lapse of time could result in the Obligors’ failure to meet the Collateral
Maintenance Level, or any event has occurred which could reasonably be expected to have a material adverse effect on the operations or financial condition of the Obligor, such Obligor shall immediately notify the Bank. 
  
 (E) Each Obligor shall notify the Bank prior to (i) any change in the
Obligor’s name, charter or organizational documents, jurisdiction of organization or form of organization and (ii) any event that could result in a change in the Obligor’s “location” as defined in the Uniform Commercial Code.

  
 Section 3.07 Additional Documentation; Further
Assurances. 
  
 (A) Each Obligor shall, or the Bank may,
in lieu of the Obligor, make, execute, record and deliver such agreements, financing statements, notices, assignments, listings, powers, and other documents with respect to the Collateral and the Bank’s first-priority security interest therein
and in such form as the Bank may reasonably require. Each Obligor shall, upon request of the Bank, immediately take such actions as the Bank shall deem necessary or appropriate to perfect the Bank’s first-priority security interest in the
Collateral or otherwise to obtain, preserve, protect, enforce or collect the Collateral or the proceeds thereof. 
  
 (B) The Bank may from time to time hereafter require any Obligor to provide representations, warranties, and undertakings, in addition to those contained
herein, reasonably related to the securing, perfecting, maintaining or enforcing of the Bank’s rights and interests in the Collateral. 
  
 Section 3.08 Bank’s Responsibilities as to Collateral. The Bank’s duty as to the Collateral shall be solely to use reasonable care
in the custody and preservation of the Collateral in its possession, which shall not include any steps necessary to preserve rights against prior parties nor the duty to send notices, perform services, or take any action in connection with the
management of the Collateral. The Bank shall not have any responsibility or liability for the form, sufficiency, correctness, genuineness or legal effect of any instrument or document constituting a part of the Collateral, or any signature thereon
or the description or misdescription, or value of property represented, or purported to be represented, by any such document or instrument. Each Obligor agrees that any and all Collateral may be removed by the Bank from the state or location where
situated, and may be subsequently dealt with by the Bank as provided in this Agreement. 
  
 Section 3.09 Bank’s Rights as to Collateral; Power of Attorney. At any time or times, at the expense of the Obligors, the Bank may in its discretion, before or after the occurrence of an Event of
Default as defined in Section 5.01 hereof, in its own name or in the name of its nominee or of any Obligor, do any or all things and take any and all actions that are pertinent to the protection 

  

 -11- 

 
of the Bank’s interest hereunder and are lawful under applicable law, including, but not limited to, the following: 
  
 (A) Terminate any consent given hereunder; 
  
 (B) Notify obligors on any Collateral to make payments or render performance
thereon directly to the Bank; 
  
 (C) Endorse any Collateral in
any Obligor’s name; 
  
 (D) Enter into any extension,
compromise, settlement, or other agreement relating to or affecting any Collateral; 
  
 (E) Take any action any Obligor is required to take or which is otherwise reasonably necessary to file a financing statement, take possession of Collateral, obtain control of Collateral or otherwise perfect a security
interest in any or all of the Collateral. 
  
 (F) Take any action
any Obligor is permitted to take in connection with the Collateral, to the same extent as if the Bank were the originator of the Collateral; 
  
 (G) Take control of any funds or other proceeds generated by the Collateral and use the same to reduce Liabilities as they become due; and 
  
 (H) Cause the Collateral to be transferred to its name or the name of its
nominee. 
  
 Each Obligor hereby appoints the Bank as its true and lawful
attorney, for and on behalf of the Obligor and in its name, place and stead, to prepare, execute and record endorsements and assignments to the Bank of all or any item of Collateral, giving or granting to the Bank, as such attorney, full power and
authority to do or perform every lawful act necessary or proper in connection therewith as fully as the Obligor might or could do. Each Obligor hereby ratifies and confirms all that the Bank shall lawfully do or cause to be done by virtue of this
special power of attorney. This special power of attorney is granted for a period commencing on the date hereof and continuing until the discharge of all Liabilities and all obligations of the Obligors hereunder regardless of any default by any
Obligor, is coupled with an interest, and is irrevocable for the period granted. 
  
 Section 3.10 Proceeds of Collateral. Each Obligor, as the Bank’s agent, shall collect all payments when due on all Collateral. If the Bank so requires, each Obligor shall hold such collections
separate from its other monies in one or more designated cash collateral accounts maintained at the Bank and apply them to the reduction of Liabilities as they become due; otherwise, the Bank consents to the Obligors’ use and disposition of all
such collections. 
  

 -12- 

 ARTICLE IV: ADDITIONAL REPRESENTATIONS, 
 WARRANTIES AND COVENANTS 
  
 Section 4.01 General Representations and Warranties by the Obligors. Each Obligor hereby represents and warrants that, as of the dale hereof, the date of each Advance, Credit Product, Derivative
Transaction or Other Product, and the date of delivery or each collateral report required under Section 3.07(A) hereof: 
  
 (A) The Obligor is not, and neither the execution of nor the performance of any of the transactions or obligations of the Obligor under this Agreement
shall, with the passage of time, the giving of notice or otherwise, cause the Obligor to be: (i) in violation of its charter or articles of incorporation, by-laws, the Act or the Regulations, any other law or administrative regulation, or any court
decree; or (ii) in default under or in breach of any material indenture, contract or other instrument or agreement to which the Obligor is a party or by which it or any of its property is bound; 
  
 (B) The Obligor has full corporate power and authority and has received all
corporate and governmental authorizations and approvals (including those required under the Act and the Regulations) as may be required to enter into and perform its obligations under this Agreement and to obtain any Derivative Transaction or Other
Product, and the Borrower has full corporate power and authority and has received all corporate and governmental authorizations and approvals (including those required under the Act and the Regulations) as may be required to borrow each Advance and
to obtain each Credit Product, Derivative Transaction and Other Product; 
  
 (C) The information given by the Obligor herein or in any Application, Confirmation or Supplemental Documentation, or in any oral statement made in connection with transactions contemplated thereunder, is true,
accurate and complete in all material respects; 
  
 (D) The name,
location (as defined in the Uniform Commercial Code) and corporate form of the Obligor is, and for the lesser of its entity existence or the four months prior to the date of this Agreement has been, the same as set forth in the opening paragraph of
this Agreement or in a Joinder Agreement; 
  
 (E) All financial
statements concerning any Obligor which have been furnished to the Bank or will hereafter be furnished to the Bank pursuant to this Agreement or any Joinder Agreement, have been or will be prepared in accordance with GAAP consistently applied
(except as disclosed therein) and do or will present fairly the financial condition of the entities covered thereby as at the dates thereof and the results of their operations for (he periods then ended, subject to, in the case of unaudited
financial statements, the absence of footnotes and year-end adjustments; 
  
 (F) Since the date of the most recent audited financial statements of any Obligor referred to in Section 4.01 (E) above, there have been no events or changes in facts or circumstances affecting any Obligor which
individually or in the aggregate have had or could reasonably be expected to have a Material Adverse Effect; 
  
 (G) (i) No Obligor is the subject of any review or audit by any governmental or regulatory investigation concerning the violation or possible violation of
any law, and (ii) there are no judgments outstanding against any Obligor or affecting any property of any Obligor, nor is there any action, charge, claim, demand, suit, proceeding, petition, governmental investigation or arbitration now pending or,
to the best knowledge of Borrower after due inquiry, threatened against or affecting any Obligor or any property of any Obligor which could reasonably be expected to result in any Material Adverse Effect; 
  
 (H) None of the proceeds of any Advance (or other credit extension hereunder)
will be used in connection with any “reportable transaction” within the meaning of Treasury Regulation Section 

  

 -13- 

 
1.6011-4(b) or in connection with any “potentially abusive tax shelter” within the meaning of Section 6112(b) of the Internal Revenue Code of 1986,
as amended; and 
  
 (I) Each Borrowing Document is and will remain
(notwithstanding any amendment thereto occurring after the date of this Agreement) the legally valid and binding obligation of each Obligor, enforceable in accordance with its terms. 
  
 Section 4.02 General Covenants by the Obligors. Until the termination of this Agreement and the indefeasible
satisfaction in full of all of the Liabilities: 
  
 (A) To the
extent that the Borrower relies upon the Lendable Collateral Value of Qualifying Collateral owned by an Affiliate in obtaining or maintaining any Advance (or other extension of credit under the Borrowing Documents), the Borrower will use, directly
or indirectly, all of the proceeds of such Advance (or other extension of credit) for the benefit of such Affiliate; and 
  
 (B) Each Obligor will (a) comply with (i) the requirements of all applicable laws, rules, regulations and orders of any governmental authority (including,
laws, rules, regulations and orders relating to taxes, employer and employee contributions, securities, employee retirement and welfare benefits, environmental protection matters, employee health and safety and credit protection, anti-predatory and
fair lending) as now in effect and which may be imposed in the future in all jurisdictions in which such Obligor is now doing business or may hereafter be doing business and (ii) the obligations, covenants and conditions contained in all binding
contracts of such Obligor, as applicable, other than those laws, rules, regulations, orders and provisions of such contracts the noncompliance with which could not be reasonably expected to have, either individually or in the aggregate, a Material
Adverse Effect, and (b) maintain or obtain all licenses, qualifications and permits now held or hereafter required to be held by such Obligor, for which the loss, suspension, revocation or failure to obtain or renew, could reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect. This subsection shall not preclude any Obligor from contesting any taxes or other payments, if they are being diligently contested in good faith in a manner which stays
enforcement thereof and if appropriate expense provisions have been recorded in conformity with GAAP. 
  
 ARTICLE V: DEFAULT; REMEDIES 
  
 Section 5.01 Events of Default. Each of the following events shall constitute an Event of Default hereunder: 
  
 (A) Failure of any Obligor to pay when due any interest on or principal of any Liabilities; or 
  
 (B) Failure of any Obligor to perform any promise or obligation or to satisfy
any condition or liability contained herein, or in any Application, Confirmation or Supplemental Documentation, or the occurrence of a default or an event of default under any Supplemental Documentation; or 
  
 (C) Evidence coming to the attention of the Bank that any representation,
statement, covenant or warranty made or furnished in any manner to the Bank by or on behalf of any Obligor in connection with this Agreement or any Application, Confirmation, Supplemental Documentation, Liabilities or Collateral was false in any
material respect when made or furnished; or 
  

 -14- 

 (D) The issuance of any tax, levy, seizure, attachment, garnishment, levy of execution, or other process
with respect to the Collateral which has not been stayed; or 
  
 (E) Any suspension of payment by any Obligor to any creditor of sums due or the occurrence of any event which results in another creditor having the right to accelerate the maturity of any indebtedness of any Obligor under any security
agreement, indenture, loan agreement, or comparable undertaking; or 
  
 (F) Appointment of a conservator, receiver, or similar official for any Obligor or any subsidiary of any
Obligor, of any Obligor’s property, entry of a judgment or decree adjudicating any Obligor or any subsidiary of any Obligor insolvent or bankrupt or an assignment by any Obligor or any subsidiary of any Obligor for benefit of creditors; or

  
 (G) Sale by any Obligor of all or a material part of any
Obligor’s assets or the taking of any other action by any Obligor to liquidate or dissolve; or 
  
 (H) Termination for any reason of the Borrower’s membership in the Bank, failure of the Borrower to comply with the stock purchase requirements of
the Bank in effect from time to time, or the Borrower’s ceasing to be eligible to become a member of the Bank or any Obligor ceasing to be eligible to pledge Collateral or support the obligations of the Borrower hereunder under the Act, the
Regulations or the Credit and Collateral Policy; or 
  
 (I)
Merger, consolidation or other combination of any Obligor with an entity that is not a member of the Bank if the nonmember entity is the surviving entity; or 
  
 (J) Any Obligor or any of its respective directors or senior officers is criminally indicted or convicted of or under a felony or a crime involving fraud
against or in relation to such Obligor; or 
  
 (K) The Bank
reasonably and in good faith determines that a Material Adverse Effect has occurred. 
  
 Section 5.02 Acceleration; Other Remedies. Upon the occurrence of an Event of Default, in addition to any other remedies provided herein, in any Supplemental Documentation or at law or in equity, the
Bank may at its option, by a notice to the Borrower, declare all or any part(s) of the Liabilities and accrued interest thereon, including any prepayment fees or charges which are applicable thereto, to be immediately due and payable, without
presentment, demand, protest, or any further notice. Furthermore, upon the occurrence of an Event of Default, the Bank shall have all of the rights and remedies provided by applicable law, which shall include, but not be limited to, all of the
remedies of a secured party under the Uniform Commercial Code as in effect in the State of Georgia. In addition, the Bank may take immediate possession of any of the Collateral or any part thereof wherever the same may be found. The Bank may sell,
assign and deliver the Collateral or any part thereof at public or private sale for such price as the Bank deems appropriate without any liability for any loss due to decrease in the market value of the Collateral during the period held. The Bank
shall have the right to purchase all or part of the Collateral at such sale. If the Collateral includes insurance or securities which will be redeemed by the issuer upon surrender, or any accounts or deposits in the possession of the Bank, the Bank
may realize upon such Collateral without notice to any Obligor. If any notification of intended disposition of any of the Collateral is required by applicable law, such notification shall be deemed reasonable and properly given if given 

  

 -15- 

 
as provided by applicable law or in accordance with Section 6.06 hereof at least ten days before any such disposition. The proceeds of any sale shall be
applied in the order that the Bank, in its sole discretion, may choose, subject to applicable law. Each Obligor agrees that the Bank may exercise any and all of its rights of setoff upon the occurrence of an Event of Default. Notwithstanding any
other provision hereof, upon the occurrence of any Event of Default at any time when all or part of the Liabilities shall be the subject of a guarantee by a third party for the Bank’s benefit, and there shall be other outstanding obligations of
any Obligor to the Bank that are not so guaranteed, but that are secured by the Collateral, then any sums realized by the Bank from the Collateral, or from any other collateral pledged or furnished to the Bank by any Obligor under any other
agreement, shall be applied first to the satisfaction of such other nonguaranteed obligations and then to such Obligor’s guaranteed obligations hereunder. Each Obligor agrees to pay all the costs and expenses of the Bank in the collection of
the Liabilities and enforcement of the Bank’s rights and remedies in case of default, including, reasonable attorneys’ fees. The Bank shall, to the extent required by law, apply any surplus, after (i) payment of the Liabilities, (ii)
provision for repayment to the Bank of any amounts to be paid or advanced under Other Credit Products, and (iii) payment of all costs of collection and enforcement, to the claims of person(s) legally entitled thereto, with any remaining surplus paid
to the Borrower. Each Obligor shall be liable to the Bank for any deficiency remaining. 
  
 Section 5.03 Certain Provisions as to Sale of Collateral. The Bank may, from time to time, attempt to sell certain Collateral by means of a private placement. In so doing, the Bank may restrict the
bidders and prospective purchasers to those who will represent and agree that they are purchasing for investment only and not for distribution or otherwise impose restrictions deemed appropriate by the Bank for the purpose of complying with the
requirements of applicable securities laws. The Bank may solicit offers to buy such Collateral, for cash or otherwise, from a limited number of investors deemed by the Bank to be responsible parties who might be interested in purchasing such
Collateral. If the Bank solicits offers from not less than three such investors, then the acceptance by the Bank of the highest offer obtained therefrom (whether or not three offers are obtained) shall be deemed to be a commercially reasonable
method of disposing of the Collateral. 
  
 ARTICLE VI:
MISCELLANEOUS 
  
 Section 6.01 Changes to Credit and
Collateral Policy. The Bank reserves the right to amend, supplement, restate or otherwise modify the Credit and Collateral Policy (each, a “Policy Modification”) at any time, in its sole discretion, without the
consent of any Obligor, and each Obligor hereby (i) acknowledges and agrees that this Agreement shall be deemed to have been amended by each such Policy Modification, (ii) acknowledges and agrees that each such Policy Modification shall apply to all
Advances, Credit Products, Derivative Transactions and Other Products (whether outstanding on the date of such Policy Modification or issued after the date thereof) and (iii) agrees to be bound by each and every Policy Modification occurring on,
prior to, or after the date of this Agreement. Each Policy Modification shall become effective immediately upon adoption by the Bank; provided, however, the Borrower shall have ten days after such effective date to cure any Event of
Default caused by such Policy Modification. The Bank shall provide notice of any Policy Modification by displaying the revised Credit and Collateral Policy on the portion of the Bank’s website accessible to members of the Bank. Notwithstanding
the provisions of this section, the Bank shall not amend, supplement, restate or otherwise modify the terms and conditions of any Advance, Credit Product, Derivative Transaction or Other Product specified in a Confirmation, without the consent of
the Borrower. 
  

 -16- 

 Section 6.02 Assignment. Each Obligor hereby gives the Bank the full right, power and
authority to pledge or assign to any party all or part of the Liabilities, together with all or any part of the Collateral, as security for consolidated Federal Home Loan Bank obligations issued pursuant to the provisions of the Act or for any other
purpose authorized by the Act, the Regulations or the Federal Housing Finance Board. In case of any such pledge or assignment, the Bank shall have no further responsibility with respect to Collateral transferred to the pledgee or assignee. The
Obligors may not (whether voluntarily, involuntarily, by operation of law or otherwise) assign or transfer any or their rights or obligations hereunder or with respect to any Advance, Credit Product, Derivative Transaction or Other Product without
the express prior written consent of the Bank. The Bank may at any time, subject to applicable law, sell, assign, grant participations in, or otherwise transfer to any other person, firm or corporation, including another Federal Home Loan Bank, all
or part of the Liabilities outstanding hereunder. Each Obligor hereby acknowledges and agrees that any such disposition shall give rise to a direct obligation of the Obligor to such assignee, participant or transferee. Each Obligor hereby authorizes
the Bank and each assignee, participant or transferee, in case of default by any Obligor hereunder, to proceed directly, by right of setoff, banker’s lien, or otherwise, against any assets of any Obligor which may at the time of such default be
in the respective hands of the Bank or any such assignee, participant or transferee. Each Obligor further agrees that the Bank may furnish any information pertaining to any Obligor which is in the possession of the Bank to any prospective assignee,
participant or transferee to assist it in evaluating such assignment, participation or transfer provided that any non-public information reasonably designated in writing to the Bank by any Obligor as constituting non-public information shall be
furnished to such prospective assignee, participant or transferee on a confidential basis. Nothing contained herein shall be deemed to grant to any third party any rights hereunder. 
  
 Section 6.03 Discretion of the Bank to Grant or Deny Advances. Nothing contained herein or in any documents
describing the Bank’s credit program and credit policies, including the Credit and Collateral Policy, shall be construed as an agreement or commitment on the part of the Bank to grant Advances or enter into Credit Products, Derivative
Transactions or Other Products. No Obligor, except the Borrower, shall have any right to apply to the Bank for Advances or Credit Products. The right and power of the Bank in its discretion to either grant or deny any Advance, Credit Product,
Derivative Transaction or Other Product requested hereunder is hereby expressly reserved. The determination by the Bank of Lendable Collateral Value and the Collateral Maintenance Level shall not constitute a determination by the Bank that the
Borrower may obtain Advances, Credit Products, Derivative Transactions or Other Products in amounts up to such Lendable Collateral Value and Collateral Maintenance Level. 
  
 Section 6.04 Amendment; Waivers. No modification, amendment or waiver of any provision of this Agreement
(other than the provisions of the Credit and Collateral Policy incorporated by reference herein) or consent to any departure therefrom shall be effective unless in a writing executed by a responsible officer of the party against whom such change is
asserted and shall be effective only in the specific instance and for the purpose of which given. No notice to or demand on any Obligor in any case shall entitle any Obligor to any other or further notice or demand in the same, or similar or other
circumstances. Any forbearance, failure or delay by the Bank in exercising any right, power or remedy hereunder shall not be deemed to be a waiver thereof, and any single or partial exercise by the Bank of any right, power or remedy hereunder shall
not preclude the further exercise thereof. Every right, power and remedy of the Bank shall continue in full force and effect until specifically waived by the Bank in writing. 
  

 -17- 

 Section 6.05 Consent to Jurisdiction. In any action or proceeding brought by the Bank or
any Obligor in order to enforce any right or remedy under this Agreement, the parties hereby consent to, and agree that they will submit to, the nonexclusive jurisdiction of the United States District Court for the Northern District of Georgia or,
if such action or proceeding may not be brought in Federal court, the jurisdiction of the courts of the State of Georgia located in the City of Atlanta. 
  
 Section 6.06 Notices. Except as provided in the last sentence of this Section, any written notice, advice, request, consent or direction
given, made or withdrawn pursuant to this Agreement (other than notice by the Bank of a Policy Modification) shall be in writing, and shall be given by first class mail, postage prepaid, by telecopy or other facsimile transmission, or by private
courier or delivery service. All non-oral notices shall be deemed given when actually received at the principal office of the Bank or the Borrower (for all Obligors), as appropriate. All notices shall be designated to the attention of an office or
section of the Bank or of the Borrower if the Bank or the Borrower has made a request for the notice to be so addressed. Any notice by the Bank to the Borrower-pursuant to Section 3.06 hereof may be oral and shall be deemed to have been duly given
to and received by the Borrower at the time of the oral communication. 
  
 Section 6.07 Signatures of Obligors. For purposes of this Agreement, documents shall be deemed signed by each Obligor when a signature (electronic or manual) of an authorized signatory or an authorized facsimile thereof
appears on the document. The Bank may rely on any signature (electronic or manual) or facsimile thereof which reasonably appears to the Bank to be the signature of an authorized person, including signatures appearing on documents transmitted
electronically to and reproduced mechanically at the Bank. The Secretary or an Assistant Secretary of each Obligor shall from time to time certify to the Bank on forms provided by the Bank the names and specimen signatures of the persons authorized
to apply on behalf of the Borrower to the Bank for Advances and commitments for Advances and otherwise act for and on behalf of the Obligors in accordance with this Agreement. The Obligors shall promptly notify the Bank of any changes to such
certifications, and until receipt of such notice, the Bank shall be authorized to rely on the authorizations in such current certifications. Such certifications are incorporated herein and made a part of this Agreement and shall continue in effect
until expressly revoked or amended in writing by the Obligors, notwithstanding that subsequent certifications may authorize additional persons to act for and on behalf of the Obligors. 
  
 Section 6.08 Applicable Law; Severability. In addition to the terms and conditions specifically set forth
herein and in any Application, Confirmation or Supplemental Documentation, this Agreement and all Advances, Credit Products, Derivative Transactions and Other Products shall be governed by the statutory and common law of the United States and, to
the extent Federal law incorporates or defers to state law, the laws (exclusive of the choice of law provisions) of the State of Georgia. Notwithstanding the foregoing, the Uniform Commercial Code as in effect in the State of Georgia shall be deemed
applicable to this Agreement and any Application, Confirmation and Supplemental Documentation and to any Advance, Credit Product, Derivative Transaction or Other Product and shall govern the attachment and perfection of any security interest granted
hereunder or thereunder. In the event that any portion of this Agreement, or any Application, Confirmation or Supplemental Documentation, conflicts with applicable law, such conflict shall not affect other provisions of this Agreement or such
Application, Confirmation or Supplemental Documentation, which may be given effect without the conflicting provision, and to this end the provisions of this 

  

 -18- 

 
Agreement and any Application, Confirmation and Supplemental Documentation are declared to be severable. 
  
 Section 6.09 Successors and Assigns. This Agreement
shall be binding upon and inure to the benefit of the successors and permitted assigns of the Obligors and the Bank. 
  
 Section 6.10 Entire Agreement. This Agreement, together with any Confirmation or Supplemental Documentation, and any
amendments or addenda thereto executed by the Bank and the Obligors, embody the entire agreement and understanding between the parties hereto relating to the subject matter hereof and supersedes all prior agreements between such parties that relate
to such subject matter. If, prior to the date of this Agreement, the Borrower and the Bank have entered into an Agreement for Advances and Security Agreement with Blanket Floating Lien (as amended) or an Advances, Specific Collateral Pledge and
Security Agreement (each, a “Prior Agreement”), then this Agreement shall amend and restate the Prior Agreement in its entirety as the date hereof. 
  
 Section 6.11 Attorneys’ Fees. Each Obligor
agrees to pay all charges and expenses incurred by Bank (including reasonable attorneys’ fees and expenses) in connection with the administration of the Borrowing Documents, any investigation by Bank in respect of any Borrowing Document, the
enforcement, protection or preservation of any right or claim of Bank, the termination of this Agreement or any other Borrowing Document, the termination of any liens of Bank on the Collateral, or the collection of any amounts due under the
Borrowing Documents. If Bank uses in-house counsel for any of these purposes, each Obligor further agrees that its Liabilities under the Borrowing Documents includes reasonable charges for such work commensurate with the fees that would otherwise be
charged by outside legal counsel selected by Bank for the work performed. 
  
 Section 6.12 Indemnification of the Bank. Each Obligor hereby indemnifies and agrees to defend (with counsel acceptable to the Bank) and hold harmless the Bank and each of its directors,
officers, agents and employees (each, an “Indemnitee”) from and against any liability, loss, cost or expense (including reasonable attorneys’ fees and expenses for both in-house and outside
counsel) incurred in connection with any claim, damage, suit, arbitration, action, proceeding, investigation, pre-filing settlement discussion or negotiation, or any other matter, whenever taking place, and suffered by any one or more of the
Indemnitees (collectively, “Losses”) or in which any one or more of the Indemnitees may ever be or become involved (whether as a party, witness or otherwise), in connection with, or in any way relating to, any Liability, this
Agreement, any Borrowing Document, any Advance, any Credit Product, any Derivative Transaction, or any Other Product and including any Loss (a) arising from any Obligor’s failure to observe, perform or discharge any of its covenants,
obligations, agreements or duties under this Agreement or any other Borrowing Document, (b) arising from the breach of any of the representations or warranties contained in any Borrowing Document, (c) relating to claims of any Person with respect to
any Collateral, or (d) arising from any Obligor’s failure to comply with any federal, state, or local statute, regulation, ordinance or other provision of law; provided, an Indemnitee shall not be indemnified for Losses to the extent they
result solely from the gross negligence or willful misconduct of such Indemnitee. Notwithstanding any contrary provision in any Borrowing Document, obligations of each Obligor under this Section 6.12 shall survive the payment in full of the
Liabilities and the termination of this Agreement. 
  

 -19- 

  
 [Signatures appear on
following page.] 
  

 -20- 

  
 IN WITNESS WHEREOF, Borrower
and Bank have caused this Agreement to be signed in their names by their duly authorized officers as of the date first above mentioned. 
  

					
	COOPERATIVE BANK
		
	 By:
	 	 /s/ Frederick Willetts, III

	 	 	 Name:
	 	 Frederick Willetts, III

	 	 	 Title:
	 	 President

		
	 By:
	 	 /s/ Todd Sammons

	 	 	 Name:
	 	 Todd Sammons

	 	 	 Title:
	 	 Treasurer

	
	FEDERAL HOME LOAN BANK OF ATLANTA
		
	 By:
	 	 /s/ Charles I. Abbitt

	 	 	 Name:
	 	 Charles I. Abbitt

	 	 	 Title:
	 	 Senior Vice President

		
	 By:
	 	 /s/ Randy B. Gonzalez

	 	 	 Name:
	 	 Randy B. Gonzalez

	 	 	 Title:
	 	 First Vice President

  

 -21- 

  
 FEDERAL HOME LOAN BANK
OF ATLANTA 
  
 BORROWER ACKNOWLEDGEMENT 

AND NOTARIZATION 
  

			
	STATE OF North Carolina	  	 
	 	  	 } ss

	County of New Hanover	  	 

  
 On this 23rd
day of November, before me personally came Frederick Willetts, III and Todd Sammons, to me known, who being by me duly sworn, did depose and state that they are the President and Treasurer of Cooperative Bank (the
“Borrower”); and that they are signing their names thereto in my presence by order of the Board of Directors or other governing body of the Borrower and that said Frederick Willetts, III and Todd Sammons
acknowledge the execution of said instrument to be the voluntary act and deed of the Borrower. 
  

	
	
	/s/ Patricia K. O’Quinn
	Notary Public Signature

  

			
	Notary Public in and
	for the State of	 	 North Carolina

 (NOTARY PUBLIC’S SEAL) 
  

			
	 My commission expires: 1-3-07

  

 -22- 

  
 JOINDER AGREEMENT

  
 THIS JOINDER AGREEMENT (the
“Agreement”), dated as of the earlier of the date of execution by the Bank (as hereinafter defined) and November 30, 2004, is among CS&L Real Estate Trust, Inc., a North Carolina corporation, having its
principal place of business at 201 Market Street, Wilmington, NC 28401-4443 (“CSLREIT”), CS&L Holdings, Inc., a Virginia corporation, having its principal place of business at 293 Independence Blvd., Suite 109, Virginia
Beach, VA 23462 (the “Holding Company”; CSLREIT and the Holding Company collectively, the “Affiliate”), Cooperative Bank (the “Borrower”), and the Federal Home Loan Bank of
Atlanta (the “Bank”). The Affiliate wishes to provide security and credit support to the Borrower under the Advances and Security Agreement, dated as of the earlier of the date of execution by the Bank and November 30, 2004,
between the Borrower and the Bank (the “Advances and Security Agreement”). The Bank has agreed to accept such security and credit support of Affiliate subject to the terms and conditions of this Agreement. All of the defined
terms in the Advances and Security Agreement are incorporated herein by reference. 
  
 Accordingly, the Borrower and the Affiliate hereby agree as follows with the Bank: 
  

	 	1.	Each Affiliate hereby acknowledges, agrees and confirms that, by its execution of this Agreement, such Affiliate shall be deemed to be a party to the Advances and Security Agreement
and an “Obligor” as provided therein and shall have all of the obligations of an Obligor thereunder as if it had executed the Advances and Security Agreement originally; provided, however, no Affiliate may apply to the Bank for
direct Advances, Credit Products, Derivative Transactions or Other Products. Each Affiliate hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Advances and Security
Agreement, including, all of the representations, warranties and affirmative and negative covenants of an Obligor set forth therein. 

  

	 	2.	Without limiting the generality of the foregoing terms of paragraph 1, each Affiliate hereby jointly and severally, together with all other Obligors, guarantees to the Bank the
prompt payment and performance of the Liabilities in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise) strictly in accordance with the terms thereof and agrees that if any of such Liabilities are not
paid or performed in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise), such Affiliate shall, jointly and severally together with all other Obligors, promptly pay and perform the same, without any
demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Liabilities, the same shall be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration or
otherwise) in accordance with the terms of such extension or renewal. 

  

	 	3.	As security for all Liabilities, each Affiliate hereby assigns, transfers and pledges to the Bank, and grants to the Bank a security interest in, the following Collateral:

  
 (i) All property heretofore
assigned, transferred or pledged by such Affiliate to the Bank as collateral securing Liabilities and other obligations of the 

  

 
Obligors prior to the date hereof, (ii) all of the Residential First Mortgage Collateral, Commercial Mortgage Collateral, Multifamily Mortgage Collateral,
HELOC and Second Mortgage Collateral, Government and Agency Securities Collateral, Other Securities Collateral, and Other Collateral, now or hereafter owned by the Affiliate, specifically identified by such Affiliate to the Bank as Qualifying
Collateral and accepted by the Bank, and all proceeds and products of any items of the Collateral described in clauses (i) and (ii) above. 
  

	 	4.	Each Affiliate shall furnish the following to the Bank: 

  
 (i) Within 90 days after the end of each fiscal year of the Cooperative Bankshares, Inc., a North Carolina corporation having its
principal place of business at 201 Market Street, Wilmington, NC 28401 (“Cooperative”), Cooperative’s audited consolidated and consolidating balance sheet and related statement of operations, shareholders’ equity
and cash flows as of the end of and for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by nationally-recognized independent accountants (without qualification or exception)
that such financial statements present fairly in all material respects the financial condition and results of operations of Cooperative in accordance with GAAP. 
  
 (ii) Within 45 days after the end of each fiscal quarter of an Affiliate pledging collateral to the Bank
pursuant to this Agreement, such Affiliate’s consolidated and consolidating balance sheet and related statement of operations, as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each
case in comparative form the figures for the corresponding period or periods (or, in the case of the balance sheet, as of the end) of the previous fiscal year, all certified by such Affiliate’s chief financial officer as presenting fairly in
all material respects the financial condition and results of operations of such Affiliate in accordance with GAAP, subject to normal year-end audit adjustments and the absence of footnotes. 
  
 (iii) Together with the audited annual financial statements
delivered pursuant to clause (i) above, and together with the quarterly financial statements delivered pursuant to clause (ii) above, the Affiliate shall deliver to the Bank a certificate of its chief financial officer, in form and substance
satisfactory to the Bank, (a) stating that such officer has reviewed the relevant terms of the Borrowing Documents, and has made (or caused to be made under such officer’s supervision) a review of the transactions and conditions of the
Affiliate from the beginning of the accounting period covered by the income statements being delivered to the date of the certificate, and that such review has not disclosed the existence during such period of any fact, event or circumstance that
constitutes an Event of Default or that is then, or with the passage of time or giving of notice or both, could become an Event of Default, and if any such condition or event existed during such period or now exists, specifying the nature and period
of existence thereof and what action the Affiliate has taken or proposes to take with respect thereto; and (b) certifying and demonstrating that the Affiliate remains solvent as of the date of such certificate. 
  

 -2- 

 (iv) Promptly thereafter, copies of all notices, reports, correspondence and other
materials filed by the Affiliate with any governmental authority, and any other information known to the Affiliate which could reasonably be expected to have a Material Adverse Effect on the operations, business, or financial condition of the
Affiliate. 
  

	 	5.	Notwithstanding any provision to the contrary contained herein or in the Advances and Security Agreement, to the extent the obligations of any Affiliate shall be adjudicated to be
invalid or unenforceable for any reason (including, because of any applicable state of federal law relating to fraudulent conveyances or transfers) then the obligations of such Affiliate hereunder shall be limited to the maximum amount that is
permissible under applicable law (whether federal or state and including, the United States Bankruptcy Code). 

  

	 	6.	Each Affiliate agrees that to the extent that any Obligor shall make a payment or a transfer of an interest in any property to the Bank, which payment or transfer or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential, or otherwise is avoided, and/or required to be repaid to any Obligor, the estate of any Obligor, a trustee, receiver or any other party under any bankruptcy law, state
or federal law, common law or equitable cause, then to the extent of such avoidance or repayment, the obligation or part thereof intended to be satisfied shall be revived and continued in full force and effect as if said payment had not been made.

  

	 	7.	The liability of each Affiliate hereunder is exclusive and independent of any other security for the Liabilities; a separate action or actions may be brought and prosecuted against
each Affiliate whether or not action is brought against any other guarantor or Obligor and whether or not any other guarantor or Obligor is joined in any such action or actions; and each Affiliate’s liability hereunder shall not be affected or
impaired by (a) any direction as to application of payment by any Obligor or by any other party, or (b) any other continuing or other guaranty, undertaking or maximum liability of a guarantor or of any other party as to the Liabilities, or (c) any
payment on or reduction of any such other guaranty or undertaking, or (d) any dissolution, termination or increase, decrease or change in personnel by any Obligor, or (e) any payment made to the Bank on the Liabilities which the Bank repays to any
Obligor pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and each Affiliate waives any right to the deferral or modification of its obligations hereunder by reason of any such
proceeding. 

  

	 	8.	 Each Affiliate authorizes the Bank without consent of such Affiliate or notice or demand (except as shall be required by applicable statute and cannot be waived),
and without affecting or impairing its liability hereunder, from time to time to (a) make additional Advances to the Borrower, and enter into agreements for Credit Products and Other Products and Derivative Transactions with the Borrower, (b) change
the terms of the Liabilities or any part thereof, solely with the consent of the Borrower, (c) take and hold security from any other guarantor or any other party for the payment of this guaranty or the Liabilities and exchange, enforce waive and
release any such security, and apply such security and direct the order or manner of sale 

  

 -3- 

	 	 
thereof as the Bank in its discretion may determine and (d) release or substitute any one or more endorsers, guarantors or Obligors.

  

	 	9.	It is not necessary for the Bank to inquire into the capacity or powers of any Obligor or Affiliate or the officers, directors, members, partners or agents acting or purporting to
act on its behalf, and any Liabilities made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder. 

  

	 	10.	Each Affiliate waives any right (except as shall be required by applicable statute and cannot be waived) to require the Bank to (i) proceed against any Obligor, any other guarantor
or any other party, (ii) proceed against or exhaust any security held from any Obligor, any other guarantor or any other party, or (iii) pursue any other remedy in the Bank’s power whatsoever. Each Affiliate waives any defense based on or
arising out of any defense of any Obligor, any other guarantor or any other party other than payment in full of the Liabilities, including, any defense based on or arising out of the disability of any Obligor, any other guarantor or any other party,
or the unenforceability of the Liabilities or any part thereof from any cause, or the cessation from any cause of the liability of any Obligor other than payment in full of the Liabilities. The Bank may, at its election, foreclose on any security
held by the Bank by one or more judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable (to the extent such sale is permitted by applicable law), or exercise any other right or remedy the Bank may have
against any Obligor or any other party, or any security, without affecting or impairing in any way the liability of any Affiliate hereunder except to the extent the Liabilities have been paid. Each Affiliate waives any defense arising out of any
such election by the Bank, even though such election operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of such Affiliate against any Obligor or any other party or any security.

  
 Each Affiliate waives all presentments, demands
for performance, protests and notices, including, notices of nonperformance, notice of protest, notices of dishonor, notices of acceptance of this guaranty, and notices of the existence, creation or incurring of new or additional Liabilities. Each
Affiliate assumes all responsibility for being and keeping itself informed of the other Obligors’ financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Liabilities and the nature, scope and
extent of the risks which such Affiliate assumes and incurs hereunder, and agrees that the Bank shall not have any duty to advise the Affiliate of information known to it regarding such circumstances or risks. 
  
 EACH AFFILIATE HEREBY EXPRESSLY WAIVES AND SURRENDERS ANY DEFENSE TO ITS
LIABILITY UNDER THIS AGREEMENT BASED UPON ANY OF THE FOREGOING ACTS, OMISSIONS, AGREEMENTS, WAIVERS OR MATTERS AND EXPRESSLY WAIVES THE BENEFITS OF O.C.G.A. §§10-7-2, 10-7-21, 10-7-22, 10-7-23 AND 10-7-24. IT IS THE PURPOSE AND INTENT OF
THIS AGREEMENT THAT THE OBLIGATIONS OF EACH AFFILIATE HEREUNDER SHALL BE ABSOLUTE AND UNCONDITIONAL UNDER ANY AND ALL CIRCUMSTANCES. 
  

 -4- 

 Each Affiliate hereby agrees it shall not exercise, and irrevocably waives, any lights of subrogation
which it may at any time otherwise have as a result of this guaranty (whether contractual, under Section 509 of the United States Bankruptcy Code, or otherwise) to the claims of the Bank against the Obligors or any other guarantor of the Liabilities
(collectively, the “Other Parties”) and all contractual, statutory or common law rights of reimbursement, contribution or indemnity from any Other Party which it may at any time otherwise have as a result of
this guaranty. Each Affiliate hereby further agrees not to exercise any right to enforce any other remedy which the Bank now has or may hereafter have against any Other Party, any endorser or any other guarantor of all or any part of the Liabilities
and any benefit of, and any right to participate in, any security or collateral given to or for the benefit of the Bank to secure payment of the Liabilities. 
  

	 	11.	Each Affiliate hereby grants to the Bank a continuing security interest in, and a right of set off against any and all right, title and interest of such Affiliate in and to its
Collateral. 

  

	 	12.	Each Affiliate acknowledges and confirms that it has received a copy of the Advances and Security Agreement and has reviewed and understands such Advances and Security Agreement.

  

	 	13.	The Borrower and each Affiliate hereby agree that the Liabilities shall have priority in right and remedy over any indebtedness or other obligations, whenever made and however
evidenced, by such Borrower or Affiliate to the Borrower or any other affiliate (“Intercompany Indebtedness”). The Borrower hereby subordinates the lien securing any Intercompany Indebtedness and any security
arrangements with respect to Intercompany Indebtedness to the lien of this Agreement securing the Liabilities. 

  

	 	14.	Each Obligor hereby represents and warrants that, as of the date hereof, the date of each Advance, Credit Product, Derivative Transaction or Other Product, and the date of delivery
of each collateral report required under Section 3.06(A) of the Advances and Security Agreement: 

  
 (i) (a) Each Affiliate has received valuable consideration, fair value, fair consideration or reasonably equivalent value for entering
into this Agreement and (b) the performance by such Affiliate of its obligations hereunder shall not render such Affiliate insolvent, reduce such Affiliate’s capital to an unreasonably small amount or reduce such Affiliate’s assets to an
amount less than that necessary to conduct its business, or cause such Affiliate to have incurred debts (or to have intended to have incurred debts) beyond its ability to pay such debts as they mature. 
  
 (ii) The Borrower owns directly or indirectly 100% of the
voting and other equity interests in each Affiliate (provided, however, that any such Affiliate which is a real estate investment trust (a “REIT”) may issue preferred equity to the greater of (x) up to 120
shares of preferred equity to up to 120 employees of the Borrower or such Affiliate and (y) in an amount not to exceed that which is necessary to qualify as a REIT under the Internal Revenue Code of 1986, as 

  

 -5- 

 
amended). With respect to holders of certificates evidencing preferred equity interests in each Affiliate that have been issued prior to the date of this
Agreement (the “Previously-Issued Preferred Certificates”), each Affiliate has provided written notice to such holders that certain of the Affiliate’s assets have been and may from time to time in the future be pledged
to the Bank pursuant to this Agreement. Each certificate evidencing such voting, preferred and other equity interests in each Affiliate (other than the Previously-Issued Preferred Certificates) contains, and will continue to contain, a legend as set
forth below prohibiting the transfer thereof in violation of this provision. 
  
 Form of Legend: 
  
 THE SHARES
REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, ASSIGNED, CONVEYED, PLEDGED OR OTHERWISE TRANSFERRED IN VIOLATION OF SECTION 14(ii) OF THAT CERTAIN JOINDER AGREEMENT WITH THE FEDERAL HOME LOAN BANK OF ATLANTA, AS THE SAME MAY BE AMENDED, RESTATED,
SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME. ANY PURPORTED SALE, ASSIGNMENT, CONVEYANCE, PLEDGE OR OTHER TRANSFER OF SHARES IN VIOLATION OF SAID AGREEMENT SHALL BE VOID AB INITIO AND OF NO FORCE OR EFFECT. 
  
 (iii) No Affiliate is liable for Borrowed Money to any
Person, except the Bank and the Borrower. 
  
 (iv) The Collateral pledged by each Affiliate hereunder was previously owned by the Borrower and was transferred to such Affiliate subject to the preexisting security interest of the Bank. Each Affiliate acknowledges that the consent of the
Bank was required prior to such transfer and that in consideration of such consent and in exchange therefor, such Affiliate hereby agrees and confirms that the security and collateral interest of the Bank in the Collateral shall secure all existing
and future Liabilities, however and whenever arising. 
  

	 	15.	Until the termination of this Agreement and the indefeasible satisfaction in full of all of the Liabilities: 

  
 (i) No Affiliate will incur or permit to exist any liability
for Borrowed Money to any Person, except the Bank and the Borrower. 
  
 (ii) No Affiliate will directly or indirectly: (a) amend, modify or waive any term or provision of its organizational documents, including its articles of incorporation, certificates of designations pertaining to
preferred stock, by-laws, partnership agreement or operating agreement unless required by law; (b) enter into any transaction of merger or consolidation; (c) liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution); or (d)
acquire by purchase or otherwise all or any substantial part of the business or assets of any other Person. 
  

 -6- 

 (iii) No Affiliate will directly or indirectly enter into or permit to exist any
transaction (including the purchase, sale, lease or exchange of any property or the rendering of any management, consulting, investment banking, advisory or other similar services) with any affiliate of such Affiliate (other than the Borrower) or
with any director, officer or employee of any Obligor, except (a) transactions in the ordinary course of and pursuant to the reasonable requirements of the business of such Affiliate and upon fair and reasonable terms which are no less favorable to
such Affiliate than would be obtained in a comparable arm’s length transaction with a Person that is not an affiliate of such Affiliate, and (b) payment of reasonable compensation to directors, officers and employees for services actually
rendered to such Affiliate. 
  

	 	16.	The Borrower confirms that all of its obligations under the Advances and Security Agreement are, and upon each Affiliate becoming a party to such Advances and Security Agreement,
shall continue to be, in full force and effect. The parties hereto confirm and agree that immediately upon each Affiliate becoming a party to the Advances and Security Agreement the term “Liabilities,” as used in the Advances and Security
Agreement, shall include all obligations of each Affiliate from time to time under the Advances and Security Agreement. 

  

	 	17.	Each Affiliate agrees that at any time and from time to time, upon the written request of the Bank, it will execute and deliver such further documents and do such further acts and
things as the Bank may reasonably request in order to effect the purposes of this Agreement. 

  

	 	18.	This Agreement may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute one contract.

  

	 	19.	This Agreement shall be governed by and construed and interpreted in accordance with the laws (exclusive of the choice of law provisions) of the State of Georgia.

  
 [Signatures appear on following page.]

  

 -7- 

  
 IN WITNESS WHEREOF, each of
the parties hereto has caused this Agreement to be duly executed by its authorized officers, as of the day and year first above written. 
  

			
	COOPERATIVE BANK
		
	 By:
	 	 /s/ Frederick Willetts, III

	 Name:
	 	 Fredrick Willetts, III

	 Title:
	 	 President

		
	 By:
	 	 /s/ Todd Sammons

	 Name:
	 	 Todd Sammons

	 Title:
	 	 Treasurer

	
	CS&L REAL ESTATE TRUST, INC.
		
	 By:
	 	 /s/ Frederick Willetts, III

	 Name:
	 	 Fredrick Willetts, III

	 Title:
	 	 President

		
	 By:
	 	 /s/ Todd Sammons

	 Name:
	 	 Todd Sammons

	 Title:
	 	 Treasurer

	
	CS&L HOLDINGS, INC.
		
	 By:
	 	 /s/ Frederick Willetts, III

	 Name:
	 	 Fredrick Willetts, III

	 Title:
	 	 President

		
	 By:
	 	 /s/ Todd Sammons

	 Name:
	 	 Todd Sammons

	 Title:
	 	 Treasurer

	
	FEDERAL HOME LOAN BANK OF ATLANTA
		
	 By:
	 	 /s/ Charles I. Abbitt

	 Name:
	 	 Charles I. Abbitt

	 Title:
	 	 Senior Vice President

		
	 By:
	 	 /s/ Randy B. Gonzalez

	 Name:
	 	 Randy B. Gonzalez

	 Title:
	 	 First Vice President

  

 -8-

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