Document:

EX-10.1

 Exhibit 10.1 

SUBORDINATED NOTE PURCHASE AGREEMENT 

This SUBORDINATED NOTE PURCHASE AGREEMENT (this “Agreement”) is dated as of September 18, 2020, and is made by and among
Pinnacle Bankshares Corporation, a Virginia corporation (the “Company”), and the several purchasers of the Subordinated Notes (as defined herein) identified on the signature pages hereto (each, a “Purchaser” and,
together with the several other purchasers of the Subordinated Notes, the “Purchasers”). 
 RECITALS 

WHEREAS, the Company has requested that the Purchasers purchase from the Company up to $8,000,000 in aggregate principal amount of
Subordinated Notes, which aggregate principal amount is intended to qualify as Tier 2 Capital (as defined herein); 
 WHEREAS, the Company
has engaged Performance Trust Capital Partners, LLC, as its exclusive placement agent (“Placement Agent”) for the offering of the Subordinated Notes; 

WHEREAS, each of the Purchasers is an institutional “accredited investor” as such term is defined in Rule 501(a)(1), (2), (3) or
(7) of Regulation D (“Regulation D”) promulgated under the Securities Act of 1933, as amended (the “Securities Act”), or a “qualified institutional buyer” as such term is defined in Rule 144A
promulgated under the Securities Act (“QIB”); 
 WHEREAS, the offer and sale of the Subordinated Notes by the Company is
being made in reliance upon the exemptions from registration available under Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D; and 

WHEREAS, each Purchaser is willing to purchase from the Company a Subordinated Note in the principal amount set forth on such Purchaser’s
respective signature page to this Agreement (the “Subordinated Note Amount”) in accordance with the terms, subject to the conditions and in reliance on, the recitals, representations, warranties, covenants and agreements set forth
herein and in the Subordinated Notes. 
 NOW, THEREFORE, in consideration of the mutual covenants, conditions and agreements herein
contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties, intending to be legally bound, hereto hereby agree as follows: 

AGREEMENT 
  

	1.	 DEFINITIONS. 

1.1 Defined Terms. The following capitalized terms used in this Agreement and in the Subordinated Notes have the
meanings defined or referenced below. Certain other capitalized terms used only in specific sections of this Agreement may be defined in such sections. 

“Affiliate(s)” means, with respect to any Person, such Person’s immediate family members, partners, members or parent
and subsidiary corporations, and any other Person directly or indirectly controlling, controlled by, or under common control with said Person and their respective Affiliates. 

“Agreement” has the meaning set forth in the preamble hereto. 

  
 1 

 “Bank” means First National Bank, a national banking association organized
under the laws of the United States and wholly-owned subsidiary of the Company. 
 “Business Day” means any day other than
a Saturday, Sunday or any other day on which banking institutions in the Commonwealth of Virginia are permitted or required by any applicable law or executive order to close. 

“Bylaws” means the Bylaws of the Company, including all amendments thereto, as in effect on the Closing Date. 

“Charter” means the Articles of Incorporation of the Company, including all amendments thereto, as in effect on the Closing
Date. 
 “Closing” has the meaning set forth in Section 2.5. 

“Closing Date” means September 18, 2020. 

“Company” has the meaning set forth in the preamble hereto and shall include any successors to the Company. 

“Company Covered Person” has the meaning set forth in Section 4.3(d). 

“Company’s Reports” means (a) audited consolidated financial statements of the Company for the year ended
December 31, 2019; (b) the unaudited consolidated financial statements of the Company for the period ended June 30, 2020; and (c) the Company’s reports for the period ended December 31, 2019 and the period ended
June 30, 2020 as filed with the Federal Reserve as required by regulations of the Federal Reserve. 
 “Disbursements”
has the meaning set forth in Section 3.1. 
 “Disqualification Event” has the meaning set forth
in Section 4.3(d). 
 “Equity Interest” means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person which is not a corporation, and any and all warrants, options or other rights to purchase any of the foregoing. 

“Event of Default” has the meaning set forth in the Subordinated Notes. 

“Exchange Act” means the Securities Exchange Act of 1934, as amended. 

“FDIC” means the Federal Deposit Insurance Corporation. 

“Federal Reserve” means the Board of Governors of the Federal Reserve System. 

“GAAP” means generally accepted accounting principles in effect from time to time in the United States of America. 

“Governmental Agency(ies)” means, individually or collectively, any federal, state, county or local governmental department,
commission, board, regulatory authority or agency (including, without limitation, each applicable Regulatory Agency) with jurisdiction over the Company or a Subsidiary of the Company. 

  
 2 

 “Governmental Licenses” has the meaning set forth in
Section 4.4. 
 “Hazardous Materials” means flammable explosives, asbestos, urea formaldehyde
insulation, polychlorinated biphenyls, radioactive materials, hazardous wastes, toxic or contaminated substances or similar materials, including, without limitation, any substances which are “hazardous substances,” “hazardous
wastes,” “hazardous materials” or “toxic substances” under the Hazardous Materials Laws and/or other applicable environmental laws, ordinances or regulations. 

“Hazardous Materials Laws” mean any laws, regulations, permits, licenses or requirements pertaining to the protection,
preservation, conservation or regulation of the environment which relates to real property, including: the Clean Air Act, as amended, 42 U.S.C. § 7401 et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. § 1251
et seq.; the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. § 6901 et seq.; the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (including the Superfund Amendments
and Reauthorization Act of 1986), 42 U.S.C. § 9601 et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C. § 2601 et seq.; the Occupational Safety and Health Act, as amended, 29 U.S.C. § 651, the Emergency
Planning and Community Right-to-Know Act of 1986, 42 U.S.C. § 11001 et seq.; the Mine Safety and Health Act of 1977, as amended, 30 U.S.C. § 801 et
seq.; the Safe Drinking Water Act, 42 U.S.C. § 300f et seq.; and all comparable state and local laws, laws of other jurisdictions or orders and regulations. 

“Indebtedness” means: (a) all items arising from the borrowing of money that, according to GAAP as in effect from time
to time, would be included in determining total liabilities as shown on the consolidated balance sheet of the Company; and (b) all obligations secured by any lien on property owned by the Company or any Subsidiary whether or not such
obligations shall have been assumed; provided, however, Indebtedness shall not include deposits or other indebtedness created, incurred or maintained in the ordinary course of the Company’s or the Bank’s business (including,
without limitation, federal funds purchased, advances from any Federal Home Loan Bank, secured deposits of municipalities, letters of credit issued by the Company or the Bank and repurchase arrangements) and consistent with customary banking
practices and applicable laws and regulations. 
 “Leases” means all leases, licenses or other documents providing for the
use or occupancy of any portion of any Property, including all amendments, extensions, renewals, supplements, modifications, sublets and assignments thereof and all separate letters or separate agreements relating thereto. 

“Material Adverse Effect” means, with respect to any Person, any change or effect that (a) is or would be reasonably
likely to be material and adverse to the financial condition, results of operations or business or assets of such Person, or (b) would materially impair the ability of such Person to perform its respective obligations under any of the
Transaction Documents, or otherwise materially impede the consummation of the transactions contemplated hereby; provided, however, that “Material Adverse Effect” shall not be deemed to include the impact, either alone or in
combination, of (i) changes in banking and similar laws, rules or regulations of general applicability or interpretations thereof by Governmental Agencies, (ii) changes in GAAP or regulatory accounting requirements applicable to financial
institutions and their holding companies generally, (iii) changes after the date of this Agreement in general economic or capital market conditions affecting financial institutions or their market prices generally and not specifically related
to the Company, the Bank or the Purchasers, (iv) direct effects of compliance with this Agreement on the operating performance of the Company, the Bank or the Purchasers, including expenses incurred by the Company, the Bank or the Purchasers in
consummating the transactions contemplated by this Agreement, (v) changes in global or national political conditions, including the outbreak or escalation of war or acts of terrorism, (vi) actions required by any Governmental Agency
affecting financial institutions generally and not specifically related to the Company, the Bank or the Purchasers, (vii) pandemics, epidemics, disease outbreaks, public health events or other similar events, and (viii) the effects of any
action or omission taken by the Company with the prior written consent of the Purchasers, and vice versa, or as otherwise contemplated by this Agreement and the Subordinated Notes. 

  
 3 

 “Maturity Date” means September 30, 2030. 

“Person” means an individual, a corporation (whether or not for profit), a partnership, a limited liability company, a joint
venture, an association, a trust, an unincorporated organization, a government or any department or agency thereof (including a Governmental Agency) or any other entity or organization. 

“Placement Agent” has the meaning set forth in the Recitals. 

“Property” means any real property owned or leased by the Company or any Affiliate or Subsidiary of the Company. 

“Purchaser” or “Purchasers” has the meaning set forth in the preamble hereto. 

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

“Regulation D” has the meaning set forth in the Recitals. 

“Regulatory Agency” means any federal or state agency charged with the supervision or regulation of depository institutions
or holding companies of depository institutions, or engaged in the insurance of depository institution deposits, or any court, administrative agency or commission or other authority, body or agency having supervisory or regulatory authority with
respect to the Company, the Bank or any of their Subsidiaries. 
 “Secondary Market Transaction” has the meaning set forth
in Section 5.5. 
 “Securities Act” has the meaning set forth in the Recitals. 

“Subordinated Note” means the Subordinated Note (or collectively, the “Subordinated Notes”) in the form
attached as Exhibit A hereto, as amended, restated, supplemented or modified from time to time, and each Subordinated Note delivered in substitution or exchange for such Subordinated Note. 

“Subordinated Note Amount” has the meaning set forth in the Recitals. 

“Subsidiary” means with respect to any Person, any corporation or entity (other than a trust) in which a majority of the
outstanding Equity Interest is directly or indirectly owned by such Person. 
 “Tier 2 Capital” has the meaning given to
the term “Tier 2 capital” in 12 C.F.R. Part 217, as amended, modified and supplemented and in effect from time to time or any replacement thereof. 

“Transaction Documents” has the meaning set forth in Section 3.2(a). 

1.2 Interpretations. The foregoing definitions are equally applicable to both the singular and plural forms of the terms
defined. The words “hereof”, “herein” and “hereunder” and words of like import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The word
“including” when used in this Agreement without the phrase “without limitation,” shall mean “including, without limitation.” All references to time of day herein are references to Eastern Time unless otherwise
specifically provided. All references to this Agreement and the Subordinated Notes shall be deemed to be to such documents as amended, modified or restated from time to time. With respect to any reference in this Agreement to any defined term,
(i) if such defined term refers 

  
 4 

 
to a Person, then it shall also mean all heirs, legal representatives and permitted successors and assigns of such Person, and (ii) if such defined term refers to a document, instrument or
agreement, then it shall also include any amendment, replacement, extension or other modification thereof. 
 1.3 Exhibits
Incorporated. All Exhibits attached hereto are hereby incorporated into this Agreement. 
  

	2.	 SUBORDINATED DEBT. 

2.1 Certain Terms. Subject to the terms and conditions herein contained, the Company proposes to issue and sell to the
Purchasers, severally and not jointly, Subordinated Notes in an aggregate principal amount equal to the aggregate of the Subordinated Note Amounts. The Purchasers, severally and not jointly, each agree to purchase the Subordinated Notes from the
Company on the Closing Date in accordance with the terms of, and subject to the conditions and provisions set forth in, this Agreement and the Subordinated Notes. The Subordinated Note Amounts shall be disbursed in accordance with
Section 3.1. The Subordinated Notes shall bear interest per annum as set forth in the Subordinated Notes. The unpaid principal balance of the Subordinated Notes plus all accrued but unpaid interest thereon shall be due and
payable on the Maturity Date, or such earlier date on which such amount shall become due and payable on account of (a) acceleration by the Purchasers in accordance with the terms of the Subordinated Notes and this Agreement or (b) the
Company’s delivery of a notice of redemption or repayment in accordance with the terms of the Subordinated Notes. Any partial redemption of the Subordinated Notes shall be made on a pro rata pass-through distribution of principal among all of
the Subordinated Notes outstanding at the time thereof. 
 2.2 Subordination. The Subordinated Notes shall be
subordinated in accordance with the subordination provisions set forth therein. 
 2.3 Maturity Date. On the Maturity
Date, all sums due and owing under this Agreement and the Subordinated Notes shall be repaid in full. The Company acknowledges and agrees that the Purchasers have not made any commitments, either express or implied, to extend the terms of the
Subordinated Notes past their Maturity Date, and shall not extend such terms beyond the Maturity Date unless the Company and the Purchasers hereafter specifically otherwise agree in writing. 

2.4 Unsecured Obligations. The obligations of the Company to the Purchasers under the Subordinated Notes shall be
unsecured and not subject to any guarantee of any Affiliate of the Company. 
 2.5 The Closing. The closing of the sale
and purchase of the Subordinated Notes (the “Closing”) shall occur remotely via the electronic or other exchange of documents and signature pages at 10:00 a.m. (Eastern Time) on the Closing Date, or at such other place or
time or on such other date as the parties hereto may agree. 
 2.6 Payments. The Company agrees that matters concerning
payments and application of payments shall be as set forth in this Agreement and in the Subordinated Notes. 
 2.7 No
Right of Offset. Each Purchaser hereby expressly waives any right of offset it may have against the Company or any of its Subsidiaries. 

2.8 Use of Proceeds. The Company shall use the net proceeds from the sale of Subordinated Notes to support the purchase
price consideration to be paid by the Company in connection with its pending merger with Virginia Bank Bankshares, Inc. (“Virginia Bank”), if consummated, and to provide optionality for various growth opportunities and for general
corporate purposes. 

  
 5 

	3.	 DISBURSEMENT. 

3.1 Disbursement. On the Closing Date, assuming all of the terms and conditions set forth in
Section 3.2 and Section 3.3 have been satisfied by the Company and the Company has executed and delivered to each of the Purchasers this Agreement and such Purchaser’s Subordinated Note
and any other related documents in form and substance reasonably satisfactory to the Purchasers, each Purchaser shall disburse to the Company in immediately available funds the Subordinated Note Amount set forth on each Purchaser’s respective
signature page to this Agreement in exchange for a Subordinated Note with a principal amount equal to such Subordinated Note Amount (the “Disbursement”). The Company will deliver to the respective Purchaser one or more certificates
representing the Subordinated Notes in definitive form (or provide evidence of the same with the original to be delivered by the Company by overnight delivery on the next calendar day in accordance with the delivery instructions of the Purchaser),
registered in such names and denominations as such Purchasers may request. 
 3.2 Conditions to the Purchasers’
Obligation. The obligation of each Purchaser to consummate the purchase of the Subordinated Notes to be purchased by such Purchaser at Closing and to effect the Disbursement is subject to delivery by or at the direction of the Company
to such Purchaser each of the following (or written waiver by such Purchaser prior to the Closing of such delivery): 
 (a)
Transaction Documents. This Agreement and the Subordinated Notes (collectively, the “Transaction Documents”), each duly authorized and executed by the Company. 

(b) Authority Documents. 

(i) A copy, certified by the Secretary or Assistant Secretary of the Company, of the Charter of the Company; 

(ii) A certificate of existence of the Company issued by the State Corporation Commission of the Commonwealth of
Virginia; 
 (iii) A copy, certified by the Secretary or Assistant Secretary, of the Bylaws of the Company; 

(iv) A copy, certified by the Secretary or Assistant Secretary of the Company, of the resolutions of the board of
directors of the Company, and any committee thereof, authorizing the issuance of the Subordinated Notes and the execution, delivery and performance of the Transaction Documents; 

(v) An incumbency certificate of the Secretary or Assistant Secretary of the Company certifying the names of the officer
or officers of the Company authorized to sign the Transaction Documents and the other documents provided for in this Agreement; and 

(vi) The opinion of Troutman Pepper Hamilton Sanders LLP, counsel to the Company, dated as of the Closing Date,
substantially in the form set forth at Exhibit B attached hereto addressed to the Purchasers and the Placement Agent. 
 (c)
Other Documents. Such other certificates, affidavits, schedules, resolutions, notes and/or other documents which are provided for hereunder or as a Purchaser may reasonably request. 

  
 6 

 (d) Aggregate Investments. Prior to, or contemporaneously with the
Closing, each Purchaser shall have actually subscribed for the Subordinated Note Amount set forth on such Purchaser’s signature page to this Agreement. 

3.3 Conditions to the Company’s Obligation. With respect to a given Purchaser, the obligation of the Company
to consummate the sale of the Subordinated Notes and to effect the Closing is subject to delivery by or at the direction of such Purchaser to the Company of this Agreement, duly authorized and executed by such Purchaser and the Company’s
receipt of the Subordinated Note Amount set forth on such Purchaser’s signature page. 
  

	4.	 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. 

The Company hereby represents and warrants to each Purchaser as follows: 

4.1 Organization and Authority. 

(a) The Company is a duly organized corporation, is validly existing and in good standing under the laws of the Commonwealth of
Virginia and has all requisite corporate power and authority to conduct its business and activities as presently conducted, to own its properties, and to perform its obligations under the Transaction Documents. The Company is duly qualified as a
foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to
qualify or to be in good standing would not result in a Material Adverse Effect. The Company is duly registered as a bank holding company under the Bank Holding Company Act of 1956, as amended. 

(b) Set forth on Schedule 4.1(b) are the direct or indirect Subsidiaries of the Company. Each Subsidiary of the Company other than the
Bank either has been duly organized and is validly existing as a corporation or limited liability company, or, in the case of the Bank, has been duly chartered and is validly existing as a national banking association organized under the laws of the
United States, in each case in good standing under the laws of the jurisdiction of its incorporation or organization, has corporate power and authority to own, lease and operate its properties and to conduct its business and is duly qualified as a
foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to
qualify or to be in good standing would not reasonably be expected to result in a Material Adverse Effect on the Company or such Subsidiary. Except for the shares of the Bank’s capital stock pledged to Community Bankers’ Bank in connection
with the Company’s line of credit, all of the issued and outstanding shares of capital stock or other equity interests in each Subsidiary of the Company have been duly authorized and validly issued, are fully paid and non-assessable and are owned by the Company, directly or through Subsidiaries of the Company, free and clear of any security interest, mortgage, pledge, lien, encumbrance or claim; none of the outstanding shares of
capital stock of, or other Equity Interests in, any Subsidiary of the Company were issued in violation of the preemptive or similar rights of any security holder of such Subsidiary of the Company or any other entity. 

(c) The deposit accounts of the Bank are insured by the FDIC up to applicable limits. The Bank has not received any notice or other
information indicating that the Bank is not an “insured depository institution” as defined in 12 U.S.C. § 1813, nor has any event occurred which could reasonably be expected to materially and adversely affect the status of the Bank as
an FDIC-insured institution. 
 4.2 Capital Stock and Related Matters. The Charter of the Company authorizes the
Company to issue 3,000,000 shares of common stock, par value $3.00 per share and 1,000,000 shares of preferred stock, par value $3.00 per share. As of the date of this Agreement, there are 1,563,922 shares of

  
 7 

 
the Company’s common stock issued and outstanding and no shares of the Company’s preferred stock issued and outstanding. All of the outstanding capital stock of the Company has been
duly authorized and validly issued and is fully paid and non-assessable. There are, as of the date hereof, no outstanding options, rights, warrants or other agreements or instruments obligating the Company to
issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of the capital stock of the Company or obligating the Company to grant, extend or enter into any such agreement or commitment to any Person other than the Company
except pursuant to (i) the Company’s equity incentive plans duly adopted by the Company’s Board of Directors and (ii) that certain agreement and plan of reorganization, dated January 21, 2020 and amended on June 9,
2020, and the related plan of merger pursuant to which Virginia Bank will merge with and into the Company, with the Company being the surviving company in the merger. 

4.3 No Impediment to Transactions. 

(a) Transaction is Legal and Authorized. The issuance of the Subordinated Notes, the borrowing of the aggregate of the
Subordinated Note Amount, the execution of the Transaction Documents and compliance by the Company with all of the provisions of the Transaction Documents are within the corporate and other powers of the Company. 

(b) Agreement. This Agreement has been duly authorized, executed and delivered by the Company, and, assuming due
authorization, execution and delivery by the other parties hereto, constitutes the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors’ rights generally or by general equitable principles. 

(c) Subordinated Notes. The Subordinated Notes have been duly authorized by the Company and when executed by the Company
and issued, delivered to and paid for by the Purchasers in accordance with the terms of this Agreement, will have been duly executed, authenticated, issued and delivered, and will constitute legal, valid and binding obligations of the Company and
enforceable against the Company in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors’ rights generally or by
general equitable principles. 
 (d) Exemption from Registration; No Disqualification Event. Neither the Company, nor
any of its Subsidiaries or Affiliates, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Subordinated
Notes. Assuming the accuracy of the representations and warranties of each Purchaser set forth in this Agreement, the Subordinated Notes will be issued in a transaction exempt from the registration requirements of the Securities Act. No “bad
actor” disqualifying event described in Rule 506(d)(1)(i)-(viii) of Regulation D (a “Disqualification Event”) is applicable to the Company or, to the Company’s knowledge, any Person described in Rule 506(d)(1) (each, a
“Company Covered Person”). The Company has exercised reasonable care to determine whether any Company Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure
obligations under Rule 506(e) of Regulation D. 
 (e) No Defaults or Restrictions. Neither the execution and delivery
of the Transaction Documents by the Company nor compliance by the Company with their respective terms and conditions will (whether with or without the giving of notice or lapse of time or both) (i) violate, conflict with or result in a breach
of, or constitute a default under: (A) the Charter or Bylaws of the Company; (B) any of the terms, obligations, covenants, conditions or provisions of any corporate restriction or of any contract, agreement, indenture, mortgage, deed of
trust, pledge, bank loan or credit agreement, or any other 

  
 8 

 
agreement or instrument to which the Company or Bank, as applicable, is now a party or by which it or any of its properties may be bound or affected; (C) any judgment, order, writ,
injunction, decree or demand of any court, arbitrator, grand jury, or Governmental Agency applicable to the Company or the Bank; or (D) any statute, rule or regulation applicable to the Company, except, in the case of items (B), (C) or (D), for
such violations and conflicts that would not reasonably be expected to have, singularly or in the aggregate, a Material Adverse Effect on the Company and its Subsidiaries taken as a whole, or (ii) result in the creation or imposition of any
lien, charge or encumbrance of any nature whatsoever upon any property or asset of the Company. Neither the Company nor the Bank is in default in the performance, observance or fulfillment of any of the terms, obligations, covenants, conditions or
provisions contained in any indenture or other agreement creating, evidencing or securing Indebtedness of any kind or pursuant to which any such Indebtedness is issued, or any other agreement or instrument to which the Company or the Bank, as
applicable, is a party or by which the Company or the Bank, as applicable, or any of its properties may be bound or affected, except, in each case, only such defaults that would not reasonably be expected to have, singularly or in the
aggregate, a Material Adverse Effect on the Company. 
 (f) Governmental Consent. No governmental orders, permissions,
consents, approvals or authorizations are required to be obtained by the Company that have not been obtained, and no registrations or declarations are required to be filed by the Company that have not been filed in connection with, or, in
contemplation of, the execution and delivery of, and performance under, the Transaction Documents, except for applicable requirements, if any, of the Securities Act, the Exchange Act or state securities laws or “blue sky” laws of the
various states and any applicable federal or state banking laws and regulations. 
 4.4 Possession of Licenses and
Permits. The Company and its Subsidiaries possess such permits, licenses, approvals, consents and other authorizations (collectively, “Governmental Licenses”) issued by the appropriate Governmental Agencies necessary
to conduct the business now operated by them except where the failure to possess such Governmental Licenses would not, singularly or in the aggregate, have a Material Adverse Effect on the Company; the Company and each Subsidiary of the Company is
in compliance with the terms and conditions of all such Governmental Licenses, except where the failure so to comply would not, individually or in the aggregate, have a Material Adverse Effect on the Company; all of the Governmental Licenses are
valid and in full force and effect, except where the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not have a Material Adverse Effect on the Company; and neither the
Company nor any Subsidiary of the Company has received any notice of proceedings relating to the revocation or modification of any such Governmental Licenses. 

4.5 Financial Condition. 

(a) Company Financial Statements. The financial statements included in the Company’s Reports (including the related
notes, where applicable), which have been made available to the Purchasers (i) have been prepared from, and are in accordance with, the books and records of the Company; (ii) fairly present in all material respects the results of
operations, cash flows, changes in stockholders’ equity and financial position of the Company and its consolidated Subsidiaries, as applicable, for the respective fiscal periods or as of the respective dates therein set forth (subject in the
case of unaudited statements to recurring year-end audit adjustments normal in nature and amount), as applicable; (iii) complied as to form, as of their respective dates of filing in all material respects
with applicable accounting and banking requirements as applicable, with respect thereto; and (iv) have been prepared in accordance with GAAP consistently applied during the periods involved, except, in each case, (x) as indicated in such
statements or in the notes thereto, (y) for any statement therein or omission therefrom that was corrected, amended, or supplemented or otherwise disclosed or updated in a subsequent Company’s Report, and (z) to the extent that any
unaudited interim financial statements do not contain the footnotes required by GAAP, 

  
 9 

 
and were or are subject to normal and recurring year-end adjustments, which were not or are not expected to be material in amount, either individually or
in the aggregate. The books and records of the Company have been, and are being, maintained in all material respects in accordance with GAAP and any other applicable legal and accounting requirements. The Company does not have any material liability
of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether due or to become due), except for those liabilities that are reflected or reserved against on the consolidated balance sheet of the Company contained in the
Company’s Reports for the Company’s most recently completed quarterly or annual fiscal period, as applicable, and for liabilities incurred in the ordinary course of business consistent with past practice or in connection with this
Agreement and the transactions contemplated hereby. 
 (b) Absence of Default. Since the end of the Company’s last
fiscal year ended December 31, 2019, no event has occurred which either of itself or with the lapse of time or the giving of notice or both, would give any creditor of the Company the right to accelerate the maturity of any material
Indebtedness of the Company. The Company is not in default under any other Lease, agreement or instrument, or any law, rule, regulation, order, writ, injunction, decree, determination or award, noncompliance with which could reasonably be expected
to result in a Material Adverse Effect on the Company. 
 (c) Solvency. After giving effect to the consummation of the
transactions contemplated by this Agreement, the Company has capital sufficient to carry on its business and transactions and is solvent and able to pay its debts as they mature. No transfer of property is being made and no Indebtedness is being
incurred in connection with the transactions contemplated by this Agreement with the intent to hinder, delay or defraud either present or future creditors of the Company or any Subsidiary of the Company. 

(d) Ownership of Property. The Company and each of its Subsidiaries has good and marketable title as to all real property
owned by it and good title to all assets and properties owned by the Company and such Subsidiary in the conduct of its businesses, whether such assets and properties are real or personal, tangible or intangible, including assets and property
reflected in the most recent balance sheet contained in the Company’s Reports or acquired subsequent thereto (except to the extent that such assets and properties have been disposed of in the ordinary course of business, since the date of such
balance sheet), subject to no encumbrances, liens, mortgages, security interests or pledges, except (i) those items which secure liabilities for public or statutory obligations or any discount with, borrowing from or other obligations to the
Federal Home Loan Bank, inter-bank credit facilities, reverse repurchase agreements or any transaction by the Bank acting in a fiduciary capacity, (ii) statutory liens for amounts not yet delinquent or which are being contested in good faith
and (iii) such as do not, individually or in the aggregate, materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company or any of its Subsidiaries. The
Company and each of its Subsidiaries, as lessee, has the right under valid and existing Leases of real and personal properties that are material to the Company or such Subsidiary, as applicable, in the conduct of its business to occupy or use all
such properties as presently occupied and used by it. Such existing Leases and commitments to Lease constitute or will constitute operating Leases for both tax and financial accounting purposes except as otherwise disclosed in the Company’s
Reports and the Lease expense and minimum rental commitments with respect to such Leases and Lease commitments are as disclosed in all material respects in the Company’s Reports. 

4.6 No Material Adverse Effect. Since the end of the Company’s last fiscal year ended December 31, 2019,
there has been no development or event which has had or could reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole. 

  
 10 

 4.7 Legal Matters. 

(a) Compliance with Law. The Company and each of its Subsidiaries (i) has complied with and (ii) is not under
investigation with respect to, and, to the Company’s knowledge, has not been threatened to be charged with or given any notice of any material violation of any applicable statutes, rules, regulations, orders and restrictions of any domestic or
foreign government, or any instrumentality or agency thereof, having jurisdiction over the conduct of its business or the ownership of its properties, except where any such failure to comply or violation would not reasonably be expected to have a
Material Adverse Effect on the Company and its Subsidiaries taken as a whole. The Company and each of its Subsidiaries is in compliance with, and at all times prior to the date hereof has been in compliance with, (x) all statutes, rules,
regulations, orders and restrictions of any domestic or foreign government, or any Governmental Agency, applicable to it, and (y) its own privacy policies and written commitments to customers, consumers and employees, concerning data
protection, the privacy and security of personal data, and the nonpublic personal information of its customers, consumers and employees, in each case except where any such failure to comply, would not result, individually or in the aggregate, in a
Material Adverse Effect. At no time during the two years prior to the date hereof has the Company or any of its Subsidiaries received any written notice asserting any violations of any of the foregoing. 

(b) Regulatory Enforcement Actions. The Company, the Bank and the Company’s other Subsidiaries, if any, are in
compliance in all material respects with all laws administered by and regulations of any Governmental Agency applicable to it or to them, the failure to comply with which would have a Material Adverse Effect on the Company or the applicable
Subsidiary. None of the Company, the Bank, the Company’s or the Bank’s Subsidiaries nor any of their officers or directors is now operating under any restrictions, agreements, memoranda, commitment letter, supervisory letter or similar
regulatory correspondence, or other commitments (other than restrictions of general application) imposed by any Governmental Agency, nor are, to the Company’s knowledge, (i) any such restrictions threatened, (ii) any agreements,
memoranda or commitments being sought by any Governmental Agency, or (iii) any legal or regulatory violations previously identified by, or penalties or other remedial action previously imposed by, any Governmental Agency remains unresolved.

 (c) Pending Litigation. There are no actions, suits, proceedings or written agreements pending, or, to the
Company’s knowledge, threatened or proposed, against the Company or any of its Subsidiaries at law or in equity or before or by any federal, state, municipal, or other governmental department, commission, board, or other administrative agency,
domestic or foreign, that, either separately or in the aggregate, would reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole, or affect issuance or payment of the Subordinated Notes; and
neither the Company nor any of its Subsidiaries is a party to or named as subject to the provisions of any order, writ, injunction, or decree of, or any written agreement with, any court, commission, board or agency, domestic or foreign, that either
separately or in the aggregate, will have a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole. 
 (d)
Environmental. No Property is or, to the Company’s knowledge, has been a site for the use, generation, manufacture, storage, treatment, release, threatened release, discharge, disposal, transportation or presence of any Hazardous
Materials and neither the Company nor any of its Subsidiaries has engaged in such activities. There are no claims or actions pending or, to the Company’s knowledge, threatened against the Company or any of its Subsidiaries by any Governmental
Agency or by any other Person relating to any Hazardous Materials or pursuant to any Hazardous Materials Law. 
 (e) Brokerage
Commissions. Except for commissions paid or payable to the Placement Agent, neither the Company nor any Affiliate of the Company is obligated to pay any brokerage commission or finder’s fee to any Person in connection with the
transactions contemplated by this Agreement. 

  
 11 

 (f) Investment Company Act. Neither the Company nor any of its
Subsidiaries is an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended. 

4.8 Internal Accounting Controls. The Company, the Bank and each other Subsidiary has established and maintains proper
and adequate internal accounting controls that provide reasonable assurance that (a) all material transactions are executed with the authorization of the Company’s management, (b) all material transactions are recorded as necessary to
permit preparation of financial statements in accordance with GAAP, (c) access to the Company’s material assets is permitted only in accordance with the authorization of the Company’s management. Such internal accounting controls are
effective to provide reasonable assurance regarding the reliability of the Company’s financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with GAAP. Since the conclusion of the
Company’s last completed fiscal year, to the Company’s knowledge, there has not been and there currently is not (x) any material deficiency in the design or operation of its internal accounting controls which is reasonably likely to
have a Material Adverse Effect on such system of internal accounting controls, or (b) any fraud that involves management or other employees who have a role in the Company’s or the Bank’s internal accounting controls. 

4.9 Tax Matters. The Company, Bank and each Subsidiary of the Company have (a) 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 (b) 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. 

4.10 Exempt Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in this
Agreement, no registration under the Securities Act is required for the offer and sale of the Subordinated Notes by the Company to the Purchasers. 

4.11 Representations and Warranties Generally. The representations and warranties of the Company set forth in this
Agreement or in any other document delivered to the Purchasers by or on behalf of the Company pursuant to or in connection with this Agreement are true and correct as of the date hereof and as otherwise specifically provided herein or therein. 

 

	5.	 GENERAL COVENANTS, CONDITIONS AND AGREEMENTS. 

The Company hereby further covenants and agrees with each Purchaser as follows: 

5.1 Compliance with Transaction Documents. The Company shall comply with, observe and timely perform each and every one
of its covenants, agreements and obligations under the Transaction Documents. 
 5.2 Affiliate Transactions. The
Company shall not itself, nor shall it cause, permit or allow any of its Subsidiaries to enter into any material transaction, including, the purchase, sale or exchange of property or the rendering of any service, with any Affiliate of the Company
except in the ordinary course of business and pursuant to the reasonable requirements of the Company’s or such Affiliate’s business and upon terms consistent with applicable laws and regulations and reasonably found by the appropriate
board(s) of directors to be fair and reasonable and no less favorable to the Company or such Affiliate than would be obtained in a comparable arm’s length transaction with a Person not an Affiliate. 

  
 12 

 5.3 Compliance with Laws. 

(a) Generally. The Company shall comply and cause the Bank and each of its other Subsidiaries to comply in all material
respects with all applicable statutes, rules, regulations, orders and restrictions in respect of the conduct of its business and the ownership of its properties, except, in each case, where such noncompliance would not reasonably be expected to have
a Material Adverse Effect on the Company. 
 (b) Regulated Activities. The Company shall not itself, nor shall it
cause, permit or allow the Bank or any other of its Subsidiaries to (i) engage in any business or activity not permitted by all applicable laws and regulations, except where such business or activity (or the effect thereof if such laws and
regulations were enforced) would not reasonably be expected to have a Material Adverse Effect on the Company, the Bank and/or such of its Subsidiaries or (ii) make any loan or advance secured by the capital stock of another bank or depository
institution, or acquire the capital stock, assets or obligations of or any interest in another bank or depository institution, in each case other than in accordance with applicable laws and regulations and safe and sound banking practices. 

(c) Taxes. The Company shall and shall cause the Bank and any other of its Subsidiaries to promptly pay and discharge all
taxes, assessments and other governmental charges imposed upon the Company, the Bank or any other of the Company’s Subsidiaries or upon the income, profits, or property of the Company or any Subsidiary and all claims for labor, material or
supplies which, if unpaid, might by law become a lien or charge upon the property of the Company, the Bank or any other of the Company’s Subsidiaries. Notwithstanding the foregoing, none of the Company, the Bank or any other of the
Company’s Subsidiaries shall be required to pay any such tax, assessment, charge or claim, so long as the validity thereof is being contested in good faith by appropriate proceedings, and appropriate reserves therefor are being maintained on
the books of the Company, the Bank and such other Subsidiary. 
 (d) Corporate Existence. The Company will do or cause
to be done all things necessary to preserve and keep in full force and effect: (i) the corporate existence of the Company; (ii) the existence (corporate or other) of each Subsidiary; and (iii) the rights (constituent governing
documents and statutory), licenses and franchises of the Company and each of its Subsidiaries; provided, however, that the Company will not be required to preserve the existence (corporate or other) of any of its Subsidiaries or any such right,
license or franchise of the Company or any of its Subsidiaries if the Board of Directors of the Company determines that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries taken as a
whole and that the loss thereof will not be disadvantageous in any material respect to the Noteholders (as defined under the Subordinated Notes). 

(e) Dividends, Payments, and Guarantees During Event of Default. Upon the occurrence of an Event of Default (as defined
under the Subordinated Notes), until such Event of Default is cured by the Company or waived by the Noteholders (as defined under the Subordinated Notes) in accordance with Section 16 (Waiver and Consent) of the Subordinated Notes and except as
required by any federal or state Governmental Agency, the Company shall not (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock;
(ii) make any payment of principal of, or interest or premium, if any, on, or repay, repurchase or redeem any of the Company’s Indebtedness that ranks equal with or junior to the Subordinated Notes; or (iii) make any payments under
any guarantee that ranks equal with or junior to the Subordinated Notes, other than (A) any dividends or distributions in shares of, or options, warrants or rights to subscribe for or purchase shares of, any class of the Company’s common
stock; (B) any declaration of a non-cash dividend in connection with the implementation of a shareholders’ rights plan, or the issuance of stock under any such plan in the future, or the redemption
or repurchase of any such rights pursuant thereto; (C) as a result of a reclassification of the Company’s capital stock or the exchange or conversion of one class or series of 

  
 13 

 
the Company’s capital stock for another class or series of the Company’s capital stock; (D) the purchase of fractional interests in shares of the Company’s capital stock
pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged; or (E) purchases of any class of the Company’s common stock related to the issuance of common stock or rights under any
benefit plans for the Company’s directors, officers or employees or any of the Company’s dividend reinvestment plans. 

(f) Tier 2 Capital. If all or any portion of the Subordinated Notes ceases to be deemed to be Tier 2 Capital, other than
due to the limitation imposed on the capital treatment of subordinated debt during the five (5) years immediately preceding the Maturity Date of the Subordinated Notes, the Company will immediately notify the Noteholder (as defined in the
Subordinated Note), and thereafter the Company and the Noteholder (as defined in the Subordinated Note) will work together in good faith to execute and deliver all agreements as reasonably necessary in order to restructure the applicable portions of
the obligations evidenced by the Subordinated Notes to qualify as Tier 2 Capital; provided, however, that nothing contained in this Agreement shall limit the Company’s right to redeem the Subordinated Notes upon the occurrence of
a Tier 2 Capital Event as described in the Subordinated Notes. 
 5.4 Absence of Control. It is the intent of the
parties to this Agreement that in no event shall the Purchasers, by reason of any of the Transaction Documents, be deemed to control, directly or indirectly, the Company, and the Purchasers shall not exercise, or be deemed to exercise, directly or
indirectly, a controlling influence over the management or policies of the Company. 
 5.5 Secondary Market
Transactions. Each Purchaser shall have the right at any time and from time to time to securitize its Subordinated Notes or any portion thereof in a single asset securitization or a pooled loan securitization of rated single or multi-class
securities secured by or evidencing ownership interests in the Subordinated Notes (each such securitization is referred to herein as a “Secondary Market Transaction”). In connection with any such Secondary Market Transaction, the
Company shall, at the Company’s expense, reasonably cooperate with the Purchasers and otherwise reasonably assist the Purchasers in satisfying the market standards to which Purchasers customarily adhere or which may be reasonably required in
the marketplace or by applicable rating agencies in connection with any such Secondary Market Transaction. Subject to any written confidentiality obligation, all information regarding the Company may be furnished, without liability except in the
case of gross negligence or willful misconduct, to any Purchaser and to any Person reasonably deemed necessary by such Purchaser in connection with participation in such Secondary Market Transaction. All documents, financial statements, appraisals
and other data relevant to the Company or the Subordinated Notes may be retained by any such Person, subject to the terms of any applicable confidentiality agreements. 

5.6 Rule 144A Information. While any Subordinated Notes remain “restricted securities” within the meaning of
the Securities Act, the Company will make available, upon request, to any seller of such Subordinated Notes the information specified in Rule 144A(d)(4) under the Securities Act, unless the Company is then subject to Section 13 or 15(d) of the
Exchange Act. 
  

	6.	 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS. 

Each Purchaser hereby represents and warrants to the Company, and covenants with the Company, severally and not jointly, as follows: 

6.1 Legal Power and Authority. It has all necessary power and authority to execute, deliver and perform its obligations
under this Agreement and to consummate the transactions contemplated hereby. It is an entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization or incorporation. 

  
 14 

 6.2 Authorization and Execution. The execution, delivery and
performance of this Agreement has been duly authorized by all necessary action on the part of such Purchaser, and, assuming due authorization, execution and delivery by the other parties hereto, this Agreement is a legal, valid and binding
obligation of such Purchaser, enforceable against such Purchaser in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting
creditors’ rights generally or by general equitable principles. 
 6.3 No Conflicts. Neither the execution,
delivery or performance of the Transaction Documents nor the consummation of any of the transactions contemplated thereby will conflict with, violate, constitute a breach of or a default (whether with or without the giving of notice or lapse of time
or both) under (a) its organizational documents, (b) any agreement to which it is party, (c) any law applicable to it or (d) any order, writ, judgment, injunction, decree, determination or award binding upon or affecting it. 

6.4 Purchase for Investment. Such Purchaser acknowledges that the Subordinated Notes have not been registered under the
Securities Act or under any state securities laws. It is purchasing the Subordinated Note pursuant to an exemption from registration under the Securities Act solely for its own account and not with a view to distribution and with no present
intention of reselling, distributing or otherwise disposing of the same. It has no present or contemplated agreement, undertaking, arrangement, obligation, Indebtedness or commitment providing for, or which is likely to compel, a disposition of the
Subordinated Notes in any manner. 
 6.5 Institutional Accredited Investor. It is and will be on the Closing Date
(a) an institutional “accredited investor” as such term is defined in Rule 501(a) of Regulation D and as contemplated by subsections (1), (2), (3) and (7) of Rule 501(a) of Regulation D, and has no less than $5,000,000 in
total assets, or (b) a QIB. 
 6.6 Financial and Business Sophistication. It has such knowledge and experience
in financial and business matters that it is capable of evaluating the merits and risks of the prospective investment in the Subordinated Notes. It has relied solely upon its own knowledge of, and/or the advice of its own legal, financial or
other advisors with regard to, the legal, financial, tax and other considerations involved in deciding to invest in the Subordinated Notes. 

6.7 Ability to Bear Economic Risk of Investment. It recognizes that an investment in the Subordinated Notes
involves substantial risk. It has the ability to bear the economic risk of the prospective investment in the Subordinated Notes, including the ability to hold the Subordinated Notes indefinitely, and further including the ability to bear a complete
loss of all of its investment in the Company. 
 6.8 Information. It acknowledges that: (a) it is not being
provided with the disclosures that would be required if the offer and sale of the Subordinated Notes were registered under the Securities Act, nor is it being provided with any offering circular or prospectus prepared in connection with the
offer and sale of the Subordinated Notes; (b) it has conducted its own examination of the Company and the terms of the Subordinated Notes to the extent it deems necessary to make its decision to invest in the Subordinated Notes; and (c) it
has availed itself of publicly available financial and other information concerning the Company to the extent it deems necessary to make its decision to purchase the Subordinated Notes. It has reviewed the information set forth in the Company’s
Reports, the exhibits hereto and the information contained in the data room established by the Company in connection with the transactions contemplated by this Agreement. 

6.9 Access to Information. It acknowledges that it and its advisors have been furnished with all materials
relating to the business, finances and operations of the Company that have been requested by 

  
 15 

 
it or its advisors and have been given the opportunity to ask questions of, and to receive answers from, persons acting on behalf of the Company concerning terms and conditions of the
transactions contemplated by this Agreement in order to make an informed and voluntary decision to enter into this Agreement. 
 6.10
Investment Decision. It has made its own investment decision based upon its own judgment, due diligence and advice from such advisors as it has deemed necessary and not upon any view expressed by any other Person or entity, including
the Placement Agent. Neither such inquiries nor any other due diligence investigations conducted by it or its advisors or representatives, if any, shall modify, amend or affect its right to rely on the Company’s representations and warranties
contained herein. It is not relying upon, and has not relied upon, any advice, statement, representation or warranty made by any Person by or on behalf of the Company, including, without limitation, the Placement Agent, except for the express
statements, representations and warranties of the Company made or contained in this Agreement. Furthermore, it acknowledges that (a) the Placement Agent has not performed any due diligence review on behalf of it and (b) nothing in this
Agreement or any other materials presented by or on behalf of the Company to it in connection with the purchase of the Subordinated Notes constitutes legal, tax or investment advice. 

6.11 Private Placement; No Registration; Restricted Legends. It understands and acknowledges that the Subordinated Notes
are being sold by the Company without registration under the Securities Act in reliance on the exemption from federal and state registration set forth in, respectively, Rule 506(b) of Regulation D promulgated under Section 4(a)(2) of the
Securities Act and Section 18 of the Securities Act, or any state securities laws, and accordingly, may be resold, pledged or otherwise transferred only if exemptions from the Securities Act and applicable state securities laws are available to
it. It is not subscribing for the Subordinated Notes as a result of or subsequent to any general solicitation or general advertising, in each case within the meaning of Rule 502(c) of Regulation D, including any advertisement, article, notice or
other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or presented at any seminar or meeting. It further acknowledges and agrees that all certificates or other instruments representing the
Subordinated Notes will bear the restrictive legend set forth in the form of Subordinated Note. It further acknowledges its primary responsibilities under the Securities Act and, accordingly, will not sell or otherwise transfer the Subordinated
Notes or any interest therein without complying with the requirements of the Securities Act and the rules and regulations promulgated thereunder and the requirements set forth in this Agreement. 

6.12 Placement Agent. It will purchase the Subordinated Note(s) directly from the Company and not from the Placement
Agent and understands that neither the Placement Agent nor any other broker or dealer has any obligation to make a market in the Subordinated Notes. 

6.13 Tier 2 Capital. If the Company provides notice as contemplated in Section 5.3(f) of the
occurrence of the event contemplated in such section, thereafter the Company and the Noteholder (as defined in the Subordinated Note) will work together in good faith to execute and deliver all agreements as reasonably necessary in order to
restructure the applicable portions of the obligations evidenced by the Subordinated Notes to qualify as Tier 2 Capital; provided, however, that nothing contained in this Agreement shall limit the Company’s right to redeem the Subordinated
Notes upon the occurrence of a Tier 2 Capital Event as described in the Subordinated Notes. 
 6.14 Accuracy of
Representations. It understands that each of the Placement Agent and the Company are relying upon the truth and accuracy of the foregoing representations, acknowledgements and agreements in connection with the transactions contemplated by
this Agreement. 
 6.15 Representations and Warranties Generally. The representations and warranties of the Purchaser
set forth in this Agreement are true and correct as of the date hereof and as otherwise specifically 

  
 16 

 
provided herein. Any certificate signed by a duly authorized representative of the Purchaser and delivered to the Company or to counsel for the Company shall be deemed to be a representation and
warranty by the Purchaser to the Company as to the matters set forth therein. 
  

	7.	 MISCELLANEOUS. 

7.1 Prohibition on Assignment by the Company. Except as described in Section 8(b) (Merger or Sale of Assets) of the
Subordinated Notes, the Company may not assign, transfer or delegate any of its rights or obligations under this Agreement or the Subordinated Notes without the prior written consent of all the Noteholders (as defined in the Subordinated Note). In
addition, in accordance with the terms of the Subordinated Notes, any transfer of such Subordinated Notes by the Noteholders (as defined in the Subordinated Note) must be made in accordance with the Assignment Form attached thereto and the
requirements and restrictions thereof. 
 7.2 Time of the Essence. Time is of the essence for this Agreement. 

7.3 Waiver or Amendment. Except as may apply to any particular waiving or consenting Noteholder, no waiver or amendment
of any term, provision, condition, covenant or agreement herein or in the Subordinated Notes shall be effective except with the consent of at least fifty percent (50%) of the aggregate principal amount (excluding any Subordinated Notes held by the
Company or any of its Affiliates) of the Subordinated Notes at the time outstanding; provided, however, that without the consent of each holder of an affected Subordinated Note, no such amendment or waiver may: (a) reduce
the principal amount of the Subordinated Note; (b) reduce the rate of or change the time for payment of interest on any Subordinated Note; (c) extend the maturity of any Subordinated Note, (d) change the currency in which payment of
the obligations of the Company under this Agreement and the Subordinated Notes are to be made; (e) lower the percentage of aggregate principal amount of outstanding Subordinated Notes required to approve any amendment of this Agreement or the
Subordinated Notes, (f) make any changes to Section 5 (Events of Default; Acceleration); Section 6 (Failure to Make Payments); Section 7 (Affirmative Covenants of the Company); Section 8 (Negative Covenants of the Company),
Section 14 (Priority) or Section 16 (Waiver and Consent) of the Subordinated Notes that adversely affects the rights of any holder of a Subordinated Note; or (g) disproportionately affect the rights of any of the holders of the then
outstanding Subordinated Notes. Notwithstanding the foregoing, the Company may amend or supplement the Subordinated Notes without the consent of the holders of the Subordinated Notes to cure any ambiguity, defect or inconsistency or to provide for
uncertificated Subordinated Notes in addition to or in place of certificated Subordinated Notes, or to make any change that does not adversely affect the rights of any holder of any of the Subordinated Notes. No failure to exercise or delay in
exercising, by a Purchaser or any holder of the Subordinated Notes, of any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege preclude any other or further
exercise thereof, or the exercise of any other right or remedy provided by law. The rights and remedies provided in this Agreement are cumulative and not exclusive of any right or remedy provided by law or equity. No notice or demand on the Company
in any case shall, in itself, entitle the Company to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Purchasers to any other or further action in any circumstances without notice or
demand. No consent or waiver, expressed or implied, by the Purchasers to or of any breach or default by the Company in the performance of its obligations hereunder shall be deemed or construed to be a consent or waiver to or of any other breach or
default in the performance of the same or any other obligations of the Company hereunder. Failure on the part of the Purchasers to complain of any acts or failure to act or to declare an Event of Default, irrespective of how long such failure
continues, shall not constitute a waiver by the Purchasers of their rights hereunder or impair any rights, powers or remedies on account of any breach or default by the Company. 

  
 17 

 7.4 Severability. Any provision of this Agreement which is
unenforceable or invalid or contrary to law, or the inclusion of which would adversely affect the validity, legality or enforcement of this Agreement, shall be of no effect and, in such case, all the remaining terms and provisions of this
Agreement shall subsist and be fully effective according to the tenor of this Agreement the same as though any such invalid portion had never been included herein. Notwithstanding any of the foregoing to the contrary, if any provisions of this
Agreement or the application thereof are held invalid or unenforceable only as to particular persons or situations, the remainder of this Agreement, and the application of such provision to persons or situations other than those to which it shall
have been held invalid or unenforceable, shall not be affected thereby, but shall continue valid and enforceable to the fullest extent permitted by law. 

7.5 Notices. Any notice which any party hereto may be required or may desire to give hereunder shall be deemed to
have been given if in writing and if delivered personally, or if mailed, postage prepaid, by U.S. registered or certified mail, return receipt requested, or if delivered by a responsible overnight commercial courier promising next business day
delivery, addressed: 
  

			
	 if to the Company:
	  	 Pinnacle Bankshares Corporation
 622 Broad
Street
 Altavista, Virginia 24517-1830
 Attention: Aubrey H.
Hall, III
 Chief Executive Officer

		
	 with a copy to:
	  	 Troutman Pepper Hamilton Sanders LLP
 1001
Haxall Point
 Richmond, Virginia 23219
 Attention: Susan S.
Ancarrow, Esq.

		
	 if to the Purchaser:
	  	 To the address indicated on the Purchaser’s

signature page hereto.

 or to such other address or addresses as the party to be given notice may have furnished in writing to the party seeking or
desiring to give notice, as a place for the giving of notice; provided that no change in address shall be effective until five (5) Business Days after being given to the other party in the manner provided for above. Any notice given in
accordance with the foregoing shall be deemed given when delivered personally or, if mailed, three (3) Business Days after it shall have been deposited in the U.S. mail as aforesaid or, if sent by overnight courier, the Business Day following
the date of delivery to such courier (provided next business day delivery was requested). 
 7.6 Successors and
Assigns. This Agreement shall inure to the benefit of the parties and their respective heirs, legal representatives, successors and assigns; except that, unless a Purchaser consents in writing, no assignment made by the Company in
violation of this Agreement shall be effective or confer any rights on any purported assignee of the Company. The term “successors and assigns” will not include a purchaser of any of the Subordinated Notes from any Purchaser merely because
of such purchase, but shall include a purchaser of any of the Subordinated Notes pursuant to an assignment complying with the Assignment Form attached to the Subordinated Note. 

7.7 No Joint Venture. Nothing contained herein or in any document executed pursuant hereto and no action or
inaction whatsoever on the part of a Purchaser, shall be deemed to make a Purchaser a partner or joint venturer with the Company. 

  
 18 

 7.8 Documentation. All documents and other matters required by any of
the provisions of this Agreement to be submitted or furnished to a Purchaser shall be in form and substance satisfactory to such Purchaser. 

7.9 Entire Agreement. This Agreement and the Subordinated Notes, along with any exhibits thereto, and any non-disclosure agreements between a Purchaser and the Company or the Placement Agent constitute the entire agreement between the parties hereto with respect to the subject matter hereof and may not be modified or
amended in any manner other than by supplemental written agreement executed by the parties hereto. No party, in entering into this Agreement, has relied upon any representation, warranty, covenant, condition or other term that is not set forth in
this Agreement or in the Subordinated Notes. 
 7.10 Choice of Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without giving effect to its laws or principles of conflict of laws. Nothing herein shall be deemed to limit any rights, powers or privileges which a Purchaser may have pursuant to any law of the
United States of America or any rule, regulation or order of any department or agency thereof and nothing herein shall be deemed to make unlawful any transaction or conduct by a Purchaser which is lawful pursuant to, or which is permitted by, any of
the foregoing. 
 7.11 No Third-Party Beneficiary. This Agreement is made for the sole benefit of the Company and the
Purchasers, and no other Person shall be deemed to have any privity of contract hereunder nor any right to rely hereon to any extent or for any purpose whatsoever, nor shall any other Person have any right of action of any kind hereon or be deemed
to be a third party beneficiary hereunder; provided, that the Placement Agent may rely on the representations and warranties contained herein to the same extent as if it were a party to this Agreement. 

7.12 Legal Tender of United States. All payments hereunder shall be made in coin or currency which at the time of payment
is legal tender in the United States of America for public and private debts. 
 7.13 Captions; Counterparts. Captions
contained in this Agreement in no way define, limit or extend the scope or intent of their respective provisions. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which
when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument. 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. 
 7.14 Knowledge; Discretion. All references
herein to a Purchaser’s or the Company’s or the Bank’s knowledge shall be deemed to mean the knowledge of such party based on the actual knowledge of such party’s Chief Executive Officer and Chief Financial Officer or such other
persons holding equivalent offices. Unless specified to the contrary herein, all references herein to an exercise of discretion or judgment by a Purchaser, to the making of a determination or designation by a Purchaser, to the application of a
Purchaser’s discretion or opinion, to the granting or withholding of a Purchaser’s consent or approval, to the consideration of whether a matter or thing is satisfactory or acceptable to a Purchaser, or otherwise involving the decision
making of a Purchaser, shall be deemed to mean that such Purchaser shall decide using the reasonable discretion or judgment of a prudent lender. 

7.15 Waiver of Right To Jury Trial. TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, THE PARTIES HERETO HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THAT THEY MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH ANY OF THE TRANSACTION 

  
 19 

 
DOCUMENTS, OR ANY OTHER STATEMENTS OR ACTIONS OF THE COMPANY OR THE PURCHASERS. THE PARTIES HERETO ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING
OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL SELECTED OF THEIR OWN FREE WILL. THE PARTIES HERETO FURTHER ACKNOWLEDGE THAT (I) THEY HAVE READ AND UNDERSTAND THE MEANING AND RAMIFICATIONS OF THIS WAIVER, (II) THIS WAIVER HAS BEEN REVIEWED BY
THE PARTIES HERETO AND THEIR COUNSEL AND IS A MATERIAL INDUCEMENT FOR ENTRY INTO THIS AGREEMENT AND (III) THIS WAIVER SHALL BE EFFECTIVE AS TO EACH OF SUCH TRANSACTION DOCUMENTS AS IF FULLY INCORPORATED THEREIN. 

7.16 Expenses. Except as otherwise provided in this Agreement, each of the parties will bear and pay all other costs and
expenses incurred by it or on its behalf in connection with the transactions contemplated pursuant to this Agreement. 
 7.17
Survival. Each of the representations and warranties set forth in this Agreement shall survive the consummation of the transactions contemplated hereby for a period of one year after the date hereof. Except as otherwise provided
herein, all covenants and agreements contained herein shall survive until, by their respective terms, they are no longer operative. 

[Signature Pages Follow] 

  
 20 

 IN WITNESS WHEREOF, the Company has caused this Subordinated Note Purchase Agreement to be
executed by its duly authorized representative as of the date first written above. 
  

			
	COMPANY:
	
	PINNACLE BANKSHARES CORPORATION

 
			
		
	By:	 	  

	Name:	 	
	Title:	 	

 IN WITNESS WHEREOF, the Purchaser has caused this Subordinated Note Purchase Agreement to be
executed by its duly authorized representative as of the date first written above. 
  

			
	PURCHASER:
	
	[INSERT PURCHASER NAME]
		
	By:	 	
	Name:	 	[●],
	Title:	 	[●]
	
	Address of Purchaser:
		
		 	[●]
		 	[●]
		 	[●]
		
		 	Email: [●]
	
	Principal Amount of Purchased Subordinated Note:
		
		 	$[●]

 SCHEDULE 4.1(b) 

Subsidiaries 
  

			
	Subsidiary	  	 State or Other Jurisdiction
 Of
Incorporation

		
	First National Bank	  	National banking association
		
	FNB Property Corp.	  	Virginia corporation
		
	First Properties, Inc.	  	Virginia corporation

 EXHIBIT A 

FORM OF SUBORDINATED NOTE 

 PINNACLE BANKSHARES CORPORATION 

5.25% FIXED-TO-FLOATING RATE SUBORDINATED NOTE DUE 2030

 THE INDEBTEDNESS EVIDENCED BY THIS SUBORDINATED NOTE IS SUBORDINATED AND JUNIOR IN RIGHT OF PAYMENT TO SENIOR INDEBTEDNESS (AS DEFINED IN SECTION
3 OF THIS SUBORDINATED NOTE) OF PINNACLE BANKSHARES CORPORATION (THE “COMPANY”), INCLUDING OBLIGATIONS OF THE COMPANY TO ITS GENERAL CREDITORS AND SECURED CREDITORS, AND IS UNSECURED. IT IS INELIGIBLE AS COLLATERAL FOR ANY
EXTENSION OF CREDIT BY THE COMPANY OR ANY OF ITS SUBSIDIARIES. IN THE EVENT OF LIQUIDATION ALL HOLDERS OF SENIOR INDEBTEDNESS OF THE COMPANY SHALL BE ENTITLED TO BE PAID IN FULL WITH SUCH INTEREST AS MAY BE PROVIDED BY LAW BEFORE ANY PAYMENT SHALL
BE MADE ON ACCOUNT OF PRINCIPAL OF OR INTEREST ON THIS SUBORDINATED NOTE. AFTER PAYMENT IN FULL OF ALL SUMS OWING TO SUCH HOLDERS OF SENIOR INDEBTEDNESS, THE HOLDER OF THIS SUBORDINATED NOTE, TOGETHER WITH THE HOLDERS OF ANY OBLIGATIONS OF THE
COMPANY RANKING ON A PARITY WITH THE SUBORDINATED NOTES, SHALL BE ENTITLED TO BE PAID FROM THE REMAINING ASSETS OF THE COMPANY THE UNPAID PRINCIPAL AMOUNT OF THIS SUBORDINATED NOTE PLUS ACCRUED AND UNPAID INTEREST THEREON BEFORE ANY PAYMENT OR OTHER
DISTRIBUTION, WHETHER IN CASH, PROPERTY OR OTHERWISE, SHALL BE MADE (I) WITH RESPECT TO ANY OBLIGATION THAT BY ITS TERMS EXPRESSLY IS JUNIOR IN THE RIGHT OF PAYMENT TO THE SUBORDINATED NOTES, (II) WITH RESPECT TO ANY INDEBTEDNESS BETWEEN
THE COMPANY AND ANY OF ITS SUBSIDIARIES OR AFFILIATES, OR (III) ON ACCOUNT OF ANY SHARES OF CAPITAL STOCK OF THE COMPANY. 
 THE INDEBTEDNESS EVIDENCED
BY THIS SUBORDINATED NOTE IS NOT A DEPOSIT AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY OR FUND. 
 THIS
SUBORDINATED NOTE WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM DENOMINATIONS OF $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF THIS SUBORDINATED NOTE IN A DENOMINATION OF LESS THAN $100,000 SHALL BE DEEMED TO
BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SUBORDINATED NOTE FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF PAYMENTS ON THIS SUBORDINATED NOTE, AND SUCH
PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS SUBORDINATED NOTE. 
 THIS SUBORDINATED NOTE MAY BE SOLD ONLY IN COMPLIANCE WITH
APPLICABLE FEDERAL AND STATE SECURITIES LAWS. THIS SUBORDINATED NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS OR ANY OTHER APPLICABLE
SECURITIES LAWS. NEITHER THIS SUBORDINATED NOTE NOR 

 
ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. 
 CERTAIN ERISA CONSIDERATIONS: 

THE HOLDER OF THIS SUBORDINATED NOTE, OR ANY INTEREST HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE
BENEFIT PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE “CODE”) (EACH, A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING “PLAN
ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THIS SUBORDINATED NOTE OR ANY INTEREST HEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER
APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SUBORDINATED NOTE, OR ANY INTEREST HEREIN, ARE NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE AND HOLDING. ANY PURCHASER OR HOLDER OF THIS
SUBORDINATED NOTE OR ANY INTEREST HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER: (I) IT IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER PLAN TO WHICH TITLE I OF ERISA OR SECTION 4975 OF THE CODE IS
APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER PLAN, OR ANY OTHER PERSON OR ENTITY USING THE “PLAN ASSETS” OF ANY SUCH PLAN OR OTHER PLAN TO FINANCE SUCH PURCHASE OR (II) SUCH
PURCHASE OR HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH FULL EXEMPTIVE RELIEF IS NOT AVAILABLE UNDER APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION. 

ANY FIDUCIARY OF ANY PLAN WHO IS CONSIDERING THE ACQUISITION OF THIS SUBORDINATED NOTE OR ANY INTEREST HEREIN SHOULD CONSULT WITH HIS OR HER LEGAL COUNSEL
PRIOR TO ACQUIRING THIS SUBORDINATED NOTE OR ANY INTEREST HEREIN. 

			
	No.: 2030-[●]	  	AI CUSIP No.: 72345E AB8
	Issue Date: September 18, 2020	  	QIB CUSIP No.: 72345E AA0

 PINNACLE BANKSHARES CORPORATION 

5.25% FIXED-TO-FLOATING RATE SUBORDINATED NOTE DUE 2030 

1. Subordinated Notes. This Subordinated Note is one of an issue of notes of Pinnacle Bankshares Corporation, a Virginia corporation
(the “Company”), designated as the “5.25% Fixed-to-Floating Rate Subordinated Notes due 2030” (the “Subordinated Notes”)
issued pursuant to that Subordinated Note Purchase Agreement, dated as of September 18, 2020, the date upon which this Subordinated Note was originally issued (the “Issue Date”), between the Company and the several purchasers
of the Subordinated Notes identified in the signature pages thereto (the “Purchase Agreement”). 
 2. Payment. The
Company, for value received, promises to pay to [●], or its registered assigns, the principal sum of [●] Dollars (U.S.) ($[●]), plus accrued but unpaid interest on September 30, 2030 (“Stated Maturity”) and to
pay interest thereon (i) from and including the Issue Date of the Subordinated Notes to but excluding September 30, 2025 or the earlier redemption date contemplated by Section 4 of this Subordinated Note (the
“Fixed Rate Period”), at the rate of 5.25% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months and payable quarterly
in arrears on March 30, June 30, September 30 and December 30 (each payment date, a “Fixed Rate Interest Payment Date”) of each year, beginning December 30, 2020, and (ii) from and including
September 30, 2025 to but excluding the Stated Maturity or the earlier redemption date contemplated by Section 4 of this Subordinated Note, at the rate per annum, reset quarterly, equal to the Floating Interest Rate
(as defined below) determined on the Floating Interest Determination Date (as defined below) of the applicable interest period plus 513 basis points, computed on the basis of a 360-day year and the actual
number of days elapsed and payable quarterly in arrears on March 30, June 30, September 30 and December 30 (each quarterly period, a “Floating Rate Period”) of each year (each payment date, a “Floating
Rate Interest Payment Date”). In the event that the Benchmark (as defined below) for such Floating Rate Period is less than zero, the Benchmark for such Floating Rate Period shall be deemed to be zero. Dollar amounts resulting from this
calculation shall be rounded to the nearest cent, with one-half cent being rounded up. The term “Floating Interest Determination Date” means the date upon which the Floating Interest Rate is
determined by the Calculation Agent (as defined below) pursuant to the Three-Month Term SOFR Conventions (as defined below). Any payment of principal of or interest on this Subordinated Note that would otherwise become due and payable on a day which
is not a Business Day (as defined below) shall become due and payable on the next succeeding Business Day, with the same force and effect as if made on the date for payment of such principal or interest, and no interest will accrue in respect of
such payment for the period after such day; provided, that in the event that any scheduled Floating Rate Interest Payment Date falls on a day that is not a Business Day and the next succeeding Business Day falls in the next succeeding calendar
month, such Floating Rate Interest Payment Date will be accelerated to the immediately preceding Business Day, and, in each such case, the amounts payable on such Business Day will include interest accrued to, but excluding, such Business Day. 

  
 1 

 (a) The Company shall take such actions as are necessary to ensure that from the
commencement of the Floating Rate Period for so long as any of the Subordinated Notes remain outstanding there will at all times be a Calculation Agent appointed to calculate Three-Month Term SOFR in respect of each Floating Rate Period. The
calculation of Three-Month Term SOFR for each applicable Floating Rate Period by the Calculation Agent will (in the absence of manifest error) be final and binding. The Calculation Agent’s determination of any interest rate and its calculation
of interest payments for any period will be maintained on file at the Calculation Agent’s principal offices, will be made available to any Noteholder (as defined below) upon request. The Calculation Agent may be removed by the Company at any
time. If the Calculation Agent is unable or unwilling to act as Calculation Agent or is removed by the Company, the Company will promptly appoint a replacement Calculation Agent. The Calculation Agent may not resign its duties without a successor
having been duly appointed; provided, that if a successor Calculation Agent has not been appointed by the Company and such successor accepted such position within thirty (30) days after the giving of notice of resignation by the Calculation
Agent, then the resigning Calculation Agent may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor Calculation Agent with respect to such series. For the avoidance of doubt, if at any time
there is no Calculation Agent appointed by the Company, then the Company shall be the Calculation Agent. 
 (b) An “Interest Payment
Date” is either a Fixed Rate Interest Payment Date or a Floating Rate Interest Payment Date, as applicable. 
 (c) The
“Floating Interest Rate” means: 
 (i) initially Three-Month Term SOFR (as defined below). 

(ii) Notwithstanding the foregoing clause (i) of this Section 2(c): 

(A) If the Calculation Agent determines prior to the relevant Floating Interest Determination Date that a Benchmark Transition Event and its
related Benchmark Replacement Date (each of such terms as defined below) have occurred with respect to Three-Month Term SOFR, then the Company shall promptly provide notice of such determination to the Noteholders and
Section 2(d) will thereafter apply to all determinations, calculations and quotations made or obtained for the purposes of calculating the Floating Interest Rate payable on the Subordinated Notes during a relevant Floating
Rate Period. 
 (B) However, if the Calculation Agent determines that a Benchmark Transition Event and its related Benchmark Replacement
Date have occurred with respect to Three-Month Term SOFR, but for any reason the Benchmark Replacement has not been determined as of the relevant Floating Interest Determination Date, the Floating Interest Rate for the applicable Floating Rate
Period will be equal to the Floating Interest Rate on the last Floating Interest Determination Date for the Subordinated Notes, as determined by the Calculation Agent. 

(d) Effect of Benchmark Transition Event. 

(i) If the Calculation Agent determines that a Benchmark Transition Event and its related Benchmark Replacement Date have occurred prior to
the Reference Time (as defined below) in respect of any determination of the Benchmark (as defined below) on any date, the 

  
 2 

 
Benchmark Replacement will replace the then-current Benchmark for all purposes relating to the Subordinated Notes during the relevant Floating Rate Period in respect of such determination on such
date and all determinations on all subsequent dates. 
 (ii) In connection with the implementation of a Benchmark Replacement, the
Calculation Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and such changes shall become effective without consent from the Noteholders or any other party. 

(iii) The Calculation Agent is expressly authorized to make certain determinations, decisions and elections under the Subordinated Notes,
including with respect to the use of Three-Month Term SOFR as the Benchmark under this Section 2(d). Any determination, decision or election that may be made by the Calculation Agent under the terms of the Subordinated
Notes, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date, and any decision to take or refrain from taking any
action or any selection: 
 (A) will be conclusive and binding absent manifest error; 

(B) if made by the Company as the Calculation Agent, will be made in the Company’s sole discretion; 

(C) if made by the Calculation Agent other than the Company, will be made after consultation with the Company, and the Calculation Agent will
not make any such determination, decision or election to which the Company reasonably objects; and 
 (D) notwithstanding anything to the
contrary in this Subordinated Note or the Purchase Agreement, shall become effective without consent from the relevant Noteholders or any other party. 

(iv) If the Calculation Agent fails to make any determination, decision or election that it is required to make under the terms of the
Subordinated Notes, then the Company will make such determination, decision or election on the same basis as described above. 
 (v) For the
avoidance of doubt, after a Benchmark Transition Event and its related Benchmark Replacement Date have occurred, interest payable on this Subordinated Note for the Floating Rate Period will be an annual rate equal to the sum of the applicable
Benchmark Replacement and the spread specified on the face hereof. 
 (vi) If the then-current Benchmark is Three-Month Term SOFR, the
Calculation Agent will have the right to establish the Three-Month Term SOFR Conventions, and if any of the foregoing provisions concerning the calculation of the interest rate and the payment of interest during the Floating Rate Period are
inconsistent with any of the Three-Month Term SOFR Conventions determined by the Calculation Agent, then the relevant Three-Month Term SOFR Conventions will apply. 

  
 3 

 (vii) As used in this Subordinated Note: 

(A) “Benchmark” means, initially, Three-Month Term SOFR; provided that if the Calculation Agent determines on or prior to
the Reference Time that a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to Three-Month Term SOFR or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement.
In the event that the Benchmark for a Floating Rate Period is less than zero, the Benchmark for such Floating Rate Period shall be deemed to be zero. 

(B) “Benchmark Replacement” means the Interpolated Benchmark with respect to the then-current Benchmark, plus the Benchmark
Replacement Adjustment for such Benchmark; provided that if (a) the Calculation Agent cannot determine the Interpolated Benchmark as of the Benchmark Replacement Date or (b) the then-current Benchmark is Three-Month Term SOFR and a
Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to Three-Month Term SOFR (in which event no Interpolated Benchmark with respect to Three-Month Term SOFR shall be determined), then “Benchmark
Replacement” means the first alternative set forth in the order below that can be determined by the Calculation Agent as of the Benchmark Replacement Date: 

(1) Compounded SOFR; 
 (2) the
sum of: (i) the alternate rate of interest that has been selected or recommended by the Relevant Governmental Body as the replacement for the then-current Benchmark for the applicable Corresponding Tenor and (ii) the Benchmark Replacement
Adjustment; 
 (3) the sum of: (i) the ISDA Fallback Rate and (ii) the Benchmark Replacement Adjustment; 

(4) the sum of: (i) the alternate rate of interest that has been selected by the Calculation Agent as the replacement for the
then-current Benchmark for the applicable Corresponding Tenor giving due consideration to any industry-accepted rate of interest as a replacement for the then-current Benchmark for U.S. dollar denominated floating rate notes at such time and
(ii) the Benchmark Replacement Adjustment. 
 If the Benchmark Replacement, as determined pursuant to clause (1), (2), (3) or (4) above would be
less than zero (0), the Benchmark Replacement will be deemed to be zero (0). 
 (C) “Benchmark Replacement Adjustment”
means the first alternative set forth in the order below that can be determined by the Calculation Agent as of the Benchmark Replacement Date: 

(1) the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or
zero) that has been selected or recommended by the Relevant Governmental Body for the applicable Unadjusted Benchmark Replacement; 
 (2)
if the applicable Unadjusted Benchmark Replacement is equivalent to the ISDA Fallback Rate, then the ISDA Fallback Adjustment; 

  
 4 

 (3) the spread adjustment (which may be a positive or negative value or zero) that has been
selected by the Calculation Agent giving due consideration to any industry-accepted spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of the then-current Benchmark with the applicable Unadjusted
Benchmark Replacement for U.S. dollar denominated floating rate notes at such time. 
 (D) “Benchmark Replacement Conforming
Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Floating Rate Period,” timing and frequency of determining rates with respect
to each Floating Rate Period and making payments of interest, rounding of amounts or tenors, and other administrative matters) that the Calculation Agent decides may be appropriate to reflect the adoption of such Benchmark Replacement in a manner
substantially consistent with market practice (or, if the Calculation Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Calculation Agent determines that no market practice for use of the
Benchmark Replacement exists, in such other manner as the Calculation Agent determines is reasonably necessary). 
 (E) “Benchmark
Replacement Date” means the earliest to occur of the following events with respect to the then-current Benchmark: 
 (1) in the
case of clause (1) of the definition of “Benchmark Transition Event,” the relevant Reference Time in respect of any determination; or 

(2) in the case of clause (2) or clause (3) of the definition of “Benchmark Transition Event,” the later of
(i) the date of the public statement or publication of information referenced therein and (ii) the date on which the administrator of the Benchmark permanently or indefinitely ceases to provide the Benchmark; or 

(3) in the case of clause (4) of the definition of “Benchmark Transition Event,” the date of the public statement or
publication of information referenced therein. 
 For the avoidance of doubt, for purposes of the definitions of Benchmark Replacement Date
and Benchmark Transition Event, references to the Benchmark also include any reference rate underlying the Benchmark (for example, if the Benchmark becomes Compounded SOFR, references to the Benchmark would include SOFR). 

For the avoidance of doubt, if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the
Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination. 

(F) “Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the
then-current Benchmark: 
 (1) if the Benchmark is Three-Month Term SOFR, (i) the Relevant Governmental Body has not selected or
recommended a forward-looking term rate for a tenor of three months based on SOFR, (ii) the development of a forward-looking term rate for a tenor of three months based on SOFR that has been recommended or selected by the Relevant Governmental
Body is not complete or (iii) the Company determines that the use of a forward-looking rate for a tenor of three months based on SOFR is not administratively feasible; 

  
 5 

 (2) a public statement or publication of information by or on behalf of the administrator
of the Benchmark announcing that such administrator has ceased or will cease to provide the Benchmark, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue
to provide the Benchmark; 
 (3) a public statement or publication of information by the regulatory supervisor for the administrator of the
Benchmark, the central bank for the currency of the Benchmark, an insolvency official with jurisdiction over the administrator for the Benchmark, a resolution authority with jurisdiction over the administrator for the Benchmark or a court or an
entity with similar insolvency or resolution authority over the administrator for the Benchmark, which states that the administrator of the Benchmark has ceased or will cease to provide the Benchmark permanently or indefinitely, provided that, at
the time of such statement or publication, there is no successor administrator that will continue to provide the Benchmark; or 
 (4) a
public statement or publication of information by the regulatory supervisor for the administrator of the Benchmark announcing that the Benchmark is no longer representative. 

(G) “Business Day” means any day that is not a Saturday or Sunday and that is not a day on which banks in the Commonwealth
of Virginia are generally authorized or required by law or executive order to be closed. 
 (H) “Calculation Agent” means
the agent (which may be the Company or an Affiliate of the Company) as may be appointed by the Company to act as Calculation Agent for the Subordinated Notes prior to the commencement of, or during, the Floating Rate Period to act in accordance with
Section 2. 
 (I) “Compounded SOFR” means the compounded average of SOFRs for the applicable
Corresponding Tenor, with the rate, or methodology for this rate, and conventions for this rate being established by the Calculation Agent in accordance with: 

(1) the rate, or methodology for this rate and conventions for this rate selected or recommended by the Relevant Governmental Body for
determining compounded SOFR; provided that: 
 (2) if, and to the extent that, the Calculation Agent determines that Compounded SOFR cannot
be determined in accordance with clause (1) above, then the rate, or methodology for this rate, and conventions for this rate that have been selected by the Calculation Agent giving due consideration to any industry-accepted market
practice for U.S. dollar denominated floating rate notes at such time. 
 For the avoidance of doubt, the calculation of Compounded SOFR will exclude the
Benchmark Replacement Adjustment and the spread specified on the face hereof. 

  
 6 

 (J) “Corresponding Tenor” with respect to a Benchmark Replacement means a
tenor (including overnight) having approximately the same length (disregarding Business Day adjustment) as the applicable tenor for the then-current Benchmark. 

(K) “FRBNY” means the Federal Reserve Bank of New York. 

(L) “FRBNY’s Website” means the website of the FRBNY at http://www.newyorkfed.org, or any successor source. 

(M) “Interpolated Benchmark” with respect to the Benchmark means the rate determined for the Corresponding Tenor by
interpolating on a linear basis between: (1) the Benchmark for the longest period (for which the Benchmark is available) that is shorter than the Corresponding Tenor and (2) the Benchmark for the shortest period (for which the Benchmark is
available) that is longer than the Corresponding Tenor. 
 (N) “ISDA” means the International Swaps and Derivatives
Association, Inc. or any successor thereto. 
 (O) “ISDA Definitions” means the 2006 ISDA Definitions published by the
ISDA or any successor thereto, as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time. 

(P) “ISDA Fallback Adjustment” means the spread adjustment (which may be a positive or negative value or zero) that would
apply for derivatives transactions referencing the ISDA Definitions to be determined upon the occurrence of an index cessation event with respect to the Benchmark for the applicable tenor. 

(Q) “ISDA Fallback Rate” means the rate that would apply for derivatives transactions referencing the ISDA Definitions to be
effective upon the occurrence of an index cessation date with respect to the Benchmark for the applicable tenor excluding the applicable ISDA Fallback Adjustment. 

(R) “Reference Time” with respect to any determination of the Benchmark means (a) if the Benchmark is Three-Month Term
SOFR, the time determined by the Calculation Agent after giving effect to the Three-Month Term SOFR Conventions, and (b) if the Benchmark is not Three-Month Term SOFR, the time determined by the Calculation Agent after giving effect to the
Benchmark Replacement Conforming Changes. 
 (S) “Relevant Governmental Body” means the Board of Governors of the Federal
Reserve System (the “Federal Reserve”) and/or the FRBNY, or a committee officially endorsed or convened by the Federal Reserve and/or the FRBNY or any successor thereto. 

(T) “SOFR” means the daily Secured Overnight Financing Rate provided by the FRBNY, as the administrator of the benchmark,
(or a successor administrator) on the FRBNY’s Website (or such successor’s website). 

  
 7 

 (U) “Term SOFR” means the forward-looking term rate for the applicable
Corresponding Tenor based on SOFR that has been selected or recommended by the Relevant Governmental Body. 
 (V) “Term SOFR
Administrator” means any entity designated by the Relevant Governmental Body as the administrator of Term SOFR (or successor administrator). 

(W) “Three-Month Term SOFR” means the rate for Term SOFR for a tenor of three months that is published by the Term SOFR
Administrator at the Reference Time for any Floating Rate Period, as determined by the Calculation Agent after giving effect to the Three-Month Term SOFR Conventions. All percentages used in or resulting from any calculation of Three-Month Term SOFR
shall be rounded, if necessary, to the nearest one-hundred-thousandth of a percentage point, with 0.000005% rounded up to 0.00001%. 

(X) “Three-Month Term SOFR Conventions” means any determination, decision or election with respect to any technical,
administrative or operational matter (including with respect to the manner and timing of the publication of Three-Month Term SOFR, or changes to the definition of “Floating Rate Period,” timing and frequency of determining Three-Month Term
SOFR with respect to each Floating Rate Period and making payments of interest, rounding of amounts or tenors, and other administrative matters) that the Calculation Agent decides may be appropriate to reflect the use of Three-Month Term SOFR as the
Benchmark in a manner substantially consistent with market practice (or, if the Calculation Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Calculation Agent determines that no market
practice for the use of Three-Month Term SOFR exists, in such other manner as the Calculation Agent determines is reasonably necessary). 

(Y) “Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding the Benchmark Replacement Adjustment. 

3. Subordination. 
 (a)
The indebtedness of the Company evidenced by this Subordinated Note, including the principal and interest on this Subordinated Note, shall be subordinate and junior in right of payment to the prior payment in full of all existing claims of creditors
of the Company whether now outstanding or subsequently created, assumed, guaranteed or incurred (collectively, “Senior Indebtedness”), which shall consist of principal of (and premium, if any) and interest, if any, on: (i) all
indebtedness and obligations of, or guaranteed or assumed by, the Company for money borrowed, whether or not evidenced by bonds, debentures, securities, notes or other similar instruments, and including, but not limited to, all obligations to the
Company’s general creditors and secured creditors; (ii) any deferred obligations of the Company for the payment of the purchase price of property or assets acquired other than in the ordinary course of business; (iii) all obligations,
contingent or otherwise, of the Company in respect of any letters of credit, bankers’ acceptances, security purchase facilities and similar direct credit substitutes; (iv) any capital lease obligations of the Company; (v) all
obligations of the Company in respect of interest rate swap, cap or other agreements, interest rate future or option contracts, currency swap agreements, currency future or option contracts, commodity contracts and other similar arrangements or
derivative products; (vi) any obligation of the Company to its general creditors, as defined for 

  
 8 

 
purposes of the capital adequacy regulations of the Federal Reserve applicable to the Company, as the same may be amended or modified from time to time; (vii) all obligations that are
similar to those in clauses (i) through (vi) of other Persons (as such term is defined in the Purchase Agreement) for the payment of which the Company is responsible or liable as obligor, guarantor or otherwise arising from an off-balance sheet guarantee; (viii) all obligations of the types referred to in clauses (i) through (vi) of other Persons secured by a lien on any property or asset of the Company; and (ix) in the
case of clauses (i) through (viii) above, all amendments, renewals, extensions, modifications and refundings of such indebtedness and obligations; except “Senior Indebtedness” does not include (A) the Subordinated Notes,
(B) any obligation that by its terms expressly is junior to, or ranks equally in right of payment with, the Subordinated Notes, or (C) any indebtedness between the Company and any of its subsidiaries or Affiliates. This Subordinated Note
is not secured by any assets of the Company or any subsidiary or Affiliate of the Company. The term “Affiliate(s)” means, with respect to any Person, such Person’s immediate family members, partners, members or parent and
subsidiary corporations, and any other Person directly or indirectly controlling, controlled by, or under common control with said Person and their respective Affiliates. The term “control” (including the terms
“controlling,” “controlled by,” and “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. 
 (b) In the event of any liquidation of the Company, holders of Senior
Indebtedness of the Company shall be entitled to be paid in full with such interest as may be provided by law before any payment shall be made on account of principal of or interest on this Subordinated Note. Additionally, in the event of any
insolvency, dissolution, assignment for the benefit of creditors or any liquidation or winding up of or relating to the Company, whether voluntary or involuntary, holders of Senior Indebtedness shall be entitled to be paid in full before any payment
shall be made on account of the principal of or interest on the Subordinated Notes, including this Subordinated Note. In the event of any such proceeding, after payment in full of all sums owing with respect to the Senior Indebtedness, the
registered holders of the Subordinated Notes from time to time (each, a “Noteholder” and, collectively, the “Noteholders”), together with the holders of any obligations of the Company ranking on parity with the
Subordinated Notes, shall be entitled to be paid from the remaining assets of the Company the unpaid principal thereof, and the unpaid interest thereon before any payment or other distribution, whether in cash, property or otherwise, shall be made
(i) with respect to any obligation that by its terms expressly is junior to in the right of payment to the Subordinated Notes, (ii) with respect to any indebtedness between the Company and any of its subsidiaries or Affiliates or
(iii) on account of any capital stock. 
 (c) If there shall have occurred and be continuing (i) a default in any payment with
respect to any Senior Indebtedness or (ii) an event of default with respect to any Senior Indebtedness as a result of which the maturity thereof is accelerated, unless and until such payment default or event of default shall have been cured or
waived or shall have ceased to exist, no payments shall be made by the Company with respect to the Subordinated Notes, notwithstanding the provisions of Section 17 hereof. The provisions of this subsection shall not apply
to any payment with respect to which Section 3(b) above would be applicable. 
 (d) Nothing herein shall act to
prohibit, limit or impede the Company from issuing additional debt of the Company having the same rank as the Subordinated Notes or which may be 

  
 9 

 
junior or senior in rank to the Subordinated Notes. Each Noteholder, by its acceptance hereof, agrees to and shall be bound by the provisions of this Section 3. Each
Noteholder, by its acceptance hereof, further acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement and a consideration for each holder of any Senior Indebtedness, whether such Senior
Indebtedness was created or acquired before or after the issuance of the Subordinated Notes, to acquire and continue to hold, or to continue to hold, such Senior Indebtedness, and such holder of Senior Indebtedness shall be deemed conclusively to
have relied on such subordination provisions in acquiring and continuing to hold or in continuing to hold such Senior Indebtedness. 
 4.
Redemption. 
 (a) Redemption Prior to Fifth Anniversary. This Subordinated Note shall not be redeemable by the Company in
whole or in part prior to the fifth (5th) anniversary of the Issue Date, except in the event of: (i) a Tier 2 Capital Event (as defined below), (ii) a Tax Event (as defined below) or (iii) an Investment Company Event (as defined below).
Upon the occurrence of a Tier 2 Capital Event, a Tax Event or an Investment Company Event, subject to Section 4(f) below, the Company may redeem this Subordinated Note in whole or in part, at any time, upon giving not less
than ten (10) calendar days’ notice to the Noteholder of this Subordinated Note at an amount equal to one hundred percent (100%) of the outstanding principal amount being redeemed plus accrued but unpaid interest, to but excluding the
redemption date. “Tier 2 Capital Event” means the Company’s good faith determination that, as a result of (1) any amendment to, or change in, the laws, rules or regulations of the United States (including, for the
avoidance of doubt, any agency or instrumentality of the United States, including the Federal Reserve and other federal bank regulatory agencies) or any political subdivision of or in the United States that is enacted or becomes effective after the
issue date of this Subordinated Note, (2) any proposed change in those laws, rules or regulations that is announced or becomes effective after the Issue Date, or (3) any official administrative decision or judicial decision or
administrative action or other official pronouncement interpreting or applying those laws, rules, regulations, policies or guidelines with respect thereto that is announced after the issue date of this Subordinated Note, there is more than an
insubstantial risk that the Company will not be entitled to treat the Subordinated Notes then outstanding as Tier 2 capital (or its equivalent) for purposes of capital adequacy guidelines of the Federal Reserve Board, as then in effect and
applicable to the Company (“Tier 2 Capital”), for so long as any Subordinated Notes are outstanding. “Tax Event” means the receipt by the Company of an opinion of independent tax counsel experienced in such matters
to the effect that as a result of (1) an amendment to or change (including any announced prospective amendment or change) in any law or treaty, or any regulation thereunder, of the United States or any of its political subdivisions or taxing
authorities; (2) a judicial decision, administrative action, official administrative pronouncement, ruling, regulatory procedure, regulation, notice or announcement, including any notice or announcement of intent to adopt or promulgate any
ruling, regulatory procedure or regulation (any of the foregoing, an “Administrative or Judicial Action”); or (3) an amendment to or change in any official position with respect to, or any interpretation of, an Administrative
or Judicial Action or a law or regulation of the United States that differs from the previously generally accepted position or interpretation, in each case, which change or amendment or challenge becomes effective or which pronouncement, decision or
challenge is announced on or after the issue date of this Subordinated Note, there is more than an insubstantial risk that interest payable by the Company on the Subordinated Notes is not, or within 90 days of

  
 10 

 
such opinion, will not be, deductible by the Company, in whole or in part, for United States federal income tax purposes. “Investment Company Event” means receipt by the Company
of an opinion of independent counsel experienced in such matters to the effect that there is more than an insubstantial risk that the Company is or, within 90 days of the date of such legal opinion will be, considered an “investment
company” that is required to be registered under the Investment Company Act of 1940, as amended. 
 (b) Redemption on or after Fifth
Anniversary. On or after the fifth (5th) anniversary of the Issue Date, subject to Section 4(f) below, this Subordinated Note shall be redeemable at the option of and by the Company, in whole or in part from time to
time upon any Interest Payment Date, at an amount equal to one hundred percent (100%) of the outstanding principal amount being redeemed plus accrued but unpaid interest, to but excluding the redemption date. In addition, the Company may redeem all
or a portion of the Subordinated Notes, at any time upon the occurrence of a Tier 2 Capital Event, Tax Event or an Investment Company Event. In the case of any redemption of this Subordinated Note pursuant to this
Section 4(b), the Company will give the Noteholder notice of redemption, which notice shall indicate the aggregate principal amount of Subordinated Notes to be redeemed, not less than thirty (30) nor more than
forty-five (45) calendar days prior to the proposed redemption date. 
 (c) Partial Redemption. If less than the then
outstanding principal amount of this Subordinated Note is redeemed, (i) a new Subordinated Note shall be issued representing the unredeemed portion without charge to the holder thereof and (ii) such redemption shall be effected on a pro
rata basis as to the Noteholders. For purposes of clarity, upon a partial redemption, a like percentage of the principal amount of every Subordinated Note held by every Noteholder shall be redeemed. Such redemptions shall be made on a pro rata
pass-through distribution of principal among all of the Subordinated Notes outstanding at the time thereof. 
 (d) No Redemption at
Option of Noteholder. This Subordinated Note is not subject to redemption at the option of the Noteholder. 
 (e) Effectiveness of
Redemption. If notice of redemption has been duly given and notwithstanding that this Subordinated Note has been called for redemption but has not yet been surrendered for cancellation, on and after the date fixed for redemption interest shall
cease to accrue on the portion of this Subordinated Note called for redemption, this Subordinated Note shall no longer be deemed outstanding with respect to the portion called for redemption and all rights with respect to the portion of this
Subordinated Note called for redemption shall forthwith on such date fixed for redemption cease and terminate unless the Company shall default in the payment of the redemption price, except only the right of the Noteholder to receive the amount
payable on such redemption, without interest. 
 (f) Regulatory Approvals. Any such redemption pursuant to this
Section 4 shall be subject to receipt of any and all required federal and state regulatory approvals or non-objections, including, but not limited to, the consent of the Federal
Reserve. 
 (g) Purchase and Resale of the Subordinated Notes. Subject to any required federal and state regulatory approvals and the
provisions of this Subordinated Note, the Company shall have the right to purchase any of the Subordinated Notes at any time in the open market, private transactions or otherwise. If the Company purchases any Subordinated Notes, it may, in its
discretion, hold, resell or cancel any of the purchased Subordinated Notes. 

  
 11 

 5. Events of Default; Acceleration. Each of the following events shall constitute an
“Event of Default”: 
 (a) the entry of a decree or order for relief in respect of the Company by a court having
jurisdiction in the premises in an involuntary case or proceeding under any applicable bankruptcy, insolvency, or reorganization law, now or hereafter in effect of the United States or any political subdivision thereof, and such decree or order will
have continued unstayed and in effect for a period of sixty (60) consecutive calendar days; 
 (b) the commencement by the Company of a
voluntary case under any applicable bankruptcy, insolvency or reorganization law, now or hereafter in effect of the United States or any political subdivision thereof, or the consent by the Company to the entry of a decree or order for relief in an
involuntary case or proceeding under any such law; 
 (c) the Company (i) becomes insolvent or is unable to pay its debts as they
mature, (ii) makes an assignment for the benefit of creditors, (iii) admits in writing its inability to pay its debts as they mature, or (iv) ceases to be a bank holding company or financial holding company under the Bank Holding
Company Act of 1956, as amended; 
 (d) the failure of the Company to pay any installment of interest on any of the Subordinated Notes as
and when the same will become due and payable, and the continuation of such failure for a period of fifteen (15) consecutive calendar days; 

(e) the failure of the Company to pay all or any part of the principal of any of the Subordinated Notes as and when the same will become due
and payable; 
 (f) the liquidation of the Company (for the avoidance of doubt, “liquidation” does not include any merger,
consolidation, sale of equity or assets or reorganization (exclusive of a reorganization in bankruptcy) of the Company or any of its subsidiaries); 

(g) the failure of the Company to perform any other covenant or agreement on the part of the Company contained in the Subordinated Notes, and
the continuation of such failure for a period of thirty (30) consecutive calendar days after the date on which notice specifying such failure, stating that such notice is a “Notice of Default” hereunder and demanding that the Company
remedy the same, will have been given, in the manner set forth in Section 21, to the Company by a Noteholder; or 

(h) the default by the Company under any bond, debenture, note or other evidence of indebtedness for money borrowed by the Company having an
aggregate principal amount outstanding of at least $10,000,000 whether such indebtedness now exists or is created or incurred in the future, which default (i) constitutes a failure to pay any portion of the principal of such indebtedness when
due and payable after the expiration of any applicable grace period or (ii) results in such indebtedness becoming due or being declared due and payable prior to the date on which it otherwise would have become due and payable without, in the
case of clause (i), such indebtedness having been discharged or, in the case of clause (ii), without such indebtedness having been discharged or such acceleration having been rescinded or annulled. 

  
 12 

 Unless the principal amount of this Subordinated Note already shall have become due and payable, if an Event
of Default described in Section 5(a) or Section 5(b) shall have occurred and be continuing, the Noteholder, by notice in writing to the Company, may declare the principal amount of this
Subordinated Note to be due and payable immediately and, upon any such declaration, the same shall become and shall be immediately due and payable. The Company waives demand, presentment for payment, notice of nonpayment, notice of protest and all
other notices. Notwithstanding the foregoing, because the Company will treat the Subordinated Notes as Tier 2 Capital, upon the occurrence of an Event of Default other than an Event of Default described in Section 5(a) or
Section 5(b), the Noteholders may not accelerate the Stated Maturity of the Subordinated Notes and make the principal of, and any accrued and unpaid interest on, the Subordinated Notes, immediately due and payable. The
Company, within forty-five (45) calendar days after the receipt of written notice from any Noteholder of the occurrence of an Event of Default with respect to this Subordinated Note, shall mail to all Noteholders, at their addresses shown on
the Security Register (as defined in Section 13 below), such written notice of Event of Default, unless such Event of Default shall have been cured or waived before the giving of such notice as certified by the Company in
writing. 
 6. Failure to Make Payments. In the event of an Event of Default under Section 5(c),
Section 5(d) or Section 5(e) the Company will, upon demand of the Noteholder of this Subordinated Note, pay to the Noteholder of this Subordinated Note the amount then due and payable on this
Subordinated Note for principal and interest (without acceleration of this Subordinated Note in any manner), with interest on the overdue principal and interest at the per annum rate borne by this Subordinated Note, to the extent permitted by
applicable law. If the Company fails to pay such amount upon such demand, the Noteholder of this Subordinated Note may, among other things, institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such
proceeding to judgment or final decree and may enforce the same against the Company and collect the amounts adjudged or decreed to be payable in the manner provided by law out of the property of the Company. 

Upon the occurrence of a failure by the Company to make any required payment of principal or interest on this Subordinated Note, or an Event
of Default until such Event of Default is cured by the Company or waived by the Noteholders in accordance with Section 16, the Company shall not, except as required by any federal or state governmental agency:
(a) declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of the Company’s capital stock; (b) make any payment of principal or interest or premium, if any,
on or repay, repurchase or redeem any indebtedness of the Company that ranks equal with or junior to the Subordinated Notes; or (c) make any payments under any guarantee that ranks equal with or junior to the Subordinated Notes, other than
(i) any dividends or distributions in shares of, or options, warrants or rights to subscribe for or purchase shares of, any class of the Company’s common stock; (ii) any declaration of a
non-cash dividend in connection with the implementation of a shareholders’ rights plan, or the issuance of stock under any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto; (iii) as a result of a reclassification of the Company’s capital stock or the exchange or conversion of one class or series of the Company’s capital stock for another class or series of the Company’s capital
stock; (iv) the 

  
 13 

 
purchase of fractional interests in shares of the Company’s capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or
exchanged; or (v) purchases of any class of the Company’s common stock related to the issuance of common stock or rights under any benefit plans for the Company’s directors, officers or employees or any of the Company’s dividend
reinvestment plans (the foregoing clauses (i) through (v) are collectively referred to as the “Permitted Dividends”). 

7. Affirmative Covenants of the Company. 

(a) Notice of Certain Events. To the extent permitted by applicable statute, rule or regulation, the Company shall provide written
notice to the Noteholder of the occurrence of any of the following events as soon as practicable, but in no event later than fifteen (15) Business Days following the Company becoming aware of the occurrence of such event: 

(i) the Company or the Bank (as defined below) becomes less than “well-capitalized” as defined in the then-applicable regulatory
capital standards; 
 (ii) the Company, or any of the Company’s subsidiaries, or any officer of the Company or any of its subsidiaries,
becomes subject to any formal, written regulatory enforcement action (as defined by the applicable regulatory agency); 
 (iii) the dollar
amount of any nonperforming assets of the Company on a consolidated basis as of the end of a given fiscal quarter as a percentage of the Company’s total loan portfolio increases by five percent (5.0%) or more from the end of the preceding
fiscal quarter; 
 (iv) the appointment, resignation, removal or termination of the chief executive officer, president, chief operating
officer, chief financial officer, chief credit officer, chief lending officer or any director of the Company; or 
 (v) there is a change in
ownership of twenty-five percent (25%) or more of the outstanding securities of the Company entitled to vote for the election of directors. 

(b) Payment of Principal and Interest. The Company covenants and agrees for the benefit of the Noteholder of this Subordinated Note
that it will duly and punctually pay the principal of, and interest on, this Subordinated Note, in accordance with the terms hereof. 
 (c)
Maintenance of Office. The Company will maintain an office or agency in the Commonwealth of Virginia where Subordinated Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company
in respect of the Subordinated Notes may be served. The Company may also from time to time designate one or more other offices or agencies where the Subordinated Notes may be presented or surrendered for any or all such purposes and may from time to
time rescind such designations; provided that no such designation or rescission will in any manner relieve the Company of its obligation to maintain an office or agency in the Commonwealth of Virginia. The Company will give prompt written
notice to the Noteholders of any such designation or rescission and of any change in the location of any such other office or agency. 

  
 14 

 (d) Corporate Existence. The Company will do or cause to be done all things necessary
to preserve and keep in full force and effect: (i) the corporate existence of the Company; (ii) the existence (corporate or other) of each subsidiary; and (iii) the rights (charter and statutory), licenses and franchises of the
Company and each of its subsidiaries; provided, however, that the Company will not be required to preserve the existence (corporate or other) of any of its subsidiaries or any such right, license or franchise of the Company or any of its
subsidiaries if the Board of Directors of the Company determines that the preservation thereof is no longer desirable in the conduct of the business of the Company and its subsidiaries taken as a whole and that the loss thereof will not be
disadvantageous in any material respect to the Noteholders. 
 (e) Maintenance of Properties. The Company will, and will cause each
of its subsidiaries to, cause all its properties used or useful in the conduct of its business to be maintained and kept in good condition, repair and working order and supplied with all necessary equipment and will cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment of the Company may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section 7 will prevent the Company or any subsidiary from discontinuing the operation and maintenance of any of their respective properties if such discontinuance is, in the
judgment of the Board of Directors of the Company or of any subsidiary, as the case may be, desirable in the conduct of its business. 
 (f)
Compliance Certificate. The Company will deliver to the Noteholders, within one hundred and twenty (120) calendar days after the end of each fiscal year, an Officer’s Certificate covering the preceding calendar year, stating whether
or not, to the best of his or her knowledge, the Company is in default in the performance and observance of any of the terms, provisions and conditions of this Subordinated Note (without regard to notice requirements or periods of grace) and if the
Company will be in default, specifying all such defaults and the nature and status thereof of which he or she may have knowledge. 
 (g)
Tier 2 Capital. Whether or not the Company is subject to consolidated capital requirements under applicable regulations of the Federal Reserve, if all or any portion of the Subordinated Notes ceases to qualify as Tier 2 Capital, other than
due to the limitation imposed on the capital treatment of subordinated debt during the five (5) years immediately preceding the Stated Maturity of the Subordinated Notes, the Company will promptly notify the Noteholder of this Subordinated Note
and thereafter, subject to the Company’s right to redeem the Subordinated Notes under such circumstances pursuant to the terms of the Subordinated Notes, if requested by the Company, the Company and the Noteholder of this Subordinated Note will
work together in good faith to execute and deliver all agreements as reasonably necessary in order to restructure the applicable portions of the obligations evidenced by the Subordinated Notes to qualify as Tier 2 Capital; provided, however,
that nothing contained in this Section 7(g) shall limit the Company’s right to redeem the Subordinated Notes upon the occurrence of a Tier 2 Capital Event pursuant to Section 4(a) or
Section 4(b). 
 (h) Compliance with Laws. The Company shall comply with the requirements of all laws,
regulations, orders and decrees applicable to it or its properties, except for such noncompliance that would not reasonably be expected to have a Material Adverse Effect (as such term is defined in the Purchase Agreement) on the Company and its
subsidiaries taken as a whole. 

  
 15 

 (i) Taxes and Assessments. The Company shall punctually pay and discharge all
material taxes, assessments, and other governmental charges or levies imposed upon it or upon its income or upon any of its properties; provided that no such taxes, assessments or other governmental charges need be paid if they are being
contested in good faith by the Company. 
 (j) Financial Statements; Access to Records. 

(i) Not later than forty-five (45) calendar days following the end of each fiscal quarter for which the Company has not submitted a
Consolidated Financial Statements for Holding Companies Reporting Form FR Y-9C to the Federal Reserve, upon request, the Company shall provide the Noteholder with a copy of the Company’s unaudited parent
company only balance sheet and statement of income (loss) for and as of the end of such immediately preceding fiscal quarter, prepared in accordance with past practice. Quarterly financial statements, if required herein, shall be unaudited and need
not comply with generally accepted accounting principles in effect from time to time in the United States of America (“GAAP”). 

(ii) Not later than one hundred twenty (120) days from the end of each fiscal year for which the Company has not filed its Form 10-K with the U.S. Securities and Exchange Commission, upon request, the Company shall provide the Noteholder with copies of the Company’s audited financial statements consisting of the consolidated balance
sheet of the Company as of the fiscal year end and the related statements of income (loss) and retained earnings, stockholders’ equity and cash flows for the fiscal year then ended. Such financial statements shall be prepared in accordance with
GAAP applied on a consistent basis throughout the period involved. 
 8. Negative Covenants of the Company. 

(a) Limitation on Dividends. The Company shall not declare or pay any dividend or make any distribution on capital stock or other
equity securities of any kind of the Company if the Bank is not “well capitalized” for regulatory capital purposes immediately prior to the declaration of such dividend or distribution, except for Permitted Dividends. 

(b) Merger or Sale of Assets. The Company shall not merge into another entity, effect a Change in Bank Control (as defined below), or
convey, transfer or lease substantially all of its properties and assets to any person, unless: 
 (i) the continuing entity into which the
Company is merged or the person which acquires by conveyance or transfer or which leases substantially all of the properties and assets of the Company shall be a corporation, association or other legal entity organized and existing under the laws of
the United States of America, any State thereof or the District of Columbia and expressly assumes the due and punctual payment of the principal of and any premium and interest on the Subordinated Notes according to their terms, and the due and
punctual performance of all covenants and conditions hereof on the part of the Company to be performed or observed; and 
 (ii) immediately
after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing. 

  
 16 

 “Change in Bank Control” means the sale, transfer, lease or conveyance by the Company, or
an issuance of stock by the Company’s wholly-owned subsidiary, First National Bank, a national banking association organized under the laws of the United States (the “Bank”), in either case resulting in ownership by the Company
of less than fifty percent (50%) of the Bank. 
 9. Denominations. The Subordinated Notes are issuable only in registered form
without interest coupons in minimum denominations of $100,000 and integral multiples of $1,000 in excess thereof. 
 10. Charges and
Transfer Taxes. No service charge will be made for any registration of transfer or exchange of this Subordinated Note, or any redemption or repayment of this Subordinated Note, or any conversion or exchange of this Subordinated Note for other
types of securities or property, but the Company may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges that may be imposed in connection with the transfer or exchange of this Subordinated Note from the
Noteholder requesting such transfer or exchange. 
 11. Payment Procedures. Payment of the principal and interest payable on the
Stated Maturity will be made by check, by wire transfer or by Automated Clearing House (ACH) transfer in immediately available funds to a bank account in the United States designated by the Noteholder of this Subordinated Note if such Noteholder
shall have previously provided wire instructions to the Company, upon presentation and surrender of this Subordinated Note at the Payment Office (as defined herein) or at such other place or places as the Company shall designate by notice to the
Noteholders as the Payment Office, provided that this Subordinated Note is presented to the Company in time for the Company to make such payments in such funds in accordance with its normal procedures. Payments of interest (other than
interest payable on the Stated Maturity) shall be made by wire transfer in immediately available funds or check mailed to the registered Noteholder of this Subordinated Note, as such Person’s address appears on the Security Register. Interest
payable on any Interest Payment Date shall be payable to the Noteholder in whose name this Subordinated Note is registered at the close of business on the fifteenth (15th) calendar day prior to the applicable Interest Payment Date, without regard to
whether such date is a Business Day, except that interest not paid on the Interest Payment Date, if any, will be paid to the Noteholder in whose name this Subordinated Note is registered at the close of business on a special record date fixed by the
Company (a “Special Record Date”), notice of which shall be given to the Noteholder of this Subordinated Note not less than ten (10) calendar days prior to such Special Record Date. To the extent permitted by applicable law,
interest shall accrue, at the rate at which interest accrues on the principal of this Subordinated Note, on any amount of principal or interest on this Subordinated Note not paid when due. All payments on this Subordinated Note shall be applied
first against interest due hereunder; and then against principal due hereunder. The Noteholder of this Subordinated Note acknowledges and agrees that the payment of all or any portion of the outstanding principal amount of this Subordinated Note and
all interest hereon shall be pari passu in right of payment and in all other respects to the other Subordinated Notes. In the event that the Noteholder of this Subordinated Note receives payments in excess of its pro rata share of the
Company’s payments to the Noteholders of all of the Subordinated Notes, then the Noteholder of this Subordinated Note shall hold in trust all such excess payments for the benefit of the Noteholders of the other Subordinated Notes and shall pay
such amounts held in trust to such other Noteholders upon demand by such Noteholders. 

  
 17 

 12. Form of Payment. Payments of principal of and interest on this Subordinated Note
shall be made in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts. 

13. Registration of Transfer, Security Register. Except as otherwise provided herein, this Subordinated Note is transferable in whole
or in part, and may be exchanged for a like aggregate principal amount of Subordinated Notes of other authorized denominations, by the Noteholder of this Subordinated Note in person, or by its attorney duly authorized in writing, at the Payment
Office. The Company shall maintain a register providing for the registration of the Subordinated Notes and any exchange or transfer thereof (the “Security Register”). Upon surrender or presentation of this Subordinated Note for
exchange or registration of transfer, the Company shall execute and deliver in exchange therefor a Subordinated Note or Subordinated Notes of like aggregate principal amount, each in a minimum denomination of $100,000 or any amount in excess thereof
which is an integral multiple of $1,000 (and, in the absence of an opinion of counsel satisfactory to the Company to the contrary, bearing the restrictive legend(s) set forth hereinabove) and that is or are registered in such name or names requested
by the Noteholder. Any Subordinated Note presented or surrendered for registration of transfer or for exchange shall be duly endorsed and accompanied by a written instrument of transfer in such form as is attached hereto and incorporated herein,
duly executed by the Noteholder of this Subordinated Note or its attorney duly authorized in writing, with such tax identification number or other information for each Person in whose name a Subordinated Note is to be issued, and accompanied by
evidence of compliance with any restrictive legend(s) appearing on such Subordinated Note or Subordinated Notes as the Company may reasonably request to comply with applicable law. No exchange or registration of transfer of this Subordinated Note
shall be made on or after (i) the fifteenth (15th) day immediately preceding the Stated Maturity or (ii) the due delivery of notice of redemption. 

14. Priority. The Subordinated Notes rank pari passu among themselves and pari passu, in the event of any insolvency
proceeding, dissolution, assignment for the benefit of creditors, reorganization, restructuring of debt, marshaling of assets and liabilities or similar proceeding or any liquidation or winding up of the Company, with all other present or future
unsecured subordinated debt obligations of the Company, except any unsecured subordinated debt that, pursuant to its express terms, is senior or subordinate in right of payment to the Subordinated Notes. 

15. Ownership. Prior to due presentment of this Subordinated Note for registration of transfer, the Company may treat the Noteholder in
whose name this Subordinated Note is registered in the Security Register as the absolute owner of this Subordinated Note for receiving payments of principal and interest on this Subordinated Note and for all other purposes whatsoever, whether or not
this Subordinated Note be overdue, and the Company shall not be affected by any notice to the contrary. 
 16. Waiver and Consent.

 (a) Any consent or waiver given by the Noteholder of this Subordinated Note shall be conclusive and binding upon such Noteholder and upon
all future Noteholders of this Subordinated Note and of any Subordinated Note issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this

  
 18 

 
Subordinated Note. This Subordinated Note may also be amended or waived pursuant to, and in accordance with, the provisions of Section 7.3 of the Purchase Agreement. No delay or omission of
the Noteholder of this Subordinated Note to exercise any right or remedy accruing upon any Event of Default shall impair such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Any insured depository
institution which shall be a Noteholder of this Subordinated Note or which otherwise shall have any beneficial ownership interest in this Subordinated Note shall, by its acceptance of such Subordinated Note (or beneficial interest therein), be
deemed to have waived any right of offset with respect to the repayment of the indebtedness evidenced thereby. 
 (b) No waiver or amendment
of any term, provision, condition, covenant or agreement in the Subordinated Notes shall be effective except with the consent of the Noteholders holding not less than more than fifty percent (50%) in aggregate principal amount (excluding any
Subordinated Notes held by the Company or any of its Affiliates) of the Subordinated Notes at the time outstanding; provided, however, that without the consent of each Noteholder of an affected Subordinated Note, no such amendment or waiver
may: (i) reduce the principal amount of any Subordinated Note; (ii) reduce the rate of or change the time for payment of interest on any Subordinated Note; (iii) extend the maturity of any Subordinated Note; (iv) change the
currency in which payment of the obligations of the Company under the Subordinated Notes are to be made; (v) lower the percentage of aggregate principal amount of outstanding Subordinated Notes required to approve any amendment of the
Subordinated Notes; (vi) make any changes to Section 5 (Events of Default; Acceleration); Section 6 (Failure to Make Payments); Section 7 (Affirmative Covenants of
the Company); Section 8 (Negative Covenants of the Company), Section 14 (Priority) or Section 16 (Waiver and Consent) of the Subordinated Notes that adversely affects the
rights of any Noteholder; or (vii) disproportionately affect any of the Noteholders of the then outstanding Subordinated Notes. Notwithstanding the foregoing, the Company may amend or supplement the Subordinated Notes without the consent of the
Noteholders to cure any ambiguity, defect or inconsistency or to provide for uncertificated Subordinated Notes in addition to or in place of certificated Subordinated Notes, or to make any change that does not adversely affect the rights of any
Noteholder of any of the Subordinated Notes. No failure to exercise or delay in exercising, by any Noteholder of the Subordinated Notes, of any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege preclude any other or further exercise thereof, or the exercise of any other right or remedy provided by law, except as restricted hereby. The rights and remedies provided in this Subordinated Note are
cumulative and not exclusive of any right or remedy provided by law or equity. No notice or demand on the Company in any case shall, in itself, entitle the Company to any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Noteholders to any other or further action in any circumstances without notice or demand. No consent or waiver, expressed or implied, by the Noteholders to or of any breach or default by the Company in the
performance of its obligations hereunder shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance of the same or any other obligations of the Company hereunder. Failure on the part of the
Noteholders to complain of any acts or failure to act or to declare an Event of Default, irrespective of how long such failure continues, shall not constitute a waiver by the Noteholders of their rights hereunder or impair any rights, powers or
remedies on account of any breach or default by the Company. 

  
 19 

 17. Absolute and Unconditional Obligation of the Company. No provisions of this
Subordinated Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal and interest on this Subordinated Note at the times, places and rate, and in the coin or currency, herein prescribed.

 18. Successors and Assigns. This Subordinated Note shall be binding upon the Company, its successors and assigns, and inure to the
benefit of the Noteholder and its respective successors and permitted assigns. The Noteholder may assign all, or any part of, or any interest in, the Noteholder’s rights and benefits hereunder only to the extent and in the manner permitted by
the terms of this Note. To the extent of any such assignment, such assignee shall have the same rights and benefits against the Company and shall agree to be bound by and to comply with the terms and conditions of the Purchase Agreement as it would
have had if it were the Noteholder hereunder. 
 19. No Sinking Fund; Convertibility. This Subordinated Note is not entitled to the
benefit of any sinking fund. This Subordinated Note is not convertible into or exchangeable for any of the equity securities, other securities or assets of the Company or any subsidiary of the Company. 

20. No Recourse Against Others. No recourse under or upon any obligation, covenant or agreement contained in this Subordinated Note, or
for any claim based thereon or otherwise in respect thereof, will be had against any past, present or future shareholder, employee, officer, or director, as such, of the Company or of any predecessor or successor, either directly or through the
Company or any predecessor or successor, under any rule of law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such liability being expressly waived and released
by the acceptance of this Subordinated Note by the Noteholder of this Subordinated Note and as part of the consideration for the issuance of this Subordinated Note. 

21. Notices. All notices to the Company under this Subordinated Note shall be in writing and shall be delivered personally, or mailed,
postage prepaid, by U.S. registered or certified mail, return receipt requested, or sent by a responsible overnight commercial courier promising next business day delivery, to the Company at Pinnacle Bankshares Corporation, 622 Broad Street,
Altavista, Virginia 24517-1830, Attention: Aubrey H. Hall, III, Chief Executive Officer, or to such other address as the Company may provide to the Noteholders (the “Payment Office”). All notices to the Noteholders shall be in
writing and shall be mailed, postage prepaid, by U.S. registered or certified mail, return receipt requested, or sent by email to each Noteholder at such Noteholder’s address as set forth in the Security Register. Any notice given in accordance
with the foregoing shall be deemed given when delivered personally or, if mailed, three (3) Business Days after it shall have been deposited in the U.S. mail as aforesaid or, if sent by overnight courier, the Business Day following the date of
delivery to such courier (provided that next business day delivery was requested). 
 22. Further Issues. The Company may, without
the consent of the Noteholders of the Subordinated Notes, create and issue additional notes having the same terms and conditions of the Subordinated Notes (except for the Issue Date) so that such further notes shall be consolidated and form a single
series with the Subordinated Notes. 

  
 20 

 23. Governing Law; Interpretation. THIS SUBORDINATED NOTE WILL BE DEEMED TO BE A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES THEREOF. THIS SUBORDINATED NOTE IS INTENDED TO MEET THE
CRITERIA FOR QUALIFICATION OF THE OUTSTANDING PRINCIPAL AS TIER 2 CAPITAL UNDER THE REGULATORY GUIDELINES OF THE FEDERAL RESERVE, AND THE TERMS HEREOF SHALL BE INTERPRETED IN A MANNER TO SATISFY SUCH INTENT. 

[Signature Page Follows] 

  
 21 

 IN WITNESS WHEREOF, the undersigned has caused this Subordinated Note to be duly executed
and attested. 
  

			
	PINNACLE BANKSHARES CORPORATION

 
			
		
	By:	 	  

	Name:	 	[●]
	Title:	 	[●]

  

	
	ATTEST:
	
	  

	Name: [●]
	Title: [●]

  
 [Signature Page to
Subordinated Note] 

 ASSIGNMENT FORM 

To assign this Subordinated Note, fill in the form below: (I) or (we) assign and transfer this Subordinated Note to: 

 

	
	  

	(Print or type assignee’s name, address and zip code)
	
	  

	(Print or type assignee’s social security or tax identification no.)

 and irrevocably
appoint                            as agent to transfer this Subordinated Note on the books of the
Company. The agent may substitute another to act for it. 
  

									
	 Date:
	 	 	 		  	Your signature:	 	 
		 		 		  		 	(Sign exactly as your name appears on the face of this Subordinated Note)

									
					
		 		 		  	Tax identification no:	 	 

									
		
	 Signature guarantee:
	 	 
	 (Signatures must 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 Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”).)

 The undersigned certifies that it [is / is not] an Affiliate of the Company and that, to its knowledge, the proposed
transferee [is / is not] an Affiliate of the Company. 
 In connection with any transfer or exchange of this Subordinated Note occurring prior to the date
that is one year after the later of the date of original issuance of this Subordinated Note and the last date, if any, on which this Subordinated Note was owned by the Company or any Affiliate of the Company, the undersigned confirms that this
Subordinated Note is being: 
 CHECK ONE BOX BELOW: 
  

					
	 ☐
	  	(1)	  	 acquired for the undersigned’s own account, without transfer;

			
	 ☐
	  	(2)	  	 transferred to the Company;

			
	 ☐
	  	(3)	  	 transferred in accordance and in compliance with Rule 144A under the Securities Act of 1933, as amended (the
“Securities Act”);

			
	 ☐
	  	(4)	  	 transferred under an effective registration statement under the Securities Act;

			
	 ☐
	  	(5)	  	 transferred in accordance with and in compliance with Regulation S under the Securities
Act;

					
			
		  	(6)	  	 transferred to an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act);

			
		  	(7)	  	 transferred to an “accredited investor” (as defined in Rule 501(a)(4) under the Securities Act), not referred
to in item (6) that has been provided with the information designated under Section 4(d) of the Securities Act; or

			
		  	(8)	  	 transferred in accordance with another available exemption from the registration requirements of the Securities
Act.

 Unless one of the boxes is checked, the Company will refuse to register this Subordinated Note in the name of
any Person other than the registered holder thereof; provided, however, that if box (5), (6), (7) or (8) is checked, the Company may require, prior to registering any such transfer of this Subordinated Note, in its sole discretion, such
legal opinions, certifications and other information as the Company may reasonably request to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities
Act, such as the exemption provided by Rule 144 under the Securities Act. 
  

			
	Assignee’s signature:	 	 

  

			
	 Signature guarantee:
	 	 
	 (Signatures must 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 Exchange Act Rule 17Ad-15).

 TO BE COMPLETED BY PURCHASER IF BOX (1) OR (3) ABOVE IS CHECKED: 

The undersigned represents and warrants that it is purchasing this Subordinated Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges
that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s
foregoing representations in order to claim the exemption from registration provided by Rule 144A. 
  

									
	 Date:
	 	 	 		  	Assignee’s signature:	 	 

 EXHIBIT B 

OPINION OF COUNSEL 

1. Based solely on the certificate of existence and other certificates provided by the Company, the Company (i) has been incorporated and
is validly existing under the laws of the Commonwealth of Virginia, (ii) has all requisite power and authority to carry on its business and to own, lease and operate its properties and assets as described in the Company’s Reports and
(iii) is duly qualified or licensed to do business and is in good standing as a foreign corporation authorized to do business in each jurisdiction in which the nature of such businesses or the ownership or leasing of such properties requires
such qualification, except where the failure to be so qualified would not, individually or in the aggregate, have a Material Adverse Effect on the Company and any of its Subsidiaries. 

2. The Company has all necessary corporate power and authority to execute, deliver and perform its obligations under the Transaction Documents
to which it is a party and to consummate the transactions contemplated by the Transaction Documents. 
 3. The Agreement has been duly and
validly authorized, executed and delivered by the Company. The Agreement constitutes a legal valid and binding obligation of Company, enforceable against Company in accordance with its terms, except that the enforcement thereof may be subject to
(i) bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent conveyance, fraudulent transfer or other similar laws now or hereafter in effect relating to creditors’ rights generally and (ii) general principles of
equity (whether applied by a court of law or equity) and the discretion of the court before which any proceeding therefor may be brought. 

4. The Subordinated Notes have been duly and validly authorized by the Company and, when issued by the Company and delivered to and paid for
by the applicable Purchasers in accordance with the terms of the Agreement and the Subordinated Notes, will have been duly executed, issued and delivered and will constitute legal, valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms, except that the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent conveyance, fraudulent transfer or other similar laws now or
hereafter in effect relating to creditors’ rights generally and (ii) general principles of equity (whether applied by a court of law or equity) and the discretion of the court before which any proceeding therefor may be brought. 

5. Assuming the accuracy of the representations and warranties of each of the Purchasers set forth in the Agreement, the Subordinated Notes to
be issued and sold by the Company to Purchasers pursuant to the Agreement will be issued in a transaction exempt from the registration requirements of the Securities Act. 

* The opinion letter of counsel will be subject to customary limitations, qualifications and carveouts.Exhibit 10.1

      

      

      

    

    

    

    

    8/6/2020

    

    

    Scott Stewart

    [***] 

    

    

    

    

    Dear Scott:

    
      

      

      We are pleased to extend you an offer of employment with USA
          Technologies, Inc. ("USAT" or "the Company") as Chief Accounting Officer with a tentative start date of September 15, 2020.

        In your role as Chief Accounting Officer, you will report to USAT's Chief Financial Officer ("CFO"). This position will be located in our Atlanta, GA office, will travel to Malvern, PA as necessary.

      

      

      The following are

          the terms of your employment:

      

      

      	
              •

            	
              Your annual base salary will be $275,000.00, reduced by 20% through the date of 12/31/20.

            

      

      

      	
              •

            	
              An additional signing bonus consistent of a cash payment of $50,000 is to be paid thirty (30) days after your first day of employment, provided you are employed by USAT on
                such date. The payment shall be subject to customary payroll and tax withholdings and deductions.

            

      

      

      	
              •

            	
              In addition to the compensation stated above, you are eligible for (i) the USAT Bonus Plan for Fiscal Year 2021 ("USAT Bonus Plan") of up to $125,000.00 and (ii) $62,500.00 ("Guaranteed Bonus Amount") which is equal to 50% of your USAT Bonus Plan.

            

      

      

      	
              •

            	
              You are
                  eligible to participate in the Long-Term Incentive Stock Plan ("LTI") for USAT's executive officers. If the year-over-year percentage target goals would be achieved, you would earn an annual grant award up to 20% of your base salary in Restricted Stock with a three-year vesting period. The award value is subject to and contingent upon approval by the, CEO, CFO, and USAT Board of Directors and to the terms and conditions of the LTI Plan.

            

      

      

      	
              •

            	
              USAT
                  will grant you the option to purchase 125,000 shares of USAT stock options on or around your start date, exercisable at the closing price of the shares on the date of grant. The options would vest on the anniversary of your start date for the

                next three years, as follows, provided that you are employed by USAT on the respective vesting dates: 41,666 shares on the each anniversary date with one half of this number (20,833) contingent on operational performance targets assigned by the Board of Directors.

            

      

      

      	
              •

            	
              The
                  Compensation Committee of USAT's Board of Directors, in consultation with
                the Chief Executive Officer, shall annually review your compensation.

            

      

      

      

      

      

      

      T 800.633.0340
        / 610.989.0340 100 Deerfield Lane. Suite
          300. Malvern. PA 19355

    

    
      

      
        

      

    

    

    

    

    

    
      	
              •

            	
              You
                  would be covered by and entitled to all the fringe benefits that are generally available to USAT employees, including health insurance, dental
                  insurance, vision insurance, group life and disability insurance, and 401(k) plan.

            

      

      

      	
              •

            	
              You become eligible for PTO on
                  the first of the month following your date of hire and it will be prorated based on the number of months you work in your first calendar year. You will accrue 1.5 days monthly to a maximum of eighteen (18) days

                  per year. In addition to your PTO, USAT observes seven (7) Company Holidays.

            

      

      

      	
              •

            	
              You will devote your full time, energy, skills and attention to the business of USAT, and shall not be engaged or employed in any other business activity whatsoever, whether or not such activity is pursued for gain, profit or other

                  pecuniary advantage.

            

      

      

      	
              •

            	
              Employment

                with USAT is at-will, which
                  means that either you or USAT may end the relationship at any time for any or no reason. The term "Cause" shall mean any of the following have occurred or exist as determined by USAT: (A) your fraud, gross malfeasance, or willful misconduct,
                  with respect to USAT's business; (B) any material breach by you of this letter or any policy of USAT; (C) any violation by you of any law, rule or regulation, which violation results or could reasonably be expected to result in material harm to the business or reputation of USAT; (D) conviction of or the entry of a guilty plea or plea of no contest to any felony or to any other crime involving

                  moral turpitude; (E) any
                  intentional misapplication by you of USAT's funds, or any material act of dishonesty committed by you; or (F) any other action by you that, in the reasonable judgment of USAT, is damaging or detrimental in a significant way to USAT's business or reputation. For the purposes of this paragraph, the term USAT shall mean and include any affiliate (as such term is defined in Rule 144 under the Securities Act of 1933) of USAT, whether on the date of this letter or in the future, including but not limited to Cantaloupe Systems, Inc.

            

      

      

      	
              •

            	
              
                
                  Except in connection with your duties as Chief Accounting Officer, you shall not, directly or indirectly, at any time from and after the date hereof, and whether or not your employment with USAT has been terminated or has expired for any reason whatsoever, make any use of, exploit, disclose, or divulge to any other person, firm, or corporation, any confidential information, including but not limited to, proprietary information, trade secret, business secret, financial information, financial projections, documents, process, procedures, know-how, data, marketing information, marketing methods, marketing means, software information, intellectual property, special arrangement, or any other confidential information concerning the business or policies of USAT, or concerning USAT's customers, clients, accounts, or suppliers, that you learned as a result of, in connection with, through your employment with, or through your affiliation with USAT, but not information that can be shown through documentary evidence to be in the public domain, or infomation that falls into the public domain, unless such infomation falls into the public domain by your direct or indirect disclosure or other acts. You agree to use your best endeavors to prevent the unauthorized disclosure or publication of confidential information and not to copy nor remove confidential information from USAT's premises, whether physically or electronically, without the express written permission of USAT. For any and all purposes of this paragraph, the term USAT shall mean and include any affiliate (as such term is defined in Rule 144 under the Securities Act of 1933) of USAT, whether on the date of this letter or in the future, including but not limited to Cantaloupe Systems, Inc.

                  

                

            

      

      

      

      

      T 800.633.0340 / 610.989.0340 100 Deerfield Lane, Suite 300. Malvern. PA19355

    

    
      

      
        

      

    

    

    

    
    
      	
              •

            	
              For a one-year period

                  following termination or expiration of your employment with USAT for any reason whatsoever, you will not (a) directly or indirectly, solicit for hire for any business entity other than USAT, any person employed by USAT as of the date of termination or expiration of your employment; or (b)
                  directly or indirectly interfere with USAT's relations with any person employed by USAT as of the date of termination or expiration of your employment with USAT. Such restriction shall not limit any employee
                  or candidate responding to a
                  general job posting. For all purposes of this paragraph, the term USAT shall mean and include any affiliate (as such term is defined in Rule 144 under the Securities Act of 1933) of USAT, whether on the date of this letter or in the
                  future, including but not limited to, Cantaloupe Systems, Inc.

            

    

    

    

    
      	
              •

            	
              For a one-year period following termination or expiration of your employment with USAT for any reason whatsoever, you will be prohibited from soliciting any of USAT's customers in connection with engaging in a business competing with or similar to that of USAT as conducted as of the date of the termination or expiration of your employment,
                  including but not limited to, delivering

                services or products to unattended retail locations, and any related production, promotion, marketing, or sales activities relating thereto. For all
                  purposes of this paragraph, the term USAT shall mean and include any affiliate (as such term is defined in Rule 144 under the Securities Act of 1933) of USAT, whether on the date of this letter or in the future, including but not limited to, Cantaloupe Systems, Inc.

            

    

    
      	
              •

            	
              For a one-year period following the termination or expiration of your employment with USAT for any reason whatsoever, you will be prohibited from competing within any geographic area in which USAT's business was conducted as of the date of termination or expiration of your employment, with the business of USAT, as presently or as hereinafter conducted as of the termination or expiration of your employment, including but not limited to, delivering services or products to unattended retail locations, and any related production, promotion, marketing, or sales activities. The term "competing" means acting,

                directly or indirectly, as a partner, principal, stockholder, joint venture, associate, independent contractor, creditor of, consultant, trustee, lessor to, sub-lessor to, employee or agent of, or to have any other involvement with, any person, firm, corporation, or other business organization which is engaged in the businesses described in this paragraph. For any and all purposes
                of this paragraph, the term USAT shall mean and include any affiliate (as such term defined in Rule 144 under the Securities Act of 1933) of USAT, including but not limited to, Cantaloupe Systems, Inc.

            

    

    

    

    
      	
              •

            	
              You acknowledge that any

                  breach by you of the obligations set forth in this letter would substantially and materially impair and irreparably harm USAT's business and goodwill; that such impairment and harm would be difficult to measure; and, therefore, total compensation in solely monetary terms would be inadequate. Consequently, you agree that in the event of any breach or any threatened breach by you of any of the provisions of this letter, USAT shall be entitled, in addition to monetary damages or other remedies, and without posting bond, to equitable relief, including
                  injunctive relief, and to the payment by you of

                all costs and expenses incurred by USAT in
                enforcing the provisions thereof, including attorneys' fees. The

            

    

    

    

    

    

    T 800 .633.0340 /
        610.989.0340 100 Deerfield Lane, Suite 300. Malvern, PA 19355

    
      

      
        

      

    

    

     

      

    
      	
              

              

            	
              remedies granted to USAT in this letter are cumulative and are in addition to remedies otherwise available to USAT at law or in equity.

            

       

    

    

    
      	
              •

            	
              You acknowledge that you will be subject to the following policies of USAT: Employee Manual; Code of Business Conduct and Ethics; Blackout Period and Notification Policy; and Stock Ownership Guidelines for Directors and Executive Officers as well as any other applicable policies that may be adopted by USAT from time to time.

            

    

    

    

    
      	
              •

            	
              Nothing
                in this letter prohibits or prevents you from filing a charge with or participating, testifying, or assisting in any investigation, hearing, or other proceeding before any federal, state, or local government agency. You further understand that this letter does not limit your ability to make any disclosures that are protected under the whistleblower provisions of federal law or regulation. This letter does not limit your right to receive an award for information provided to any governmental agencies.

            

    

    

    

    
      	
              •

            	
              If any term or provision of this letter or the application thereof to any person
                or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this letter or the application of any such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this letter shall be valid and
                  enforceable to the fullest extent permitted by law.

            

    

    

    

    
      	
              •

            	
              You represent and warrant to USAT that you are not as of the date of this letter a party to or subject to any employment, non-compete, or similar agreement that would limit or prohibit, in whole or in part, the performance of your employment duties or responsibilities.

            

    

    

    

    

    

    This letter constitutes our entire agreement and understanding regarding the matters addressed herein, and merges and supersedes all prior or contemporaneous discussions, agreements and understandings

      of every nature between us regarding these matters. This letter may only be modified by an agreement in writing executed by both USAT

        and you.

    

    

    This letter will be governed by, and enforced in accordance

        with, the laws of the Commonwealth of Pennsylvania, without regard to the application of the principles of conflicts of laws.

    

    

    The rights and obligations of both parties under this Agreement shall inure to the benefit of, and shall be binding upon, their respective personal representatives, heirs, successors and assigns. This Agreement, or any part hereof, may be assigned by USAT without your consent. This Agreement, or any part thereof, may not be assigned
        by you.

    

    

    

    

    

    

    T 800.633.0340 / 610.989.0340 100 Deerfield Lane, Suite 300, Malvern, PA
        19355

    
      

      
        

      

    

    
      

      

      
      

      

      Your employment with USAT will also be subject to a satisfactory background investigation to be conducted by USAT.

      

      

      Scott, we are very much looking forward to your joining the USAT team! Please indicate your written acceptance by signing this letter and returning it to me by email.

      

      

      Sincerely,

      

      

      USA Technologies,
        Inc.

       

        

    

     
      	 By:

            	 /s/ Sean E. Feeney

            	 
	
              Sean Feeney, Chief Executive Officer

              

            

       

    
       

         

    

     

      

    Accepted and Agreed
        to: 

      

      	 By:

            	 /s/ Scott Stewart

            	 
	
              Scott Stewart

              

            

       

        

       

      
      	Dated:  

            	 8/6/2020

            	 
	
              

              

            

        

     

    
    
      

         

        

        

        

        

        

        T 800.633.0340 / 610.989.0340 100 Deerfield Lane. Suite 300. Malvern. PA 19355

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00314-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00314-of-00352.parquet"}]]