Document:

EX-4.1

 Exhibit 4.1 

 

	
	

 INCORPORATED UNDER THE LAWS OF THE STATE OF NORTH CAROLINA 

CERTIFICATE NO. NUMBER OF SHARES 

A- 
 Yadkin Valley 
 Financial Corporation

 Mandatorily Convertible Cumulative Non-Voting Perpetual 

Preferred Stock, Series A 

REGISTERED OWNER: 
 COUNTERSIGNED AND REGISTERED 
 REGISTRAR
AND TRANSER COMPANY (CRANFORD, NJ) TRANSFER AGENT AND REGISTRAR BY 
 This Certifies that the
registered owner whose name is inscribed hereon is the owner of the number or shares of the fully paid and non-assessable shares of the Mandatorily Convertible Cumulative Non-Voting Perpetual Preferred Stock, Series A NO PAR VALUE transferable on
the books of the Corporation in person or by duly authorized Attorney upon surrender of this Certificate properly endorsed. The Corporation will furnish to a Shareholder upon request and without charge a full statement of the designation, relative
rights, preferences and limitations of the shares of each class authorized to be issued. 
 IN
WITNESS WHEREOF, the said Corporation has caused this Certificate to be signed by its duly authorized officers and sealed with the Seal of the Corporation. 
 AUTHORIZED SIGNATURE 
 Dated: 

Patricia H. Wooten 
 PATRICIA H. WOOTEN, SECRETARY 
 Joseph H.
Towell 
 JOSEPH H TOWELL, Chief Executive Officer 

Yadikin Valley Financial Corporation 

SEAL 
 No Par Value 
 State of North Carolina

 The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full according to applicable laws or regulations: 
  

																	
	TEM COM	  	–	  	as tenants in common	  		  	UNIF GIFT MIN ACT –    	  	 	  	Custodian	  	 	  	
	TEM ENT	  	–	  	as tenants by the entireties	  		  		  	(Cust)	  		  	(Minor)	  	

 
																	
	JT TEN	  	  –	  	as joint tenants with right of	  		  	 Under Uniform Gifts to Minors	  	

 
																	
		  		  	    survivorship and not as tenants	  		  	  Act 	  	 	  	
		  		  	    in common	  		  		  	(State)	  	

  
 Additional abbreviations may also
be used though not in the above list. 
  
 For
Value Received,
                                         
                                         
                                         
                                  hereby sell, assign and transfer unto

  

							
	 PLEASE INSERT SOCIAL SECURITY OR OTHER
 IDENTIFYING NUMBER OF ASSIGNEE
	  		  		  	
	 			
	 	  		  		  	

  

			
	  

	(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
	
	  

	
	  

		
	  
	  	Shares
	of the Capital Stock represented by the within Certificate, and do hereby irrevocably constitute and appoint	  	
		
	  
	  	Attorney
	to transfer the said Stock on the books of the within named Corporation with full power of substitution in the premises.	  	

  

					
	Dated	 	  
	 	
		 		 	  
  

		 	NOTICE	 	 THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT
OR ANY CHANGE WHATSOEVER.

		 	SIGNATURE(S) GUARANTEED:	 	  
  

 

		 		 	 THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP
IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.

  
 THESE SECURITIES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT (PROVIDED THAT THE TRANSFEROR PROVIDES THE COMPANY WITH REASONABLE
ASSURANCES (IN THE FORM A SELLER REPRESENTATION LETTER AND, IF APPLICABLE, A BROKER REPRESENTATION LETTER) THAT THE SECURITIES MAY BE SOLD PURSUANT TO SUCH RULE). NO REPRESENTATION IS MADE BY THE ISSUER AS TO THE AVAILABILITY OF THE EXEMPTION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR RESALES OF THESE SECURITIES. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES IF THE PLEDGEE AGREES IN WRITING TO BE BOUND BY THE TRANSFER RESTRICTIONS TO WHICH THE PLEDGOR IS SUBJECT.EX-10.1

 Exhibit 10.1 

SECURITIES PURCHASE AGREEMENT 

This Securities Purchase Agreement (this “Agreement”) is dated as of October 23, 2012,
by and among Yadkin Valley Financial Corporation, a North Carolina corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser”
and collectively, the “Purchasers”). 
 RECITALS 

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

B.        Each Purchaser, severally and not jointly, wishes to
purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, that aggregate number of shares of the Company’s mandatorily convertible cumulative non-voting perpetual preferred stock, Series A, $1,000.00
liquidation preference per share (the “Preferred Stock”), set forth below such Purchaser’s name on the signature page of this Agreement (which aggregate amount for all Purchasers together shall be 45,000 shares of
Preferred Stock (the “Preferred Shares”). When purchased, the Preferred Stock will have the terms set forth in the articles of amendment for the Preferred Stock to be issued to the Purchasers in the form attached as Exhibit A
hereto (the “Articles of Amendment”) which is made a part of the Company’s Articles of Incorporation, as amended (the “Articles of Incorporation”), by the filing of the Articles of Amendment with the North
Carolina Department of the Secretary of the State (the “Secretary of State”). The Preferred Stock will be convertible into shares of the Company’s voting common stock, $1.00 par value (the “Common Stock”)
subject to and in accordance with the terms and conditions of the Articles of Amendment. The Shares of Common Stock into which the Preferred Stock are convertible is referred to herein as the “Underlying Shares” and the Underlying
Shares and the Preferred Shares are referred to herein, collectively, as the “Securities”. 
 C.        The Company has engaged Keefe, Bruyette & Woods, Inc. as its exclusive placement agent (the “Placement Agent”) for the offering
of the Securities. 
 D.        Contemporaneously with
the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights Agreement, substantially in the form attached hereto as Exhibit B (the “Registration Rights Agreement”),
pursuant to which, among other things, the Company will agree to provide certain registration rights with respect to the Securities under the Securities Act and the rules and regulations promulgated thereunder and applicable state securities
laws. 
 E.        On or about the date of this
Agreement, the Company is executing a separate share exchange agreement (the “TARP Exchange”) for the exchange of shares of the Company’s Fixed Rate Cumulative Perpetual Preferred Stock, Series T (the “Series T
Preferred Stock”) and shares of the Company’s Fixed Rate Cumulative Perpetual Preferred Stock, Series T-ACB (the “Series T-ACB Preferred Stock”) into an aggregate of 5,159,943 shares of the Common Stock and 1,965,000
shares of the Company’s non-voting common stock, $1.00 par value (the “Non-Voting Common Stock”). 
 NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company
and the Purchasers hereby agree as follows: 

 ARTICLE 1: 

DEFINITIONS 
 1.1        Definitions.    In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the
following terms shall have the meanings indicated in this Section 1.1: 
 “Action” means
any action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition) or investigation pending or, to the Company’s Knowledge, threatened in writing against the Company, any Subsidiary or any of
their respective properties or any officer, director or employee of the Company or any Subsidiary acting in his or her capacity as an officer, director or employee before or by any federal, state, county, local or foreign court, arbitrator,
governmental or administrative agency, regulatory authority, stock market, stock exchange or trading facility. 

“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one
or more intermediaries, Controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act. 

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

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

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

“Bank” has the meaning set forth in Section 3.1(a). 

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

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

“Business Day” means a day, other than a Saturday or Sunday, on which banks in New York City are open
for the general transaction of business. 
 “CIBCA” has the meaning set forth in
Section 2.1(a). 
 “Closing” has the meaning set forth in Section 2.1(b). 

“Closing Date” means October 24, 2012, or such other date as the parties may agree. 

“Code” means the Internal Revenue Code of 1986, as amended, including the regulations and published
interpretations thereunder. 
 “Commission” has the meaning set forth in the Recitals.

 “Common Stock” has the meaning set forth in the Recitals, and also includes any securities
into which the Common Stock may hereafter be reclassified or changed. 
 “Company Deliverables”
has the meaning set forth in Section 2.2(a). 
 “Company Counsel” means Nelson Mullins
Riley & Scarborough, LLP. 

  
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 “Company Reports” has the meaning set forth in
Section 3.1(kk). 
 “Company’s Knowledge” means with respect to any statement made to
the knowledge of the Company, that the statement is based upon the actual knowledge of the officers of the Company having responsibility for the matter or matters that are the subject of the statement after due inquiry. 

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

“DTC” means The Depository Trust Company. 

“Effectiveness Date” has the meaning set forth in Section 6.16. 

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

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder. 
 “ERISA Affiliate”, as applied to the Company,
means any Person under common control with the Company, who together with the Company, is treated as a single employer within the meaning of Section 414(b), (c), (m) or (o) of the Code. 

“Escrow Agent” has the meaning set forth in Section 2.1(b). 

“Escrow Agreement” has the meaning set forth in Section 2.1(b). 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the
rules and regulations promulgated thereunder. 
 “FDIC” means the Federal Deposit Insurance
Corporation. 
 “FRB” means the Board of Governors of the Federal Reserve System. 

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

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

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

“Lien” means any lien, charge, claim, encumbrance, security interest, right of first refusal, preemptive
right or other restrictions of any kind. 
 “Material Adverse Effect” means any of (i) a
material and adverse effect on the legality, validity or enforceability of this Agreement, the Registration Rights Agreement, the Articles of Amendment, or the Escrow Agreement (ii) a material and adverse effect either occurred or the Company
has reason to believe will occur on the results of operations, assets, properties, business, condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) any adverse impairment to the Company’s ability
to perform in any material respect on a timely basis its obligations under this Agreement, the Registration Rights Agreement, the Articles of Amendment or the Escrow Agreement; 

  
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 provided, that in determining whether a Material Adverse Effect has occurred, there shall be excluded any effect to the extent resulting from the following: (A) changes, after
the date hereof, in U.S. GAAP or regulatory accounting principles generally applicable to banks, savings associations or their holding companies, (B) changes, after the date hereof, in applicable laws, rules and regulations or interpretations
thereof by any court, administrative agency or other governmental authority, whether federal, state, local or foreign, or any applicable industry self-regulatory organization, (C) actions or omissions of the Company expressly required by the
terms of this Agreement or taken with the prior written consent of an affected Purchaser, (D) changes, after the date hereof, in general economic, monetary or financial conditions, (E) changes in the market price or trading volumes of the
Common Stock (but not the underlying causes of such changes), (F) changes in global or national political conditions, including the outbreak or escalation of war or acts of terrorism and (G) the public disclosure of this Agreement or the
transactions contemplated hereby; except, with respect to clauses (A), (B), (D) and (F), to the extent that the effects of such changes have a disproportionate effect on the Company and the Subsidiaries, taken as a whole, relative to other
similarly situated banks, savings associations or their holding companies generally. 
 “Material
Contract” means any contract of the Company that was, or was required to be, filed as an exhibit to the SEC Reports pursuant to Item 601 of Regulation S-K. 

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

“Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of
ERISA to which the Company or any ERISA Affiliate is making, or is accruing an obligation to make, contributions or has made, or been obligated to make, contributions within the preceding six (6) years. 

“NASDAQ” means the NASDAQ Global Select Market. 

“NCCOB” North Carolina Commissioner of Banks. 

“New Security” has the meaning set forth in Section 4.16. 

“New York Court” has the meaning set forth in Section 6.8. 

“Non-Voting Common Stock” has the meaning set forth in the Recitals. 

“NYSE” means the New York Stock Exchange. 

“Outside Date” means October 30, 2012. 

“Pension Plan” means any employee pension benefit plan within the meaning of Section 3(2) of ERISA,
other than a Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA and which (i) is maintained for employees of the Company or any of its ERISA Affiliates or
(ii) has at any time during the last six (6) years been maintained for the employees of the Company or any current or former ERISA Affiliate. 
 “Person” means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship,
unincorporated organization or governmental authority. 
 “Placement Agent” has the meaning set
forth in the Recitals. 

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

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

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

“Purchase Price” means $1,000.00 per Preferred Share. 

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

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

“Registration Statement” means a registration statement meeting the requirements set forth in the
Registration Rights Agreement and covering the resale by the Purchasers of the Registrable Securities (as defined in the Registration Rights Agreement). 
 “Regulation D” has the meaning set forth in the Recitals. 
 “Regulatory Agreement” has the meaning set forth in Section 3.1(mm). 
 “Required Approvals” has the meaning set forth in Section 3.1(e). 
 “Response Period” has the meaning set forth in Section 4.16. 
 “Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted
by the Commission having substantially the same effect as such Rule. 
 “SEC Reports” has the
meaning set forth in Section 3.1(h). 
 “Secretary of State” has the meaning set forth in
the Recitals. 
 “Secretary’s Certificate” has the meaning set forth in
Section 2.2(a)(v). 
 “Securities” has the meaning set forth in the Recitals. 

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

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

“Series T-ACB Preferred Stock” has the meaning set forth in the Recitals. 

“Shareholder Approvals” has the meaning set forth in Section 4.11. 

“Shareholder Proposals” has the meaning set forth in Section 4.11. 

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

 “Subscription Proposals” has the meaning set forth in Section 4.16. 

“Subsidiary” means any entity in which the Company, directly or indirectly, owns sufficient capital
stock or holds a sufficient equity or similar interest such that it is consolidated with the Company in the financial statements of the Company. 
 “TARP Exchange” has the meaning set forth in the Recitals. 
 “Trading Day” means (i) a day on which the Common Stock is listed or quoted and traded on its Principal Trading Market (other than the OTC Bulletin Board), or (ii) if the Common
Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is not quoted on any
Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported in the “pink sheets” by OTC Markets Group Inc. (or any similar organization or agency succeeding to its functions of reporting prices);
provided, that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day. 

“Trading Market” means whichever of the NASDAQ Global Select Market, the NASDAQ Global Market, the
NASDAQ Capital Market, the NYSE, the NYSE MKT, or the OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date in question. 
 “Transaction Documents” means this Agreement, the schedules and exhibits attached hereto, the Registration Rights Agreement, the Articles of Amendment, the Escrow Agreement and any other
documents or agreements executed in connection with the transactions contemplated hereunder. 

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

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

ARTICLE 2: 
 PURCHASE AND SALE 

2.1      Closing. 

(a)        Purchase of Preferred Shares.    Subject
to the terms and conditions set forth in this Agreement, at the Closing the Company shall issue and sell to each Purchaser, and each Purchaser shall, severally and not jointly, purchase from the Company, the number of Preferred Shares set forth
below such Purchaser’s name on the signature page of this Agreement at a per Preferred Share price equal to the Purchase Price. Notwithstanding the above, no Purchaser shall be obligated to purchase any Preferred Shares to the extent such
purchase (assuming conversion of the Preferred Shares) would result in such Purchaser, together with its Affiliates and any other Persons with which it is acting in concert or whose holdings would otherwise be required to be aggregated with such
Purchaser’s holdings for purposes of the BHCA or the Change in Bank Control Act (“CIBCA”), directly or indirectly collectively owning or controlling (or being deemed to own or control) shares of Common Stock exceeding (i) 9.9% of
the number of shares of Common Stock issued and outstanding or (ii) 14.0% of the aggregate number of shares of Common Stock and Non-Voting Common Stock issued and outstanding. 

  
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 (b)      Escrow.  On or
prior to 10:00 a.m. New York City time on the Closing Date, (i) each Purchaser has (A) deposited the Subscription Amount with SunTrust Bank as Escrow Agent (the “Escrow Agent”), pursuant to that certain Escrow
Agreement (in the form attached hereto as Exhibit H) between the Company and Escrow Agent (as it may be amended or otherwise modified from time to time, the “Escrow Agreement”), and (ii) the Company has issued
instructions to the Transfer Agent authorizing the issuance in certificated form of the number of Preferred Shares specified on such Purchaser’s signature page hereto (the “Stock Certificates”), or as otherwise set forth
on the Stock Certificate Questionnaire included as Exhibit C-2 hereto concurrent with the Escrow Agent’s release of the Subscription Amount to the Company pursuant to the Escrow Agreement. 

(c)      Closing Date. 

(i)          The Closing of the purchase and sale of
the Preferred Shares shall take place at 10:00 a.m., New York City time, at the offices of Company Counsel, on the Closing Date or remotely by facsimile transmission or other electronic means or at such other time or location as the parties may
mutually agree, but not later than the Outside Date. The “Closing” means the release of funds and issuance by the Company of Preferred Shares as contemplated hereby, all of which shall be deemed to have happened concurrently. 

(ii)          Pursuant to the terms of the Escrow
Agreement, on the Closing Date, the Escrow Agent shall release the Subscription Amount to the Company and the Transfer Agent shall issue the Preferred Shares to each Purchaser as provided in the instructions referred to in paragraph (b) above.

 2.2      Closing Deliveries. 

(a)      On or prior to the Closing, the Company shall issue, deliver or cause to be
delivered to each Purchaser (unless otherwise indicated) the following (the “Company Deliverables”): 
 (i)           this Agreement, duly executed by the Company; 

(ii)          the Company shall cause the Transfer Agent to issue, in
book-entry form the number of Preferred Shares specified on such Purchaser’s signature page hereto (or, if the Company and such Purchaser shall have agreed, as indicated on such Purchaser’s signature pages hereto, that such Purchaser will
receive Stock Certificates for their Preferred Shares, then the Company shall instead instruct the Transfer Agent to issue such specified Stock Certificates registered in the name of such Purchaser or as otherwise set forth on the Stock Certificate
Questionnaire); 
 (iii)          a legal
opinion of Company’s Counsel, dated as of the Closing Date and in the form attached hereto as Exhibit D executed by such counsel and addressed to the Purchasers; 

(iv)          the Registration Rights Agreement, duly
executed by the Company (which shall be delivered on the date hereof); 

  
 7 

(v)         the Escrow Agreement duly executed by the
Company and the Escrow Agent (which shall be delivered on the date hereof); 

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

(vii)      the Compliance Certificate referred to in Section 5.l(f).

 (b)        Each Purchaser shall deliver or cause to be delivered to
the Company or the Escrow Agent, as applicable, on or prior to the Closing Date, the following (the “Purchaser Deliverables”): 

(i)         this Agreement, duly executed by such
Purchaser; 
 (ii)        the Registration Rights
Agreement, duly executed by such Purchaser; 
 (iii)       a
fully completed and duly executed Accredited Investor Questionnaire, reasonably satisfactory to the Company, and the Stock Certificate Questionnaire in the forms attached hereto as Exhibits C-1 and C-2 , respectively; and 

(iv)       its Subscription Amount, in United States dollars and in
immediately available funds, in the amount indicated below such Purchaser’s name on the applicable signature page hereto under the heading “Aggregate Purchase Price (Subscription Amount)” by wire transfer to the Escrow Account in
accordance with the Escrow Agent’s written instructions. 
 ARTICLE 3: 

REPRESENTATIONS AND WARRANTIES 
 3.1      Representations and Warranties of the Company.    The Company hereby represents and warrants as of the date hereof and as of the Closing
Date (except for the representations and warranties that speak as of a specific date, which shall be made as of such date), to each of the Purchasers that: 
 (a)        Subsidiaries.    The Company has no direct or indirect Subsidiaries other than as set forth in Exhibit G. The Company
owns, directly or indirectly, all of the capital stock (except for any preferred securities issued by Subsidiaries that are trusts) or comparable equity interests of each Subsidiary free and clear of any and all Liens, and all the issued and
outstanding shares of capital stock or comparable equity interest of each Subsidiary are validly issued and are fully paid, non-assessable (to the extent such concept is applicable to an equity interest of a Subsidiary) and free of preemptive and
similar rights to subscribe for or purchase securities. No equity security of any Subsidiary is or may be required to be issued by reason of any option, warrant, script, preemptive right, right to subscribe to, gross-up right, call or commitment of
any character whatsoever relating to, or security or right convertible into, shares of any capital stock of such Subsidiary, and there are no contracts, commitments, understandings or arrangements by which any Subsidiary is bound to issue additional
shares of its capital stock, or any 

  
 8 

 
option, warrant or right to purchase or acquire any additional shares of its capital stock. Except in respect of the Subsidiaries, the Company does not beneficially own, directly or indirectly,
more than 5% of any class of equity securities or similar interests of any corporation, bank, business trust, association or similar organization, and is not, directly or indirectly, a partner in any partnership or party to any joint venture. The
Company beneficially owns all of the outstanding capital securities and has sole Control of the Yadkin Valley Bank and Trust Company (the “Bank”). 
 (b)        Organization and Qualification.    The Company and each of its “Significant Subsidiaries” (as defined in Rule 1-02
of Regulation S-X) (“Significant Subsidiaries”) is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable),
with the requisite power and authority to own or lease and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Significant Subsidiary is in violation of any of the provisions of its
respective articles or certificate of incorporation, bylaws or other organizational or charter documents. The Company and each of its Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity
in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not in the reasonable judgment
of the Company be expected to have a Material Adverse Effect. The Company is duly registered as a bank holding company under the Bank Holding Company Act of 1956, as amended (the “BHCA”). The Bank’s deposit accounts are insured
up to applicable limits by the FDIC, and all premiums and assessments required to be paid in connection therewith have been paid when due (after giving effect to any applicable extensions). The Company and each of its Significant Subsidiaries have
conducted their respective businesses in compliance with all applicable federal, state and foreign laws, orders, judgments, decrees, rules, regulations and applicable stock exchange requirements, including all laws and regulations restricting
activities of bank holding companies and banking organizations, except for any noncompliance that, individually or in the aggregate, has not had and would not be reasonably expected to have a Material Adverse Effect. 

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

  
 9 

 (d)        No
Conflicts.    The execution, delivery and performance by the Company of the Transaction Documents to which it is a party and the consummation by the Company of the transactions contemplated hereby or thereby (including,
without limitation, the issuance of the Preferred Shares and the Underlying Shares) do not and will not (i) conflict with or violate any provisions of the Company’s or any Subsidiary’s articles or certificate of incorporation, bylaws
or otherwise result in a violation of the organizational documents of the Company or any Subsidiary, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would result in a default) under, result in
the creation of any Lien upon any of the properties or assets of the Company or any Significant Subsidiary or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any
Material Contract, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the
Company is subject (including federal and state securities laws and regulations and the rules and regulations, assuming, without investigation, the correctness of the representations and warranties made by the Purchasers herein, of any
self-regulatory organization to which the Company or its securities are subject, including all applicable Trading Markets), or by which any property or asset of the Company is bound or affected, except in the case of clauses (ii) and
(iii) such as would not have or reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Neither the investment by Purchasers in the Preferred Shares nor the issuance of Common Stock upon the conversion of
the Preferred Stock triggers any change of control provisions of any Material Contract. 

(e)        Filings, Consents and Approvals.  Except for the
prior written approval from the Company’s primary federal regulator to pay dividends on the Preferred Shares as further described in Section 3.1(ll), neither the Company nor any of its Subsidiaries is required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority, self regulatory organization (including the Principal Trading Market) or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents (including, without limitation, the issuance of the Preferred Shares and the Underlying Shares), other than (i) obtaining the
Shareholder Approvals, (ii) the filing of each of the Articles of Amendment with the Secretary of State, (iii) the filing with the Commission of one or more Registration Statements in accordance with the requirements of the Registration
Rights Agreement, (iv) filings required by applicable state securities laws, (v) the filing of a Notice of Exempt Offering of Securities on Form D with the Commission under Regulation D of the Securities Act, (vi) the filing of any
requisite notices and/or application(s) to the Principal Trading Market for the issuance and sale of the Underlying Shares and the listing of the Underlying Shares for trading or quotation, as the case may be, thereon in the time and manner required
thereby, (vii) the filings required in accordance with Section 4.6 of this Agreement and (viii) those that have been made or obtained prior to the date of this Agreement (collectively, the “Required  Approvals”).

 (f)        Issuance of the Preferred
Shares.    The issuance of the Preferred Shares has been duly authorized and the Preferred Shares, when issued and paid for in accordance with the terms of the Transaction Documents, will be duly and validly issued, fully
paid and non-assessable and free and clear of all Liens, other than restrictions on transfer provided for in the Transaction Documents or imposed by applicable securities laws, shall not subject the holders thereof to personal liability and shall
not be subject to preemptive or similar rights. The issuance of the Underlying Shares has been duly authorized and the Underlying Shares, when issued in accordance with the terms of the applicable Articles of

  
 10 

 
Amendment, will be duly and validly issued, fully paid and non-assessable and free and clear of all Liens, other than restrictions on transfer provided for in the Transaction Documents or imposed
by applicable securities laws, and shall not be subject to preemptive or similar rights. Assuming the accuracy of the representations and warranties of the Purchasers in this Agreement, the Securities will be issued in compliance with all applicable
federal and state securities laws. 

(g)        Capitalization.    The authorized capital
stock of the Company consists of (i) 50,000,000 shares of common stock and (ii) 1,000,000 shares of preferred stock of which 45,000 shares were designated as Preferred Stock, 36,000 shares were designated as Series T Preferred Stock, and
13,312 shares were designated as Series T-ACB Preferred Stock. The number of shares and type of all authorized, issued and outstanding capital stock, options and other securities of the Company (whether or not presently convertible into or
exercisable or exchangeable for shares of capital stock of the Company) has been set forth in the SEC Reports and has changed since the date of such SEC Reports only due to stock grants or other equity awards or stock option and warrant exercises
that do not, individually or in the aggregate, have a material effect on the issued and outstanding capital stock, options and other securities. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully
paid and non-assessable, have been issued in compliance in all material respects with all applicable federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to
subscribe for or purchase any capital stock of the Company. Except as specified in the outstanding warrants issued to the United States Department of the Treasury to purchase 659,524 shares of common stock and, other than with respect to subsections
(iv) and (vii) below, the SEC Reports: (i) no shares of the Company’s outstanding capital stock are subject to preemptive rights or any other similar rights; (ii) there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares of capital stock of the Company or a Significant Subsidiary, or contracts,
commitments, understandings or arrangements by which the Company or a Significant Subsidiary is or may become bound to issue additional shares of capital stock of the Company or a Significant Subsidiary or options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares of capital stock of the Company or a Significant Subsidiary, other than those issued
or granted pursuant to Material Contracts or equity or incentive plans or arrangements described in the SEC Reports; (iii) there are no material outstanding debt securities, notes, credit agreements, credit facilities or other agreements,
documents or instruments evidencing indebtedness of the Company or a Significant Subsidiary or by which the Company or Significant Subsidiary is bound; (iv) except for the Registration Rights Agreement and the agreements set forth on Exhibit I
hereto, there are no agreements or arrangements under which the Company or a Significant Subsidiary is obligated to register the sale of any of its securities under the Securities Act; (v) there are no outstanding securities or instruments of
the Company that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or a Significant Subsidiary is or may become bound to redeem a security of the Company or a
Significant Subsidiary; (vi) neither the Company nor any Significant Subsidiary has any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement; and (vii) neither the Company nor any
Significant Subsidiary has liabilities or obligations required to be disclosed in the SEC Reports but not so disclosed in the SEC Reports, which, individually or in the aggregate, will have or would reasonably be expected to have a Material Adverse
Effect. There are no securities or instruments of the Company containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities. On or about the date of this Agreement, the Company is executing a separate share
exchange agreement for the exchange of shares of the Company’s Series T Preferred Stock and shares of the Company’s Series T-ACB Preferred Stock into an aggregate of 5,159,943 shares of the Common Stock and 1,965,000 share of Non-Voting
Common Stock. 

  
 11 

 (h)        SEC
Reports.  The Company has filed all reports, schedules, forms, statements and other documents required to be filed by it under the Exchange Act, including pursuant to Section l3(a) or 15(d) thereof, since January 1, 2010 (the
foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”), on a timely basis or has received a valid extension of such time of filing
and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective filing dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules
and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made, not misleading. The SEC Reports, including the documents incorporated by reference in each of them, each contained substantially all of the information required to be
included in it. No executive officer of the Company has failed in any respect to make the certifications required of him or her under Section 302 or 906 of the Sarbanes-Oxley Act of 2002. 

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

(j)        Tax Matters.  The Company and each of its
Subsidiaries has (i) filed all material foreign, U.S. federal, state and local tax returns, information returns and similar reports that are required to be filed, and all such tax returns are true, correct and complete in all material respects,
and (ii) paid all material taxes required to be paid by it and any other material assessment, fine or penalty levied against it other than taxes (x) currently payable without penalty or interest, or (y) being contested in good faith
by appropriate proceedings. None of the issuances of the Securities pursuant to this Agreement, together with any issuances of the Common Stock or the Non-Voting Common Stock in connection with the TARP Exchange, should cause the Company to undergo
an “ownership change” for purposes of Section 382 of the Code. The Company has received an opinion from the Company’s outside tax counsel and a letter from the Company’s independent accounting firm in connection with
the preceding representation. 
 (k)        Valuation
Allowance.  The Company has determined that no deferred tax asset valuation allowance was necessary as of September 30, 2012, and should not be necessary thereafter, as a result of the issuances of the Securities pursuant to this
Agreement, together with any issuances of Common Stock and Non-Voting Common Stock in connection with the TARP Exchange, and the currently anticipated loss from the contemplated classified asset disposition as reflected in the draft Company’s
Form 10-Q for the quarter ended September 30, 2012 provided to Purchasers. Such valuation allowance determination has been determined in accordance with GAAP applied on a consistent basis during the periods involved. The Company has
received a letter from its independent accounting firm confirming that such independent accounting firm has reviewed the Company’s determination that no 

  
 12 

 
deferred tax asset valuation allowance was necessary as of September 30, 2012, and should not be necessary thereafter, as a result of the issuance of the Securities pursuant to this
Agreement, together with any issuance of Common Stock and Non-Voting Common Stock in connection with the TARP Exchange, and the currently anticipated loss from the contemplated asset disposition, and does not disagree with the Company’s
determination and will not require the Company to establish a deferred tax asset valuation allowance unless required by a regulatory authority. 
 (l)        Material Changes.    Since the date of the latest audited financial statements included within the SEC Reports, except as
disclosed in subsequent SEC Reports filed prior to the date hereof, (i) there have been no events, occurrences or developments that have had or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse
Effect, (ii) the Company has not incurred any material liabilities (contingent or otherwise) other than (A) trade payables, accrued expenses and other liabilities incurred in the ordinary course of business consistent with past practice
and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or required to be disclosed in filings made with the Commission, (iii) the Company has not altered materially its method of
accounting or the manner in which it keeps its accounting books and records, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its shareholders or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock, (v) the Company has not issued any equity securities to any officer, director or Affiliate, except Common Stock issued pursuant to existing Company option plans or equity based plans disclosed
in the SEC Reports, and (vi) there has not been any material change or amendment to, or any waiver of any material right by the Company under, any Material Contract under which the Company or any of its Subsidiaries is bound or subject. Except
for the transactions contemplated by this Agreement, no event, liability or development has occurred or exists with respect to the Company or its Subsidiaries or their respective business, properties, operations or financial condition that would be
required to be disclosed by the Company under applicable securities laws at the time this representation is made that has not been publicly disclosed at least one Trading Day prior to the date that this representation is made. 

(m)       Environmental Matters.  Neither the Company nor any of its
Subsidiaries (i) is in violation of any statute, rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to
the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “Environmental Laws”), (ii) is liable for any off-site disposal or contamination pursuant to any Environmental
Laws, or (iii) is subject to any claim relating to any Environmental Laws; in each case, which violation, contamination, liability or claim has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse
Effect; and there is no pending or , to the Company’s Knowledge, threatened investigation that might lead to such a claim. 
 (n)        Litigation.    There is no Action which (i) adversely affects or challenges the legality, validity or enforceability of
any of the Transaction Documents, the issuance of the Preferred Shares, or the conversion of the Preferred Shares into the applicable Underlying Shares or (ii) is reasonably likely to have a Material Adverse Effect, individually or in the
aggregate, if there were an unfavorable decision. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities
laws or a claim of breach of fiduciary duty. There has not been, and to the Company’s Knowledge there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the
Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company under the Exchange Act or the Securities Act. There are no outstanding orders, judgments,

  
 13 

 
injunctions, awards or decrees of any court, arbitrator or governmental or regulatory body against the Company or any executive officers or directors of the Company in their capacities as such,
which individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect. 

(o)        Employment Matters.  No labor dispute exists or, to
the Company’s Knowledge, is imminent with respect to any of the employees of the Company or any Significant Subsidiary which would have or reasonably be expected to have a Material Adverse Effect. To the Company’s Knowledge, no executive
officer is, or is now reasonably expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any
restrictive covenant in favor of a third party, and to the Company’s Knowledge, the continued employment of each such executive officer does not subject the Company or any Subsidiary to any liability with respect to any of the foregoing
matters. The Company and each of its Significant Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and
hours, except where the failure to be in compliance would not have or reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. 

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

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

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

  
 14 

 (s)        Patents and
Trademarks.    The Company and its Subsidiaries own, possess, license, or can acquire on reasonable terms, or have other rights to use all foreign and domestic patents, patent applications, trade and service marks, trade and
service mark registrations, trade names, copyrights, inventions, trade secrets, technology, Internet domain names, know-how and other intellectual property (collectively, the “Intellectual Property”) necessary for the conduct of
their respective businesses as now conducted, except where the failure to own, possess, license or have such rights would not have or reasonably be expected to have a Material Adverse Effect. Except as set forth in the SEC Reports and except where
such violations or infringements would not have or reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect, (a) there are no rights of third parties to any such Intellectual Property; (b) there is
no infringement by third parties of any such Intellectual Property; (c) there is no pending or, to the Company’s Knowledge, threatened action, suit, proceeding or claim by others challenging the Company’s and its Subsidiaries’
rights in or to any such Intellectual Property; (d) there is no pending or, to the Company’s Knowledge, threatened action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property; and
(e) there is no pending, or to the Company’s Knowledge, threatened Proceeding by others that the Company and/or any Subsidiary infringes or otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights of
others. 
 (t)        Insurance.  The Company and each
of the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as the Company believes to be prudent and customary in the businesses and locations in which and where the Company
and the Subsidiaries are engaged. Neither the Company nor any of its Subsidiaries has received any notice of cancellation of any such insurance, nor, to the Company’s Knowledge, will it or any Subsidiary be unable to renew their respective
existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect. 

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

(v)        Internal Control Over Financial Reporting.  The
Company maintains internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with GAAP and such internal control over financial reporting was effective as of the date of the most recent SEC Report. 

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

(x)        Certain Fees.  No person will have, as a result of
the transactions contemplated by this Agreement, any valid right, interest or claim against or upon the Company or a Purchaser for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered

  
 15 

 
into by or on behalf of the Company, other than the Placement Agent with respect to the offer and sale of the Preferred Shares (which Placement Agent’s fees are being paid by the Company).
The Company shall indemnify, pay, and hold each Purchaser harmless against, any liability, loss or expense (including, without limitation, attorneys’ fees and out-of-pocket expenses) arising in connection with any such right, interest or claim.

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

(z)         Registration Rights.    Other than
each of the Purchasers and as set forth on Exhibit I, no Person has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company other than those securities which are currently registered
on an effective registration statement on file with the Commission. 

(aa)       Listing and Maintenance Requirements.    The
Company’s Common Stock is registered pursuant to Section 12(b) of the Exchange Act, and the Company has taken no action designed to terminate the registration of the Common Stock under the Exchange Act nor has the Company received any
notification that the Commission is contemplating terminating such registration. The Company has not, in the 12 months preceding the date hereof, received written notice from any Trading Market on which the Common Stock is listed or quoted to the
effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance in all material
respects with the listing and maintenance requirements for continued trading of the Common Stock on the Principal Trading Market. 
 (bb)      Investment Company.    Neither the Company nor any of its Subsidiaries is required to be registered as, and immediately following the
Closing will not be required to register as, an “investment company” within the meaning of the Investment Company Act of 1940, as amended, and neither the Company nor any Subsidiary sponsors any person that is such an investment company.

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

(dd)      Application of Takeover Protections: Rights
Agreements.    The Company has not adopted any shareholder rights plan or similar arrangement relating to accumulations of beneficial 

  
 16 

 
ownership of Common Stock or a change in control of the Company. The Company and its Board of Directors have taken all necessary action, if any, in order to render inapplicable Article 9 and
Article 9A of the North Carolina Business Corporation Act or any other control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the
Company’s Articles of Incorporation, including Article VII thereof, or other organizational documents or the laws of North Carolina or otherwise which is or could become applicable to any Purchaser solely as a result of the transactions
contemplated by this Agreement, including, without limitation, the Company’s issuance of the Securities and any Purchaser’s ownership of the Securities. 

(ee)     Disclosure.    The Company confirms that neither it nor, to
the Company’s Knowledge, any of its officers or directors nor any other Person acting on its or their behalf has provided, including the Placement Agent, any Purchaser or its respective agents or counsel with any information that it believes
constitutes or could reasonably be expected to constitute material, non-public information except insofar as the existence, provisions and terms of the Transaction Documents and the proposed transactions hereunder may constitute such information and
the Company’s financial results related to the third quarter of fiscal year 2012, all of which will be disclosed by the Company in the Press Release as contemplated by Section 4.6 hereof. The Company understands and confirms that each of
the Purchasers will rely on the representations in this Section 3.1(dd) in effecting transactions in securities of the Company. No event or circumstance has occurred or information exists with respect to the Company or any of its Subsidiaries
or its or their business, properties, operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed, except
for the announcement of this Agreement and related transactions and/or as may otherwise be disclosed on the Press Release issued pursuant to Section 4.6. 
 (ff)      Off Balance Sheet Arrangements.    There is no transaction, arrangement, or other relationship between the Company (or any Subsidiary)
and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its Exchange Act filings and is not so disclosed and would have or reasonably be expected to have a Material Adverse Effect. 

(gg)    Acknowledgment Regarding Purchasers’ Purchase of Preferred
Shares.    The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby
and thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any
advice given by any of the Purchasers or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Preferred
Shares. 
 (hh)    Absence of Manipulation.    The Company has
not, and to the Company’s Knowledge no one acting on its behalf has, taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the
sale or resale of any of the Securities. 

(ii)      OFAC.    Neither the Company nor any Subsidiary nor,
to the Company’s Knowledge, any director, officer, agent, employee, Affiliate or Person acting on behalf of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the
U.S. Treasury Department (“OFAC”); and the Company will not knowingly use the proceeds of the sale of the Preferred Shares, towards any sales or operations in Cuba, Iran, Syria, Sudan, Myanmar or any other country sanctioned by OFAC
or for the purpose of financing the activities of any Person currently subject to any U.S. sanctions administered by OFAC. 

  
 17 

 (jj)         Money
Laundering Laws.    The operations of each of the Company and any Subsidiary are in compliance in all material respects with the money laundering statutes of applicable jurisdictions, the rules and regulations thereunder and
any related or similar rules, regulations or guidelines, issued, administered or enforced by any applicable governmental agency (collectively, the “Money Laundering Laws”) and to the Company’s Knowledge, no action, suit or
proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company and/or any Subsidiary with respect to the Money Laundering Laws is pending or threatened. 

(kk)       Reports, Registrations and Statements.    Since
December 31, 2009, the Company and each Subsidiary have filed all material reports, registrations and statements, together with any required amendments thereto, that it was required to file with the FRB, the NCCOB and the FDIC and any other
applicable federal or state securities or banking authorities, except where the failure to file any such report, registration or statement would not have or reasonably be expected to have a Material Adverse Effect. All such reports and statements
filed with any such regulatory body or authority are collectively referred to herein as the “Company Reports.” All such Company Reports were filed on a timely basis or the Company or the applicable Subsidiary, as applicable,
received a valid extension of such time of filing and has filed any such Company Reports prior to the expiration of any such extension. As of their respective dates, the Company Reports complied in all material respects with all the rules and
regulations promulgated by the FRB, the NCCOB and the FDIC and any other applicable foreign, federal or state securities or banking authorities, as the case may be. 

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

(mm)     Agreements with Regulatory Agencies: Compliance with Certain Banking
Regulations.    Except for (a) the Company’s agreement with its primary regulator to (x) obtain prior written approval before taking any of the following actions: declare or pay any dividends, common or
preferred, without its prior approval; directly or indirectly take dividends or any other form of payment representing a reduction in capital from the Bank; make any payments on trust preferred securities; incur, increase, or guarantee any debt;
purchase or redeem any shares of its stock; (y) preserve the Company’s cash assets and not dissipate those assets except for the benefit of the Bank, and (z) notify the Federal Reserve prior to using any of the Company’s cash
assets other than for investment in obligations or equity of the Bank, investment in short-term, liquid assets, or payment of the Company’s normal customary expenses and (b) the Bank’s agreement with its regulators to (x) obtain
their prior written approval before paying any cash dividends; (y) not extend, directly or indirectly, any additional credit to or for the benefit of any borrower who is obligated in any manner to the Bank on any extension of credit or portion
thereof that has been charged off by the Bank or classified Loss or Doubtful in any report of examination, so long as such credit remains uncollected; and (z) make no additional advances to any borrower whose loan or line of credit has been
adversely classified Substandard in any report of examination without the prior approval of a majority of the Board of Directors of the Bank, neither the Company nor any Subsidiary is subject to any cease-and-desist or other similar order or
enforcement action issued by, or is a party to any written agreement, consent agreement or memorandum of understanding with, or is a party to any commitment letter or similar undertaking to, or is subject to any capital directive by, or since
December 31, 2008, has adopted any board resolutions at the request of, any governmental entity (including, without limitation, the Federal Reserve or the FDIC) that currently 

  
 18 

 
restricts in any material respect the conduct of its business or that in any material manner relates to its capital adequacy, its liquidity and funding policies and practices, its ability to pay
dividends, its credit, risk management or compliance policies, its internal controls, its management or its operations or business (each item in this sentence, a “Regulatory Agreement”), nor has the Company or any Subsidiary been
advised since December 31, 2010 by any governmental entity that it intends to issue, initiate, order, or request any such Regulatory Agreement. 
 The Company has no knowledge of any facts and circumstances, and has no reason to believe that any facts or circumstances exist, that would cause its Subsidiary banking institutions: (i) to be deemed
not to be in satisfactory compliance with the Community Reinvestment Act (“CRA”) and the regulations promulgated thereunder or to be assigned a CRA rating by federal or state banking regulators of lower than “satisfactory”;
(ii) to be operating in violation, in any material respect, of the Bank Secrecy Act, the Patriot Act, any order issued with respect to anti-money laundering by OFAC, or any other anti-money laundering statute, rule or regulation; or
(iii) not to be in satisfactory compliance, in any material respect, with all applicable privacy of customer information requirements contained in any applicable federal and state privacy laws and regulations as well as the provisions of all
information security programs adopted by the Subsidiary. 
 (nn)    No General
Solicitation or General Advertising.    Neither the Company nor, to the Company’s Knowledge, any Person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within
the meaning of Regulation D under the Securities Act) in connection with any offer or sale of the Preferred Shares. 
 (oo)    Risk Management Instruments.    Except as has not had or would not reasonably be expected to have a Material Adverse Effect, since January 1,
2011, all material derivative instruments, including, swaps, caps, floors and option agreements, whether entered into for the Company’s own account, or for the account of one or more of the Company Subsidiaries, were entered into (1) only
in the ordinary course of business, (2) in accordance with prudent practices and in all material respects with all applicable laws, rules, regulations and regulatory policies, and (3) with counterparties believed to be financially
responsible at the time; and each of them constitutes the valid and legally binding obligation of the Company or one of the Subsidiaries, enforceable in accordance with its terms. Neither the Company nor the Subsidiaries, nor, to the Company’s
Knowledge, any other party thereto, is in breach of any of its material obligations under any such agreement or arrangement. 
 (pp)    ERISA.    The Company and each ERISA Affiliate is in compliance in all material respects with all presently applicable provisions of ERISA; no
“reportable event” described in Section 4043 of ERISA (other than an event for which the 30-day notice requirement has been waived by applicable regulation) has occurred with respect to any Pension Plan for which the Company would
have any liability that would reasonably be expected to have a Material Adverse Effect; the Company has not incurred and does not expect to incur liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any
Pension Plan; or (ii) Sections 412 or 4971 of the Code that would reasonably be expected to have a Material Adverse Effect; and each Pension Plan for which the Company would have liability that is intended to be qualified under
Section 401(a) of the Code is so qualified in all material respects and nothing has occurred, to the Company’s Knowledge, whether by action or by failure to act, which would cause the loss of such qualification. 

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

  
 19 

 (rr)      Shell Company
Status.    The Company is not, and has never been, an issuer identified in Rule 144(i)(1). 
 (ss)     Registration Eligibility.    The Company is eligible to register the resale of the Securities by the Purchasers using Form S-3 promulgated
under the Securities Act. 
 (tt)      No Additional
Agreements.    Except with respect to closing mechanics, the Company has no other agreements or understandings (including, without limitation, side letters) with any Purchaser to purchase Preferred Shares on terms that are
different from those set forth herein. 
 3.2      Representations and
Warranties of the Purchasers.    Each Purchaser hereby, for itself and for no other Purchaser, represents and warrants as of the Closing Date to the Company as follows: 

(a)      Organization: Authority.  (1) If such Purchaser is an
entity, it is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite corporate or partnership power and authority to enter into and to consummate the transactions contemplated
by the applicable Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. If such Purchaser is an entity, the execution, delivery and performance by such Purchaser of the transactions contemplated by this Agreement
have been duly authorized by all necessary corporate or, if such Purchaser is not a corporation, such partnership, limited liability company or other applicable like action, on the part of such Purchaser. If such Purchaser is an entity, each of this
Agreement, the Registration Rights Agreement and the Escrow Agreement has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of
such Purchaser, enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the
enforcement of, creditors’ rights and remedies or by other equitable principles of general application. (2) If such Purchaser is not an entity, the execution, delivery and performance by such Purchaser of the applicable Transaction
Documents and the transactions contemplated hereby and thereby have been duly authorized, and no further consent or authorization in connection therewith is required by the Purchaser. Each of the applicable Transaction Documents has been duly
executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against such Purchaser in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable
principles of general application. 
 (b)      No
Conflicts.  The execution, delivery and performance by such Purchaser of this Agreement, the Registration Rights Agreement and the Escrow Agreement and the consummation by such Purchaser of the transactions contemplated hereby and
thereby will not (i) result in a violation of the organizational documents of such Purchaser (if such Purchaser is an entity), (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become
a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Purchaser is a party, or (iii) result in a violation of any

  
 20 

 
law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to such Purchaser, except in the case of clauses (ii) and (iii) above, for such
conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Purchaser to perform its obligations hereunder. 

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

 (d)     Purchaser Status.  At the time such Purchaser was offered
the Preferred Shares, it was, and at the date hereof it is, an “accredited investor” as defined in Rule 501(a) under the Securities Act. Such Purchaser has provided the information in the Accredited Investor Questionnaire attached hereto
as Exhibit C-1. 
 (e)      Reliance.  The Company and
the Placement Agent (on behalf of its client) will be entitled to rely upon this Agreement and are irrevocably authorized to produce this Agreement or a copy hereof to (A) any regulatory authority having jurisdiction over the Company and its
affiliates and (B) any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby, in each case, to the extent required by any court or governmental authority to which the Company
is subject, provided that the Company provides the Purchaser with prior written notice of such disclosure. 

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

(g)      Direct Purchase.    Purchaser is purchasing Preferred
Shares directly from the Company and not from the Placement Agent. The Placement Agent has not made any representations, declarations or warranties to Purchaser, express or implied, regarding the Preferred Shares, the Company or the Company’s
offering of the Preferred Shares, and the Placement Agent has not offered to sell, or solicited an offer to buy, any of the Preferred Shares that Purchaser proposes to acquire from the Company hereunder. 

  
 21 

 (h)      Experience and Financial
Capability of Such Purchaser.  Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Preferred Shares, and has so evaluated the merits and risks of such investment. Such Purchaser has available funds necessary to consummate the Closing on the terms and conditions contemplated by this
Agreement and is able to bear the economic risk of an investment in the Preferred Shares. 

(i)       Access to Information.  Such Purchaser acknowledges that
it has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Preferred Shares and the merits
and risks of investing in the Preferred Shares and any such questions have been answered to such Purchaser’s reasonable satisfaction; (ii) access to information about the Company and the Subsidiaries and their respective financial
condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment; and (iv) the opportunity to ask questions of management and any such questions have been answered to such Purchaser’s
reasonable satisfaction. Neither such inquiries nor any other investigation conducted by or on behalf of such Purchaser or its representatives or counsel shall modify, amend or affect such Purchaser’s right to rely on the truth, accuracy and
completeness of the Company’s representations and warranties contained in the Transaction Documents. Such Purchaser has sought such accounting, legal and tax advice as it has considered necessary to make an informed decision with respect to its
acquisition of the Preferred Shares. Purchaser acknowledges that neither the Company nor the Placement Agent has made any representation, express or implied, with respect to the accuracy, completeness or adequacy of any available information except,
with respect to the Company, as expressly set forth in the SEC Reports or to the extent such information is covered by the representations and warranties of the Company contained in Section 3.1. 

(j)       Brokers and Finders.  To its knowledge, no Person will
have, as a result of the transactions contemplated by the Transaction Documents, any valid right, interest or claim against or upon Purchaser for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding
entered into by or on behalf of the Purchaser. 
 (k)       Independent
Investment Decision.  Such Purchaser has independently evaluated the merits of its decision to purchase Preferred Shares pursuant to the Transaction Documents, and such Purchaser confirms that it has not relied on the advice of any
other Purchaser’s business and/or legal counsel in making such decision. Such Purchaser understands that nothing in this Agreement or any other materials presented by or on behalf of the Company to the Purchaser in connection with the purchase
of the Preferred Shares constitutes legal, regulatory, tax or investment advice. Such Purchaser has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase
of the Preferred Shares. Such Purchaser understands that the Placement Agent has acted solely as the agent of the Company in this placement of the Securities and such Purchaser has not relied on any statement, representation or warranty including
any business or legal advice of the Placement Agent or any of either of its agents, counselor Affiliates in making its investment decision hereunder, and confirms that none of such Persons has made any representations or warranties to such Purchaser
in connection with the transactions contemplated by the Transaction Documents. 

  
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(l)         ERISA.  (i) If Purchaser is, or is acting
on behalf of, an ERISA Entity (as defined below), Purchaser represents and warrants that on the date hereof; 

(A)       The decision to invest assets of the ERISA Entity in the Preferred Shares
was made by fiduciaries independent of the Company or its affiliates, which fiduciaries are duly authorized to make such investment decisions and who have not relied on any advice or recommendations of the Company or its affiliates; 

(B)        Neither the Company nor any of its agents, representatives or
affiliates have exercised any discretionary authority or control with respect to the ERISA Entity’s investment in the Preferred Shares; 
 (C)        The purchase and holding of the Preferred Shares will not constitute a nonexempt prohibited transaction under ERISA or Section 4975 of the Code or a
similar violation under any applicable similar laws; and 
 (D)       The
terms of the Transaction Documents comply with the instruments and applicable laws governing such ERISA Entity. 
 (ii)         For the purpose of this paragraph, the term “ERISA Entity” will mean (A) an “employee benefit plan” within the
meaning of Section 3(3) of ERISA subject to Title I of ERISA, (B) a “plan” within the meaning of Section 4975(e)(1) of the Code and (C) any person whose assets are deemed to be “plan assets” within the meaning
of ERISA Section 3(42) and 29 C.F.R. § 2510.3-101 or otherwise under ERISA. 

(m)        Reliance on Exemptions.    Such Purchaser
understands that the Securities being offered and sold to it in reliance on specific exemptions from the registration requirements of U.S. federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and
such Purchaser’s compliance with, the representations, warranties, agreements, acknowledgements and understandings of such Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of such
Purchaser to acquire the Preferred Shares. 
 (n)         No
Governmental Review.    Such Purchaser understands that no U.S. federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness
or suitability of the investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities. Purchaser understands that the Securities are not savings accounts, deposits or other obligations of
any bank and are not insured by the FDIC, including the FDIC’s Deposit Insurance Fund, or any other governmental agency. 
 (o)         Consents.    Assuming the accuracy of the representations and warranties of the Company and the other parties to the
Transaction Documents, other than passivity and anti-association commitments that may be requested by the Federal Reserve, no approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any governmental entity or
authority or any other person or entity in respect of any law or regulation is necessary or required, and no lapse of a waiting period under law applicable to such Purchaser is necessary or required, in each case in connection with the execution,
delivery or performance by such Purchaser of this Agreement or the purchase of the Preferred Shares contemplated hereby. 
 (p)         Residency.    Such Purchaser’s residence (if an individual) or office in which its investment decision with respect
to the Preferred Shares was made (if an entity) are located at the address immediately below such Purchaser’s name on its signature page hereto. 

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

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

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

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

The Company and each of the Purchasers acknowledge and agree that no party to this Agreement has made or makes any
representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in this Article 3 and the Transaction Documents. 
 ARTICLE 4: 
 OTHER AGREEMENTS OF THE PARTIES 

4.1      Transfer Restrictions. 

(a)        Compliance with Laws.    Notwithstanding
any other provision of this Article 4, each Purchaser covenants that the Securities may be disposed of only pursuant to an effective registration 

  
 24 

 
statement under, and in compliance with the requirements of, the Securities Act, or pursuant to an available exemption from, or in a transaction not subject to, the registration requirements of
the Securities Act, and in compliance with any applicable state, federal or foreign securities laws. In connection with any transfer of the Securities other than (i) pursuant to an effective registration statement, (ii) to the Company or
(iii) pursuant to Rule 144 (provided that the transferor provides the Company with reasonable assurances (in the form of a seller representation letter and, if applicable, a broker representation letter) that such securities may be sold
pursuant to such rule), the Company may require the transferor thereof to provide to the Company and the Transfer Agent, at the transferor’s expense, an opinion of counsel selected by the transferor and reasonably acceptable to the Company and
the Transfer Agent, the form and substance of which opinion shall be reasonably satisfactory to the Company and the Transfer Agent, to the effect that such transfer does not require registration of such transferred Securities under the Securities
Act. Notwithstanding the foregoing, the Company hereby consents to and agrees to register on the books of the Company and with its Transfer Agent, without any such legal opinion, except to the extent that the Transfer Agent requests such legal
opinion, any transfer of the Securities by any Purchaser to an Affiliate of such Purchaser, provided that the transferee certifies to the Company that it is an “accredited investor” as defined in Rule 501(a) under the Securities Act, and
provided that such Affiliate does not request any removal of any existing legends on any certificate evidencing the Securities. As a condition of transfer (other than pursuant to clauses (i), (ii) or (iii) of the preceding sentence), any
such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights of a Purchaser under this Agreement and the Registration Rights Agreement with respect to such transferred Securities. 

(b)        Legends.  Certificates evidencing the Securities
shall bear any legend as required by the “blue sky” laws of any state and a restrictive legend in substantially the following form (and, with respect to Securities held in book-entry form, the Transfer Agent will record such a legend on
the share register), until such time as they are not required under Section 4.1(c) or applicable law: 
 THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS SOLD PURSUANT TO RULE
144 UNDER SAID ACT (PROVIDED THAT THE TRANSFEROR PROVIDES THE COMPANY WITH REASONABLE ASSURANCES (IN THE FORM A SELLER REPRESENTATION LETTER AND, IF APPLICABLE, A BROKER REPRESENTATION LETTER) THAT THE SECURITIES MAY BE SOLD PURSUANT TO SUCH RULE).
NO REPRESENTATION IS MADE BY THE ISSUER AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR RESALES OF THESE SECURITIES. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA

  
 25 

 
FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES IF THE PLEDGEE AGREES IN WRITING TO BE BOUND BY THE TRANSFER RESTRICTIONS TO WHICH THE PLEDGOR IS SUBJECT.

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

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

  
 26 

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

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

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

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

4.6        Securities Laws Disclosure: Publicity.  On or before
9:00 a.m., New York City time, on the second (2nd) Trading Day immediately following the date of this Agreement, the Company shall issue one or more press releases (collectively, the “Press Release”) reasonably acceptable to
the Purchasers disclosing among other things (i) the material terms of the transactions contemplated hereby, including, without limitation, the issuance of the Preferred Shares, (ii) the Company’s financial results related to the
third quarter of fiscal year 2012, (iii) the currently anticipated loss from the contemplated classified asset disposition as reflected in the draft Company’s Form 10-Q for the quarter ended September 30, 2012 provided to Purchasers,
(iv) the material terms of the TARP Exchange and (v) any other material, nonpublic information that the Company may have provided any Purchaser at any time prior to the issuance of the Press Release. On or before 5:30 p.m., New York City
time, on the fourth Trading Day following the date of this Agreement, the Company will file a Current Report on Form 8-K with the Commission describing the terms of the Transaction Documents (and including as exhibits to such Current Report on Form
8-K, the Press Release, the material Transaction Documents (including, without limitation, this Agreement, the Registration Rights Agreement and the Articles of Amendment), the use of proceeds and the execution of a securities purchase agreement
from certain other investors and such 

  
 27 

 
other disclosures and filings as may be required by the federal securities laws. On or before 5:30 p.m., New York City time, on the fourth Trading Day immediately following the Closing Date, the
Company will file a Current Report on Form 8-K with the Commission disclosing the funding and closing of the offering and, to the extent necessary, updating the previously filed Current Report on Form 8-K (and to the extent not previously filed,
including as exhibits to such Current Report on Form 8-K the material Transaction Documents (including, without limitation, this Agreement, the Registration Rights Agreement and the Articles of Amendment) and such other disclosures and filings as
may be required by the federal securities laws. To the extent that the potential transactions contemplated hereby are publicly disclosed prior to Closing and this Agreement terminates prior to Closing, the Company shall publicly disclose, on or
before 9:00 a.m., New York City time, on the Trading Day immediately following such termination, the termination of the transactions contemplated hereby. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any
Purchaser  or any Affiliate or investment adviser of any Purchaser, or include the name of any Purchaser or any Affiliate or investment adviser of any Purchaser in any press release or filing with the Commission (other than the
Registration Statement) or Trading Market, without the prior written consent of such Purchaser, except (i) as required by federal securities law in connection with (A) any registration statement contemplated by the Registration Rights
Agreement and (B) the filing of final Transaction Documents with the Commission, (ii) to the extent such disclosure is required by law, at the request of the Staff of the Commission or Trading Market regulations, in which case the Company
shall provide the Purchasers with prior written notice of such disclosure permitted under this subclause (ii). From and after the issuance of the Press Release, no Purchaser shall be in possession of any material, non-public information received
from the Company, any Subsidiary or any of their respective officers, directors or employees or the Placement Agent. Each Purchaser, severally and not jointly with other Purchasers, covenants that until such time as the transactions contemplated by
this Agreement are publicly disclosed by the Company as described in this Section 4.6, such Purchaser will maintain the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this
transaction). 
 4.7      Non-Public Information.  Except with
the express written consent of such Purchaser and unless prior thereto such Purchaser shall have executed a written agreement regarding the confidentiality and use of such information, the Company shall not, and shall cause each Subsidiary and each
of their respective officers, directors, employees and agents, not to, and each Purchaser shall not directly solicit the Company, any of its Subsidiaries or any of their respective officers, directors, employees or agents to provide any Purchaser
with any material, non-public information regarding the Company or any of its Subsidiaries from and after the filing of the Press Release. 
 4.8      Indemnification. 

(a)        Indemnification of Purchasers.    In
addition to the indemnity provided in the Registration Rights Agreement, the Company will indemnify and hold each Purchaser and its directors, officers, shareholders, members, partners, employees, agents and investment advisers (and any other
Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners, employees or investment advisers (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling person (each, an “Indemnified Person”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Indemnified Person may suffer or incur as a result of (i) any breach of any of the representations,

  
 28 

 
warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (ii) any action instituted against a Indemnified Person in any capacity, or
any of them or their respective affiliates, by any shareholder of the Company who is not an affiliate of such Indemnified Person, with respect to any of the transactions contemplated by this Agreement. The Company will not be liable to any
Indemnified Person under this Agreement to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Indemnified Person’s breach of any of the representations, warranties, covenants or agreements made by
such Indemnified Person in this Agreement or in the other Transaction Documents or attributable to the gross negligence or willful misconduct on the part of such Indemnified Person. 

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

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

4.10    Use of Proceeds.    The Company intends to use the net proceeds
from the sale of the Preferred Shares hereunder for general corporate purposes, including the contribution of at least $35.0 million of the net proceeds to the Bank. 

4.11    Shareholders’ Meeting.  The Company shall call a special meeting of its
shareholders, to be held as promptly as practicable following the Closing, but in no event later than 75 days after the Closing, to vote on proposals (the “Shareholder Proposals”) to (i) approve the issuance of the Underlying
Shares upon conversion of the Preferred Shares into Common Stock, the issuance of the Common Stock and Non-Voting Common Stock upon the exchange of the Series T Preferred Stock and 

  
 29 

 
Series T-ACB Preferred Stock in the TARP Exchange and the issuance of the Common Stock upon conversion of the Non-Voting Common Stock issued in the TARP Exchange for purposes of NASDAQ Listing
Rule 5635, (ii) amend the Articles of Incorporation to authorize the class of Non-Voting Common Stock in accordance with the Common Stock Articles of Amendment, and (iii) if necessary, amend the Articles of Incorporation to increase the
number of authorized shares of Common Stock to at least such number as shall be sufficient to permit the full conversion of the Preferred Shares, the TARP Exchange, and the full conversion of the Non-Voting Common Stock (such approval of the
Shareholder Proposals, “Shareholder Approvals”). The Board of Directors of the Company shall recommend to the Company’s shareholders that such shareholders vote in favor of the Shareholder Proposals. In connection with such
meeting, the Company shall promptly prepare and file (but in no event more than 15 Business Days after the Closing Date) with the Commission a preliminary proxy statement, shall use its reasonable best efforts to respond to any comments of the
Commission or its staff and to cause a definitive proxy statement related to such shareholders’ meeting to be mailed to the Company’s shareholders not more than 10 Business Days after clearance thereof by the Commission, and shall use its
reasonable best efforts to solicit proxies for such Shareholder Approvals. If at any time prior to such shareholders’ meeting there shall occur any event that is required to be set forth in an amendment or supplement to the proxy statement, the
Company shall as promptly as practicable prepare and mail to its shareholders such an amendment or supplement. In the event that Shareholder Approvals are not obtained at such special shareholders’ meeting, the Company shall include a proposal
to approve (and the Board of Directors shall recommend approval of) such proposal at a meeting of its shareholders to be held no less than once in each subsequent six-month period beginning on the date of such special shareholders’ meeting
until such approval is obtained. 
 4.12        Limitation on
Beneficial Ownership.  No Purchaser will be entitled to purchase a number of Preferred Shares that would result in such Purchaser, together with its Affiliates and any other Persons with which it is acting in concert or whose holdings
would otherwise be required to be aggregated with such Purchaser’s holdings for purposes of the BHCA or the CIBCA, becoming, directly or indirectly (assuming conversion of the Preferred Shares), collectively, the beneficial owner (as determined
under Rule 13d-3 under the Exchange Act) of more than (i) 9.9% of the number of shares of Common Stock issued and outstanding or (ii) 14.0% of the aggregate number of shares of Common Stock and Non-Voting Common Stock issued and
outstanding. 
 4.13        Conduct of Business.  From
the date hereof until the earlier of the Closing Date or the termination of this Agreement in accordance with its terms, except as contemplated by this Agreement, the Company will, and will cause its Subsidiaries to, operate their business in the
ordinary course consistent with past practice, preserve intact the current business organization of the Company, use commercially reasonable efforts to retain the services of their employees, consultants and agents, preserve the current
relationships of the Company and its Subsidiaries with material customers and other Persons with whom the Company and its Subsidiaries have and intend to maintain significant relations, maintain all of its operating assets in their current condition
(normal wear and tear excepted) and will not take or omit to take any action that would constitute a breach of Section 3.1(k). 
 4.14        Avoidance of Control.  Notwithstanding anything to the contrary in this Agreement, neither the Company nor any Subsidiary shall take
any action (including, without limitation, any redemption, repurchase, rescission or recapitalization of Common Stock, or securities or rights, options or warrants to purchase Common Stock, or securities of any type whatsoever that are, or may
become, convertible into or exchangeable into or exercisable for Common Stock in each case, where each Purchaser is not given the right to participate in such redemption, repurchase, rescission or recapitalization to the extent of such
Purchaser’s pro rata proportion), that would cause (a) such 

  
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Purchaser’s or any other Person’s equity of the Company (together with equity owned by such Purchaser’s or other Person’s Affiliates (as such term is used under the BHCA)) to
exceed 33.3% of the Company’s total equity (provided that there is no ownership or control in excess of 9.9% of any class of voting securities of the Company by such Purchaser or any other Person, together with their respective Affiliates, as
applicable) or (b) such Purchaser’s or any other Person’s ownership of any class of voting securities of the Company (together with the ownership by such Purchaser’s Affiliates (as such term is used under the BHCA) of voting
securities of the Company) to exceed 9.9%, or to increase to an amount that would constitute “control” under the BHCA, the CIBCA or any rules or regulations promulgated thereunder (or any successor provisions) or otherwise cause such
Purchaser to “control” the Company under and for purposes of the BHCA, the CIBCA or any rules or regulations promulgated thereunder (or any successor provisions), in each case without the prior written consent of such Purchaser or such
Person; provided however that the Company shall not be deemed to be in breach of this Section to the extent that it is taking actions authorized under other Sections of this Agreement. Notwithstanding anything to the contrary in this Agreement, no
Purchaser (together with its Affiliates (as such term is used under the BHCA)) shall have the ability to purchase more than 33.3% of the Company’s total equity or exercise any voting rights of any class of securities in excess of 9.9% of the
total outstanding voting securities of the Company. In the event either the Company or a Purchaser breaches its obligations under this Section 4.14 or believes that it is reasonably likely to breach such an obligation, it shall promptly notify
the other parties hereto and shall cooperate in good faith with such parties to modify ownership or make other arrangements or take any other action, in each case, as is necessary to cure or avoid such breach. 

4.15    Most Favored Nation.  Except as disclosed or set forth herein, during the
period from the date of this Agreement through the Closing Date, neither the Company nor its Subsidiaries shall enter into any additional, or modify any existing, agreements with any existing or future investors in the Company or any of its
Subsidiaries that have the effect of establishing rights or otherwise benefiting such investor in a manner more favorable in any material respect to such investor than the rights and benefits established in favor of the Purchasers by this Agreement,
unless, in any such case, the Purchasers have been provided with such rights and benefits. 

4.16    Subscription Rights. 

(a)        Sale of New Securities.  For a period beginning on
the Closing Date and ending on the third anniversary of the Closing Date, for as long as a Purchaser (together with its Affiliates) owns Securities constituting at least 357,142 shares (as adjusted for any stock dividend, subdivision, split or
combination with respect to shares of Common Stock after the date of this Agreement) of Common Stock (counting as shares of Common Stock owned by Purchaser and outstanding, all shares of Common Stock into which the Preferred Stock owned by Purchaser
are convertible) (before giving effect to any issuances triggering the provisions of this Section 4.16), if the Company at any time or from time to time makes any public or non-public offering of any equity (including Common Stock, preferred
stock and restricted stock), or any securities, options or debt that are convertible or exchangeable into equity or that include an equity component (such as an “equity kicker”) (including any hybrid security) (any such security a
“New Security”), the Purchaser shall be afforded the opportunity (provided, in the case of an offering that is not a registered public offering, that the Purchaser satisfied any applicable “accredited investor,”
“qualified institutional buyer” or other investor criteria applicable to such offering) to acquire from the Company for the same price and on the same terms (except that the Purchaser may elect to receive such securities in non-voting
form) as such securities are proposed to be offered to others, up to the amount of New Securities in the aggregate required to enable it to maintain its proportionate Common Stock-equivalent interest in the Company; provided that Purchaser shall not
be entitled to acquire securities 

  
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pursuant to this Section 4.16 if such acquisition would cause or would result in Purchaser and its Affiliates, collectively, being deemed to own, control or have the power to vote, for
purposes of the BHCA or the CIBCA and any rules and regulations promulgated thereunder, 10% or more of any class of “voting securities” (as defined in the BHCA and any rules or regulations promulgated thereunder) of the Company (it being
understood, for the avoidance of doubt, that no security shall be included in any such percentage calculation to the extent it cannot by its terms be converted into or exercisable for voting securities by the Purchaser or its Affiliates), or 33.3%
of the Company’s total equity, outstanding at such time. Subject to the foregoing proviso, the amount of New Securities that the Purchaser shall be entitled to purchase in the aggregate shall be determined by multiplying (x) the total
number of such offered shares of New Securities by (y) a fraction, the numerator of which is the number of shares of Common Stock held by Purchaser plus the number of shares of Common Stock represented by the Preferred Stock held by Purchaser
on an as converted basis, as of such date, and the denominator of which is the number of shares of Common Stock then outstanding plus the number of shares of Common Stock represented by all then outstanding shares of Preferred Stock on an as
converted basis, as of such date. Notwithstanding the foregoing, the subscription rights set forth under this Section 4.16 shall not apply to (1) any offering by the Company pursuant to the granting or exercise of employee stock options or
other equity incentives to employees or directors pursuant to the Company’s stock incentive plans or the issuance of stock pursuant to any employee stock purchase plan, in each case in the ordinary course of equity compensation awards and to
the extent approved by the Board of Directors, (2) issuances of any securities issued as a result of a stock split, stock dividend, reclassification or reorganization or similar event, but solely to the extent such issuance is (A) made to
all holders of Common Stock and (B) results in an adjustment to the conversion price of the Preferred Stock, (3) issuances of shares of Common Stock issued upon conversion of, or as a dividend on, the Preferred Stock, (4) issuances of
shares of Common Stock issued upon conversion of the Non-Voting Common Stock, (5) issuances of shares of Common Stock issued upon conversion of, or as a dividend on, any convertible securities of the Company issued prior to the date hereof and
(6) an offering by the Company for consideration in connection with any bona fide, arm’s length direct or indirect merger or acquisition. For the avoidance of doubt, to the extent that the Company complies with its obligations pursuant to
this Section 4.16 with respect to any securities that are convertible or exchangeable into (or exercisable for) Common Stock, the Purchaser shall not have an additional right to purchase pursuant to this Section 4.16 additional securities
as a result of the issuance of New Securities upon the conversion, exchange or exercise of such earlier issued securities (whether or not Purchaser exercised its right to purchase such earlier issued securities). A Purchaser may assign the right to
exercise the subscription rights set forth in this Section 4.16 to any Affiliate or Person who shares a common discretionary investment adviser with such Purchaser that agrees in writing for the benefit of the Company to be bound by the terms
of this Agreement, and any such assignee shall be included in the term “Purchaser” for purposes of this Section 4.16. 
 (b)        Notice.  In the event the Company proposes to offer New Securities, it shall give the Purchaser written notice (or, if such a written
notice would be required to be filed with the Commission, oral notice) of its intention, describing, to the extent then known, the price (or range of prices), anticipated amount of securities, timing and other terms upon which the Company proposes
to offer the same (including, in the case of a registered public offering and to the extent possible, a copy of the prospectus included in the registration statement filed with respect to such offering) no later than five Business Days, as the case
may be, after the initial filing of a registration statement with the Commission with respect to an underwritten public offering, after the commencement of marketing with respect to a Rule 144A offering or after the Company commences the marketing
of any other offering; provided that for purposes of this Section 4.16, in addition to providing notice to the Purchaser in accordance with Section 6.3, the Company shall use its commercially reasonable efforts to effect actual notice of
the Purchaser as promptly as practicable, including via telephone and/or electronic mail (provided that the 

  
 32 

 
Company shall contact only those persons listed in the “Address for Notices” section of such Purchaser’s signature page to this Agreement and shall have no obligation to use
electronic mail if such electronic mail would be required to be filed with the Commission). The Company may provide such notice to the Purchaser on a confidential basis (the Purchaser shall keep the information conveyed by notice confidential) prior
to public disclosure of such offering. The Purchaser shall have ten days from the date of receipt of such notice (or, in the case or a “shelf takedown” from a shelf registration statement, two days from the receipt of such notice) (such
ten or two day period, as applicable, the “Response Period”) to notify the Company in writing whether it will exercise such subscription rights and as to the amount of New Securities the Purchaser desires to purchase, up to the
maximum amount calculated pursuant to Section 4.16(a). Such notice shall constitute a binding commitment by the Purchaser to purchase the amount of New Securities so specified at the price and other terms set forth in the Company’s notice
to it and subject to other customary closing conditions and provided, with respect to a registered offering, that such notice shall not be binding unless and until the Company can accept a binding commitment under applicable laws and regulations.
The failure of the Purchaser to respond within the Response Period shall be deemed to be a waiver of Purchaser’s rights under this Section 4.16 only with respect to the offering described in the applicable notice. 

(c)        Purchase Mechanism.  If the Purchaser exercises its
subscription rights provided in this Section 4.16, the closing of the purchase of the New Securities with respect to which such right has been exercised shall take place within 30 days after the giving of notice of such exercise, which period
of time shall be extended for a maximum of 120 days in order to comply with applicable laws and regulations (including receipt of any applicable regulatory or shareholder approvals), except that in the case of a registered public offering the
closing shall occur in accordance with market convention. Each of the Company and the Purchaser agrees to use its commercially reasonable efforts to secure any regulatory or shareholder approvals or other consents, and to comply with any law or
regulation necessary in connection with the offer, sale and purchase of such New Securities, including calling a meeting of the Company’s shareholders to vote on any matters requiring shareholder approval in connection with the offer, sale and
purchase of such New Securities (the “Subscription Proposals”), recommending to the Company’s shareholders that such shareholders vote in favor of any Subscription Proposals and soliciting proxies for approval of any
Subscription Proposals. 
 (d)        Failure to
Purchase.  In the event the Purchaser fails to exercise its subscription rights provided in this Section 4.16 within the Response Period, or, if so exercised, the Purchaser is unable to consummate such purchase within the time
period specified in Section 4.16(c) above for any reason, the Company shall thereafter be entitled during the period of 60 days following the conclusion of the applicable period to sell or enter into an agreement (pursuant to which the sale of
the New Securities covered thereby shall be consummated, if at all, within 30 days from the date of said agreement) to sell the New Securities not elected to be purchased pursuant to this Section 4.16 or which the Purchaser does not or is
unable to purchase, at a price and upon terms no more favorable to purchasers of such securities than were specified in the Company’s notice to the Purchaser. Notwithstanding the foregoing, if such sale is subject to the receipt of any
regulatory or shareholder approval or consent or the expiration of any waiting period, the time period during which such sale may be consummated shall be extended until the expiration of five Business Days after all such approvals or consents have
been obtained or waiting periods expired, but in no event shall such time period exceed 120 days from the date of the applicable agreement with respect to such sale. In the event the Company has not sold the New Securities or entered into an
agreement to sell the New Securities within said 60-day period (or sold and issued New Securities in accordance with the foregoing within 30 days from the date of said agreement (as such period may be extended in the manner described above for a
period not to exceed 120 days from the date of said agreement)), the Company shall not thereafter offer, issue or sell such New Securities without first offering such securities to the Purchaser in the manner provided above. 

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

(f)        Cooperation.    The Company and Purchaser
shall cooperate in good faith to facilitate the exercise of Purchaser’s rights pursuant to this Section 4.16, including securing any required approvals or consents. 

(g)        Exception to Time
Periods.    Notwithstanding the foregoing provisions of this Section 4.16, in the event that New Securities are to be offered or issued by the Company at the written direction of the applicable federal banking regulator
of the Company or the Bank, the Company may proceed to complete such issuance prior to the expiration of such time periods, so long as provision is made in such issuance such that subsequent to the time periods set forth in Section 4.16(b) and
Section 4.16(c) either (i) purchasers of such New Securities will be obligated to transfer that portion of such New Securities to any Purchaser properly electing to participate in such issuance pursuant to this Section 4.16 sufficient
to satisfy the terms of this Section 4.16 or (ii) the Company shall issue an incremental amount of such New Securities to those Purchasers properly electing to participate in such issuance pursuant to this Section 4.16 sufficient to
satisfy the terms of this Section 4.16. 
 ARTICLE 5: 

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

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

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

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

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

  
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 (e)       Company
Deliverables.    The Company shall have delivered the Company Deliverables in accordance with Section 2.2(a). 
 (f)        Compliance Certificate.  The Company shall have delivered to each Purchaser a certificate, dated as of the Closing Date and signed by
its Chief Executive Officer or its Chief Financial Officer, certifying to the fulfillment of the conditions specified in Sections 5.1 (a) and (b) in the form attached hereto as Exhibit F. 

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

(h)       Termination.    This Agreement shall not have
been terminated as to such Purchaser in accordance with Sections 6.16 herein. 

(i)        Minimum Investment Amounts.    The Company
shall have received aggregate gross proceeds from the sale of the Preferred Shares to Purchasers hereunder of not less than $40 million on or prior to the Closing Date. 

(j)        Ownership Limitations.      The
sale of the Preferred Shares pursuant to this Agreement will not cause any Purchaser, together with its Affiliates and any other Persons with which it is acting in concert or whose holdings would otherwise be required to be aggregated with such
Purchaser’s holdings for purposes of the BHCA or the CIBCA, to directly or indirectly (assuming conversion of the Preferred Shares) collectively become the beneficial owner (as determined under Rule 13d-3 under the Exchange Act) of more than
(i) 9.9% of the number of shares of Common Stock issued and outstanding or (ii)14.0% of the aggregate number of shares of Common Stock and Non-Voting Common Stock issued and outstanding. 

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

(l)        TARP Exchange Agreements.  The TARP Exchange
agreements shall be in full force and effect. 

  
 35 

 (m)       NASDAQ
Approval.    NASDAQ has reviewed the transactions contemplated hereby, including but not limited to the terms of the Preferred Shares set forth in the Articles of Amendment; NASDAQ has completed its review and has raised no
objections; and NASDAQ has raised no objections to the listing of the Common Stock issuable upon the consummation of (i) the conversion of the Preferred Stock and (ii) the TARP Exchange and any conversion of the Non-Voting Common Stock
that may be issued in connection therewith. 
 5.2      Conditions Precedent to
the Obligations of the Company to sell Preferred Shares.    The Company’s obligation to sell and issue the Preferred Shares at the Closing is subject to the fulfillment, on or prior to the Closing Date, of the following
conditions, any of which may be waived by the Company: 

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

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

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

(d)        Consents.    Other than the Required
Approvals contemplated in Section 3.1 (e)(i), (iii), (v) and (vi) above, the Company shall have obtained in a timely fashion any and all consents, permits, approvals, registrations and waivers necessary for consummation of the
purchase and sale of the Preferred Shares, all of which shall be and remain so long as necessary in full force and effect. 
 (e)        Purchasers Deliverables.    Such Purchaser shall have delivered its Purchaser Deliverables in accordance with
Section 2.2(b). 

(f)        Termination.    This Agreement shall not
have been terminated as to such Purchaser in accordance with Sections 6.16 herein. 

(g)        NASDAQ Approval.    NASDAQ has reviewed
the transactions contemplated hereby, including but not limited to the terms of the Preferred Shares set forth in the Articles of Amendment; NASDAQ has completed its review and has raised no objections; and NASDAQ has raised no objections to the
listing of the Common Stock issuable upon the consummation of (i) the conversion of the Preferred Stock and (ii) the TARP Exchange and any conversion of the Non-Voting Common Stock that may be issued in connection therewith. 

ARTICLE 6: 
 MISCELLANEOUS 

6.1      Fees and Expenses.    The Company shall pay the
reasonable legal fees and expenses of Greenberg Traurig, LLP, counsel to certain Purchasers, incurred by such Purchasers in connection with the transactions contemplated by the Transaction Documents and the TARP Exchange, up to a maximum

  
 36 

 
amount of $50,000 in the aggregate, which amount shall be paid directly by the Company to Greenberg Traurig, LLP at the Closing or paid by the Company to Greenberg Traurig, LLP upon termination
of this Agreement so long as such termination did not occur as a result of a material breach by such Purchasers of any of their obligations hereunder (as the case may be). Except as set forth above and elsewhere in the Transaction Documents, the
parties hereto shall be responsible for the payment of all expenses incurred by them in connection with the preparation and negotiation of the Transaction Documents and the consummation of the transactions contemplated hereby. The Company shall pay
all amounts owed to the Placement Agent relating to or arising out of the transactions contemplated hereby. The Company shall pay all Transfer Agent fees, stamp taxes and other taxes and duties levied in connection with the sale and issuance of the
Securities to the Purchasers. 
 6.2        Entire
Agreement.    The Transaction Documents, together with the Exhibits and Schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements,
understandings, discussions and representations, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules. At or after the Closing, and without further consideration,
the Company and the Purchasers will execute and deliver to the other such further documents as may be reasonably requested in order to give practical effect to the intention of the parties under the Transaction Documents. 

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

					
		 	If to the Company:	  	Yadkin Valley Financial Corporation
		 		  	209 North Bridge Street
		 		  	Elkin, North Carolina 28621
		 		  	Attention: Joseph Towell, President and Chief Executive Officer
		 		  	Fax: 704-873-8657
		 		  	E-mail: Joe.Towell@YadkinValleyBank.com
			
		 	With a copy to:	  	Nelson, Mullins, Riley & Scarborough, LLP
		 		  	Poinsett Plaza, 9th Floor
		 		  	104 South Main Street
		 		  	Greenville, SC 29601
		 		  	Attn: Neil E. Grayson
		 		  	Fax: (864) 232-2359
		 		  	E-mail: neil.grayson@nelsonmullins.com
			
		 	If to a Purchaser:	  	To the address set forth under such Purchaser’s name on the signature page hereof;

  
 37 

 or such other address as may be designated in writing hereafter, in the same manner, by
such Person. 
 6.4        Amendments: Waivers: No Additional
Consideration.  No amendment or waiver of any provision of this Agreement will be effective with respect to any party unless made in writing and signed by an officer or a duly authorized representative of such party. No consideration
shall be offered or paid to any Purchaser to amend or consent to a waiver or modification of any provision of any Transaction Document unless the same consideration is also offered to all Purchasers who then hold Preferred Shares. 

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

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

6.7        No Third-Party Beneficiaries.  This Agreement is
intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than, solely with respect to the provisions of
Section 4.8, the Indemnified Persons. 
 6.8        Governing
Law.  This Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed entirely within such State. Each party agrees that all Proceedings concerning
the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents, or any other matter related thereto (whether brought against a party hereto or its respective Affiliates, employees
or agents) whether in tort or contract or at law or in equity, shall be commenced and maintained exclusively in the United States District Court for the Southern District of New York or the Supreme Court of the State of New York for the County of
New York (the (“New York Courts”) Each party hereto hereby irrevocably submits to the exclusive jurisdiction of such New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the
jurisdiction of any such New York Courts, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such
Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE 

  
 38 

 
LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 

6.9        Survival.    Subject to applicable statute
of limitations, the representations, warranties, agreements and covenants contained herein shall survive the Closing and the delivery of the Preferred Shares; provided, that the representations and warranties of the Company and each Purchaser
shall survive the Closing and the delivery of Preferred Shares for a period of one year. 

6.10      Execution.    This Agreement may be executed in two or
more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that the parties
need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof. 
 6.11      Severability.    If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and
upon so agreeing, shall incorporate such substitute provision in this Agreement. 

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

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

6.14      Payment Set Aside.    To the extent that the Company
makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, 

  
 39 

 
disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy law,
state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment
had not been made or such enforcement or setoff had not occurred. 

6.15      Independent Nature of Purchasers’ Obligations and
Rights.    The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the
obligations of any other Purchaser under any Transaction Document. The decision of each Purchaser to purchase Preferred Shares pursuant to the Transaction Documents has been made by such Purchaser independently of any other Purchaser and
independently of any information, materials, statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial or otherwise) or prospects of the Company or any Subsidiary
which may have been made or given by any other Purchaser or by any agent or employee of any other Purchaser, and no Purchaser and any of its agents or employees shall have any liability to any other Purchaser (or any other Person) relating to or
arising from any such information, materials, statement or opinions. Nothing contained herein or in any Transaction Document, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an
association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each
Purchaser acknowledges that no other Purchaser has acted as agent for such Purchaser in connection with making its investment hereunder and that no Purchaser will be acting as agent of such Purchaser in connection with monitoring its investment in
the Securities or enforcing its rights under the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose. It is expressly understood and agreed that each provision contained in this Agreement is between the
Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers. 
 6.16      Termination, Rescission. 
 (a)        This Agreement may be terminated and the sale and purchase of the Preferred Shares abandoned at any time prior to the Closing by either the Company or
any Purchaser (with respect to itself only) upon written notice to the other, if the Closing has not been consummated on or prior to 5:00 p.m., New York City time, on the Outside Date; provided, however, that the right to terminate this Agreement
under this Section 6.16 shall not be available to any Person whose failure to comply with its obligations under this Agreement has been the cause of or resulted in the failure of the Closing to occur on or before such time. In the event that
any Purchaser terminates this Agreement with respect to itself, the Company shall give prompt notice of the termination to each other Purchaser, and, as necessary, work in good faith to restructure the transaction to allow each Purchaser that does
not exercise a termination right to purchase the full number of Securities set forth below such Purchaser’s name on the signature page of this Agreement while remaining in compliance with Section 4.12. Nothing in this Section 6.16
shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or the other Transaction Documents or to impair the right of any party to compel specific performance by any other
party of its obligations under this Agreement or the other Transaction Documents. In the event of a termination pursuant to this Section 6.16, the Company shall promptly notify all non-terminating Purchasers. Upon a termination in accordance
with this Section 6.16, 

  
 40 

 
the Company and the terminating Purchaser(s) shall not have any further obligation or liability (including arising from such termination) to the other, and no Purchaser will have any liability to
any other Purchaser under the Transaction Documents as a result therefrom. 

(b)        Notwithstanding anything to the contrary contained in (and without
limiting any similar provisions of) the Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods
therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and
rights. 
 (c)        Promptly following the termination of this
Agreement pursuant to this Section 6.16, the Company shall provide written notice to the Escrow Agent notifying the Escrow Agent that this Agreement has been terminated. Pursuant to the terms of the Escrow Agreement, the Escrow Agent shall
(A) distribute to each Purchaser such Purchaser’s Subscription Amount and (B) advise the Transfer Agent that the share issuance instructions with respect to such Purchaser shall be null and void. 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 

  
 41 

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

					
	Yadkin Valley Financial Corporation	 	
			
	By:	 	  
	 	
		 	Name:	 	
		 	Title:	 	

  
 [REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK] 
 [SIGNATURE PAGES FOR PURCHASERS FOLLOW] 

  
 42 

							
		 	PURCHASER:	 	  

							
				
		 	 By:	 	 	 	

							
		 	Name:	 	  
	 	
			
		 	Title:	 	
		
		 	Aggregate Purchase Price (Subscription Amount): $
		
		 	Number of Preferred Shares to be Acquired:
			
		 	Tax ID No.:	 	
		
		 	Address for Notice:
			
		 	  
	 	
		 	  
	 	
		 	  
	 	
		 	Telephone No.:
		 	Facsimile No.:	 	
		 	E-mail Address:
		 	Attention:	 	
		
		 	Wire instructions for return of escrowed funds:
			
		 	  
	 	
		 	  
	 	
		 	  
	 	

  

					
	 Delivery Instructions: (if
 different than above)
	 	

					
	c/o	 	  
	 	

					
	Street:	 	  
	 	

					
	City/State/Zip:	 	  
	 	

					
	Attention:	 	  
	 	

					
	Telephone No.:	 	  
	 	

 [Signature Page to Securities Purchase Agreement] 

  
 43 

 EXHIBITS   

 

	A:	 Form of Series A Preferred Stock Articles of Amendment 

	B:	 Form of Registration Rights Agreement 

	C-1:	 Accredited Investor Questionnaire 

	C-2:	 Stock Certificate Questionnaire 

	D:	 Form of Opinion of Company’s Counsel 

	E:	 Form of Secretary’s Certificate 

	F:	 Form of Officer’s Certificate 

	G:	 Subsidiaries of the Company 

	H:	 Form of Escrow Agreement 

	I:	 List of Agreements Re: Registration Rights 

  
 44 

 EXHIBIT A 

Form of Series A Preferred Stock Articles 
 of Amendment 

  
 45 

 EXHIBIT B   

Form of Registration Rights Agreement 

  
 46 

 EXHIBIT C-1   

ACCREDITED INVESTOR QUESTIONNAIRE 
 (ALL INFORMATION WILL BE TREATED CONFIDENTIALLY) 
  

	To:	 Yadkin Valley Financial Corporation 

 This Investor Questionnaire (“Questionnaire”) must be completed by each potential investor in connection with the offer and sale of shares of mandatorily convertible cumulative nonvoting
perpetual preferred stock, Series A, $1,000.00 liquidation preference per share (the “Preferred Shares”), of Yadkin Valley Financial Corporation, a North Carolina corporation (the “Corporation”). The Preferred
Shares are being offered and sold by the Corporation without registration under the Securities Act of 1933, as amended (the “Securities Act”), and the securities laws of certain states, in reliance on the exemptions contained in
Section 4(2) of the Securities Act and on Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state laws. The Corporation must determine that a potential investor meets certain suitability requirements
before offering or selling Preferred Shares to such investor. The purpose of this Questionnaire is to assure the Corporation that each investor will meet the applicable suitability requirements. The information supplied by you will be used in
determining whether you meet such criteria, and reliance upon the private offering exemptions from registration is based in part on the information herein supplied. 
 This Questionnaire does not constitute an offer to sell or a solicitation of an offer to buy any security. Your answers will be kept strictly confidential. However, by signing this Questionnaire, you will
be authorizing the Corporation to provide a completed copy of this Questionnaire to such parties as the Corporation deems appropriate in order to ensure that the offer and sale of the Preferred Shares will not result in a violation of the Securities
Act or the securities laws of any state and that you otherwise satisfy the suitability standards applicable to purchasers of the Preferred Shares. All potential investors must answer all applicable questions and complete, date and sign this
Questionnaire. Please print or type your responses and attach additional sheets of paper if necessary to complete your answers to any item. 
  

 

					
	 PART A.            BACKGROUND
INFORMATION

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

  
 47 

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

  

					
	Type of entity:	 	  
	 	  

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

 
 Yes
       
  
 No         
 If an
individual: 
 Residence Address: 
  

Telephone Number: 
  

 

																							
	Age:	 	  
	 	  
	 		 	Citizenship:	  	  
	 	  
	 		 	Where registered to vote:	 	  
	 	  
	 	

 Set forth in the space provided below the state(s), if any, in the United States in which you maintained your residence
during the past two years and the dates during which you resided in each state: 
 Are you a director or executive officer of the Corporation?

  
 Yes 

No 
  

					
	Social Security or Taxpayer Identification No.    	  	  
	 	  

  
 48 

	PART B.	ACCREDITED INVESTOR OUESTIONNAIRE 

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

   (1) A bank as defined in Section 3(a)(2) of the Securities Act, or any savings
and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity; 

   (2) A broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934; 
    (3) An insurance company as defined in
Section 2(13) of the Securities Act; 
    (4) An investment company
registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that act; 
    (5) A Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958;

    (6) A plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; 

   (7) An employee benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the
employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors; 

   (8) A private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940; 
   
(9) An organization described in Section 501(c)(3) of the Internal Revenue Code, a corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the Preferred Shares, with total
assets in excess of $5,000,000; 
    (10) A trust, with total assets in
excess of $5,000,000, not formed for the specific purpose of acquiring the Preferred Shares, whose purchase is directed by a sophisticated person who has such knowledge and experience in financial and business matters that such person is capable of
evaluating the merits and risks of investing in the Company; 
   (11) A
natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of his purchase exceeds $1,000,000 (See Note 11 below); 

  (12) A natural person who had an individual income in excess of $200,000 in each of
the two most recent years, or joint income with that person’s spouse in excess of $300,000, in each of those years, and has a reasonable expectation of reaching the same income level in the current year; 

  
 49 

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

Note 11. For purposes of calculating net worth under paragraph (11): 

(A) The person’s primary residence shall not be included as an asset; 

(B) Indebtedness that is secured by the person’s primary residence, up to the estimated fair market value of the
primary residence at the time of the sale of securities, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of sale of securities exceeds the amount outstanding 60 days before such time,
other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability); and 
 (C) Indebtedness that is secured by the person’s primary residence in excess of the estimated fair market value of the primary residence at the time of the sale of securities shall be included as a
liability. 
  

									
	A.	 	FOR EXECUTION BY AN INDIVIDUAL:	 	
					
		 		 		 	By	 	
					
		 	Date	 		 		 	
					
		 		 		 	Print Name:	 	
			
	B.	 	FOR EXECUTION BY AN ENTITY:	 	
				
		 		 	          Entity Name:	 	
					
		 		 		 	By	 	
					
		 	Date	 		 		 	
					
		 		 		 	Print Name:	 	                            
  
					
		 		 		 	Title:	 	

  
 50 

							
	C.	 	ADDITIONAL SIGNATURES (if required by partnership, corporation or trust
			
		 	            document):	 	
			
		 		 	                Entity Name:
				
		 		 		 	By
				
		 	Date	 		 	
				
		 		 		 	Print Name:
                               
				
		 		 		 	Title:
			
		 		 	                Entity Name:
				
		 		 		 	By
				
		 	Date	 		 	
				
		 		 		 	Print Name:
                               
				
		 		 		 	Title:

  
 51 

 EXHIBIT C-2  

Stock Certificate Questionnaire 

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

 

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

  

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

 

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

 
  

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

  
 52 

 EXHIBIT D  

Form of Opinion of Company Counsel* 
  

	1.	 The Company is a corporation validly existing and in good standing under the laws of the State of North Carolina. 

 

	2.	 The Bank is a corporation validly existing and in good standing under the laws of the State of North Carolina. 

 

	3.	 The Company has the corporate power to execute, deliver and perform its obligations under the Transaction Documents, including to issue the
Preferred Shares and, upon obtaining Shareholder Approvals, the Underlying Shares. 

  

	4.	 The Company is a registered bank holding company under the Bank Holding Company Act of 1956, as amended (the “BHCA”).

  

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

  

	6.	 The Company has authorized the execution, delivery and performance of each of the Transaction Documents by all necessary corporate action, including
the issuance of the Preferred Shares and, upon obtaining Shareholder Approvals, the Underlying Shares, and the execution and filing of Articles of Amendment to create a class of preferred stock entitled “Mandatorily Convertible Cumulative
Non-Voting Preferred Stock, Series A” (the “Series A Preferred Stock Articles of Amendment”). 

  

	7.	 The Transaction Documents have been duly executed and delivered by the Company and, assuming due authorization, execution and delivery by the
Purchasers (to the extent they are a party), each of the Transaction Documents is valid, binding and enforceable against the Company in accordance with its terms. 

 

	8.	 The execution and delivery of each of the Transaction Documents by the Company, the consummation by the Company of the transactions provided for in
the Transaction Documents, and the performance by the Company of its obligations under the Transaction Documents, including the issuance of the Preferred Shares and, upon obtaining Shareholder Approvals, the Underlying Shares, do not:
(a) violate any provision of the Company’s Articles of Incorporation, as amended to date, or Bylaws; (b) violate or constitute a breach of or default under any contract, agreement or instrument filed (or incorporated by reference) as
an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 (the “Annual Report”) and as an exhibit to any report filed with the SEC subsequent to the filing of the Annual Report and prior to the
date hereof; or (c) violate any applicable law or any order of any court or governmental authority that is binding on the Company or any of its assets. 

 

	9.	 No consent, approval, authorization or other action by, or filing or registration with, any Federal governmental authority or any governmental
authority of the State of North Carolina is required to be obtained or made by the Company for the execution and delivery by the Company of each of the Transaction Documents, for consummation by the Company of the transactions provided for therein,
or for the performance by the Company of its obligations under the Transaction 

  
 53 

	 	 
Documents, except for consents, approvals, authorizations, actions, filings and registrations (a) in connection with the filing of each of the Series A Preferred Stock Articles of Amendment
with the Secretary of State of the State of North Carolina, which filing has been made; (b) as may be required by federal securities laws with respect to the Company’s obligations under the Registration Rights Agreement; (c) related
to required blue sky filings; (d) in connection with the filing of a Form D pursuant to Securities and Exchange Commission Regulation D; (e) required in accordance with Section 4.6 of the Agreement; and (f) in accordance with the
issuance of the Preferred Shares and the Underlying Common Stock on NASDAQ. 

  

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

 

	11.	 The Preferred Shares to be issued to the Purchasers pursuant to the Agreement have been duly authorized by all necessary corporate action on the
part of the Company and, when issued, delivered and paid for as provided for in the Agreement, will be validly issued, fully paid and nonassessable and will not be issued in violation of any preemptive right. The Underlying Shares to be issued
pursuant to the Series A Articles of Amendment have been authorized on the part of the Company, have been duly and validly reserved for issuance by all necessary corporate action on the part of the Company and, when issued as provided for in each
respective Articles of Amendment, will be validly issued, fully paid and nonassessable and will not be issued in violation of any preemptive right. 

  

	12.	 The Series A Preferred Stock Articles of Amendment has been filed with the Secretary of State of the State of North Carolina.

  

	13.	 The Company is not and, after giving effect to the issuance of the Preferred Shares, will not be on the date hereof an “investment
company” as defined in the Investment Company Act of 1940. 

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

  
 54 

 EXHIBIT E  

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

	1.	 Attached hereto as Exhibit A is a true, correct and complete copy of the resolutions duly adopted by the Board of Directors of the Company at
a meeting held on October [  ], 2012. Such resolutions have not in any way been amended, modified, revoked or rescinded, have been in full force and effect since their adoption to and including the date hereof and are now in full
force and effect. 

  

	2.	 The Company’s Articles of Incorporation, as amended, are attached hereto as Exhibit B; its Bylaws are attached hereto as Exhibit
C. Such Articles of Incorporation, as amended, and Bylaws, constitute true, correct and complete copies of the Articles of Incorporation, as amended, and Bylaws as in effect on the date hereof. 

 

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

 

					
	 Name
	  	 Position 
	  	 Signature 

		  		  	

  
 55 

 IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of this
       day of [      ], 2012. 
  

			
	  
	 	
	Secretary	 	

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

 

			
	  
	 	
	[Chief Financial Officer]	 	

  
 56 

					
		 	Resolutions	  	EXHIBIT A

  

			
		  	57

					
		 	Articles of Incorporation	  	EXHIBIT B

  

			
		  	58

					
		 	Bylaws	  	EXHIBIT C

  

			
		  	59

 EXHIBIT F  

Form of Officer’s Certificate 
 The undersigned, the [Chief Financial Officer] [Chief Executive Officer] of Yadkin Valley Financial Corporation, a North Carolina corporation (the “Company”), pursuant to
Section 5.1(g) of the Securities Purchase Agreement, dated as of October [    ], 2012] by and among the Company and the investors signatory thereto (the “Securities Purchase Agreement”), hereby
represents, warrants and certifies as follows (capitalized terms used but not otherwise defined herein shall have the meaning set forth in the Securities Purchase Agreement): 

 

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

  

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

IN WITNESS WHEREOF, the undersigned has executed this certificate this       
day of [      ], 2012. 
  

									
		 		 	  
	 		 	
		
		 	[Chief Financial Officer] [Chief Executive Officer]

  
 60

 EXHIBIT G 

Subsidiaries of the Company 

Subsidiaries of the Company 
 Yadkin Valley Bank and Trust Company 
 Yadkin Valley Statutory Trust I 

American Community Capital Trust II, Ltd. 
 North Carolina Title Center, LLC 
 Subsidiaries of Yadkin Valley Bank and Trust Company

 Sidus Financial, LLC 
 Main Street Investment Services, Inc. 
 PBRE, Inc. 

Yadkin Valley Condominium Association, LLC 
 Eastover Advisors, LLC 
 Green Street I, LLC 

Green Street II, LLC 
 Green Street III, LLC 
 Green Street IV, LLC 

Green Street V, LLC 

Subsidiary to Sidus Financial, LLC 
 Sidus Reinsurance Ltd. 

  
 61

 EXHIBIT H 

Form of Escrow Agreement 

  
 62

 Exhibit I 

List of Agreements Containing Registration Rights 
 Registration Rights Agreement by and among the Company and certain shareholders in connection with the Share Exchange Agreement dated October 23, 2012 by and among the Company and certain
shareholders. 

  
 63

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