Document:

Exhibit 10.1

PARAMOUNT GOLD AND SILVER CORP.

Up to $30,000,000 of

Shares of Common Stock

(par value $0.001 per share)

 

Controlled Equity OfferingSM

 

Sales Agreement

 

	
April 11, 2014

	
Cantor Fitzgerald & Co.

	
499 Park Avenue

	
New York, NY 10022

 

Ladies and Gentlemen:

 

Paramount Gold and Silver Corp., a Delaware corporation (the “Company”), confirms its agreement (this “Agreement”) with Cantor Fitzgerald & Co. (the “Agent”), as follows:

 

1.            Issuance and Sale of Shares.  The Company agrees that, from time to time during the term of this Agreement, on the terms and subject to the conditions set forth herein, it may issue and sell through the Agent, up to $30,000,000 of shares of common stock (the “Placement Shares”) of the Company, par value $0.001 per share (the “Common Stock”); provided, however, that in no event shall the Company issue or sell through the Agent such number or dollar amount of Placement Shares that would (a) exceed the number or dollar amount of shares of Common Stock registered on the effective Registration Statement (defined below) pursuant to which the offering is being made or (b) exceed the number of authorized but unissued shares of Common Stock (the “Maximum Amount”). Notwithstanding anything to the contrary contained herein, the parties hereto agree that compliance with the limitations set forth in this Section 1 on the amount of Placement Shares issued and sold under this Agreement shall be the sole responsibility of the Company and that Agent shall have no obligation in connection with such compliance.  The issuance and sale of Placement Shares through Agent will be effected pursuant to the Registration Statement (as defined below) filed by the Company and declared effective by the Securities and Exchange Commission (the “Commission”) on March 31, 2014, although nothing in this Agreement shall be construed as requiring the Company to use the Registration Statement to issue Common Stock.

The Company has filed, in accordance with the provisions of the Securities Act of 1933, as amended (the “Securities Act”) and the rules and regulations thereunder (the “Securities Act Regulations”), with the Commission a registration statement on Form S-3 (File No. 333-194411), including a base prospectuses, relating to certain securities, including the Placement Shares to be issued from time to time by the Company, and which incorporates by reference documents that the Company has filed or will file in accordance with the provisions of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations thereunder.  The Company has prepared a prospectus supplement to the base prospectus included as part of the registration statement, which prospectus supplement relates to the Placement Shares to be issued from time to time by the Company (the “Prospectus Supplement”).  The Company will furnish to the Agent, for use by the Agent, copies of the prospectus included as part of such registration statement, as supplemented by the Prospectus Supplement, relating to the Placement Shares to be issued from time to time by the Company.  The Company may file one or more additional registration statements from time to time that will contain a base prospectus and related prospectus or prospectus supplement, if applicable (which shall be a Prospectus Supplement), with respect to the Placement Shares.  Except where the context otherwise requires, such registration statement(s), including all documents filed as part thereof or incorporated by reference therein, and including any information contained in a Prospectus (as defined below) subsequently filed with the Commission pursuant to Rule 424(b) under the Securities Act Regulations or deemed to be a part of such registration statement pursuant to Rule 430B of the Securities Act Regulations, is herein called the “Registration Statement.”  The base prospectus or base prospectuses, including all documents incorporated therein by reference, included in the Registration Statement, as it may be supplemented, if necessary, by the Prospectus Supplement, in the form in which such prospectus or prospectuses and/or Prospectus Supplement have most recently been filed by the Company with the Commission pursuant to Rule 424(b) under the Securities Act Regulations, together with the then issued Issuer Free Writing Prospectus(es), is herein called the “Prospectus.”

 

Any reference herein to the Registration Statement, any Prospectus Supplement, Prospectus or any Issuer Free Writing Prospectus (defined below) shall be deemed to refer to and include the documents, if any, incorporated by reference therein (the “Incorporated Documents”), including, unless the context otherwise requires, the documents, if any, filed as exhibits to such Incorporated Documents. Any reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement, any Prospectus Supplement, the Prospectus or any Issuer Free Writing Prospectus shall be deemed to refer to and include the filing of any document under the Exchange Act on or after the most-recent effective date of the Registration Statement, or the date of the Prospectus Supplement, Prospectus or such Issuer Free Writing Prospectus, as the case may be, and incorporated therein by reference.  For purposes of this Agreement, all references to the Registration Statement, the Prospectus or to any amendment or supplement thereto shall be deemed to include the most recent copy filed with the Commission pursuant to its Electronic Data Gathering Analysis and Retrieval System, or if applicable, the Interactive Data Electronic Application system when used by the Commission (collectively, “EDGAR”).

 

2.            Placements.  Each time that the Company wishes to issue and sell Placement Shares hereunder (each, a “Placement”), it will notify the Agent by email notice (or other method mutually agreed to in writing by the parties) of the number of Placement Shares to be issued, the time period during which sales are requested to be made, any limitation on the number of Placement Shares that may be sold in any one day and any minimum price below which sales may not be made (a “Placement Notice”), the form of which is attached hereto as Schedule 1.  The Placement Notice shall originate from any of the individuals from the Company set forth on Schedule 3 (with a copy to each of the other individuals from the Company listed on such schedule), and shall be addressed to each of the individuals from the Agent set forth on Schedule 3, as such Schedule 3 may be amended from time to time.  The Placement Notice shall be effective unless and until (i) the Agent declines to accept the terms contained therein for any reason, in its sole discretion, (ii) the entire amount of the Placement Shares thereunder have been sold, (iii) the Company suspends or terminates the Placement Notice or (iv) this Agreement has been terminated under the provisions of Section 12.  The amount of any discount, commission or other compensation to be paid by the Company to Agent in connection with the sale of the Placement Shares shall be calculated in accordance with the terms set forth in Schedule 2.  It is expressly acknowledged and agreed that neither the Company nor the Agent will have any obligation whatsoever with respect to a Placement or any Placement Shares unless and until the Company delivers a Placement Notice to the Agent and the Agent does not decline such Placement Notice pursuant to the terms set forth above, and then only upon the terms specified therein and herein.  In the event of a conflict between the terms of this Agreement and the terms of a Placement Notice, the terms of the Placement Notice will control.

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3.            Sale of Placement Shares by Agent.  Subject to the provisions of Section 5(a), the Agent, for the period specified in the Placement Notice, will use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulations and the rules of the NYSE MKT (the “Exchange”), to sell the Placement Shares up to the amount specified, and otherwise in accordance with the terms of such Placement Notice.  The Agent will provide written confirmation to the Company no later than the opening of the Trading Day (as defined below) immediately following the Trading Day on which it has made sales of Placement Shares hereunder setting forth the number of Placement Shares sold on such day, the compensation payable by the Company to the Agent pursuant to Section 2 with respect to such sales, and the Net Proceeds (as defined below) payable to the Company, with an itemization of the deductions made by the Agent (as set forth in Section 5(b)) from the gross proceeds that it receives from such sales.  Subject to the terms of the Placement Notice, the Agent may sell Placement Shares by any method permitted by law deemed to be an “at the market” offering as defined in Rule 415 of the Securities Act Regulations, including without limitation sales made directly on the Exchange, on any other existing trading market for the Common Stock or to or through a market maker.  Subject to the terms of a Placement Notice, the Agent may also sell Placement Shares by any other method permitted by law, including but not limited to in privately negotiated transactions.  “Trading Day” means any day on which Common Stock is traded on the Exchange.

 

4.            Suspension of Sales.  The Company or the Agent may, upon notice to the other party in writing (including by email correspondence to each of the individuals of the other party set forth on Schedule 3, if receipt of such correspondence is actually acknowledged by any of the individuals to whom the notice is sent, other than via auto-reply) or by telephone (confirmed immediately by verifiable facsimile transmission or email correspondence to each of the individuals of the other party set forth on Schedule 3), suspend any sale of Placement Shares (a “Suspension”); provided, however, that such suspension shall not affect or impair any party’s obligations with respect to any Placement Shares sold hereunder prior to the receipt of such notice.  While a Suspension is in effect any obligation under Sections 7(l), 7(m), and 7(n) with respect to the delivery of certificates, opinions, or comfort letters to the Agent, shall be waived, provided, however, that such waiver shall not apply for the Representation Date (defined below) occurring on the date that the Company files its annual report on Form 10‐K. Each of the parties agrees that no such notice under this Section 4 shall be effective against any other party unless it is made to one of the individuals named on Schedule 3 hereto, as such Schedule may be amended from time to time.

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5.             Sale and Delivery to the Agent; Settlement.

 

(a)            Sale of Placement Shares. On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, upon the Agent’s acceptance of the terms of a Placement Notice, and unless the sale of the Placement Shares described therein has been declined, suspended, or otherwise terminated in accordance with the terms of this Agreement, the Agent, for the period specified in the Placement Notice, will use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable law and regulations to sell such Placement Shares only to purchasers resident outside of Canada up to the amount specified, and otherwise in accordance with the terms of such Placement Notice.  The Company acknowledges and agrees that (i) there can be no assurance that the Agent will be successful in selling Placement Shares, (ii) the Agent will incur no liability or obligation to the Company or any other person or entity if it does not sell Placement Shares for any reason other than a failure by the Agent to use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable law and regulations to sell such Placement Shares as required under this Agreement and (iii) the Agent shall be under no obligation to purchase Placement Shares on a principal basis pursuant to this Agreement, except as otherwise agreed by the Agent and the Company.

 

(b)            Settlement of Placement Shares. Unless otherwise specified in the applicable Placement Notice, settlement for sales of Placement Shares will occur on the third (3rd) Trading Day (or such earlier day as is industry practice for regular-way trading) following the date on which such sales are made (each, a “Settlement Date”).  The Agent shall notify the Company of each sale of Placement Shares on the date of such sale.  The amount of proceeds to be delivered to the Company on a Settlement Date against receipt of the Placement Shares sold (the “Net Proceeds”) will be equal to the aggregate sales price received by the Agent, after deduction for (i) the Agent’s commission, discount or other compensation for such sales payable by the Company pursuant to Section 2 hereof, and (ii) any transaction fees imposed by any governmental or self-regulatory organization in respect of such sales.

 

(c)             Delivery of Placement Shares.  On or before each Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer the Placement Shares being sold by crediting the Agent’s or its designee’s account (provided the Agent shall have given the Company written notice of such designee at least one Trading Day prior to the Settlement Date) at The Depository Trust Company through its Deposit and Withdrawal at Custodian System or by such other means of delivery as may be mutually agreed upon by the parties hereto which in all cases shall be freely tradable, transferable, registered shares in good deliverable form.  On each Settlement Date, the Agent will deliver the related Net Proceeds in same day funds to an account designated by the Company on, or prior to, the Settlement Date.  The Company agrees that if the Company, or its transfer agent (if applicable), defaults in its obligation to deliver Placement Shares on a Settlement Date, the Company agrees that in addition to and in no way limiting the rights and obligations set forth in Section 10(a) hereto, it will (i) hold the Agent harmless against any loss, claim, damage, or expense (including reasonable legal fees and expenses), as incurred, arising out of or in connection with such default by the Company or its transfer agent (if applicable) and (ii) pay to the Agent any commission, discount, or other compensation to which it would otherwise have been entitled absent such default.

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(d)            Denominations; Registration.  Certificates for the Placement Shares, if any, shall be in such denominations and registered in such names as the Agent may request in writing at least one full Business Day (as defined below) before the Settlement Date.  The certificates for the Placement Shares, if any, will be made available by the Company for examination and packaging by the Agent in The City of New York not later than noon (New York time) on the Business Day prior to the Settlement Date.

 

(e)            Limitations on Offering Size.  Under no circumstances shall the Company cause or request the offer or sale of any Placement Shares if, after giving effect to the sale of such Placement Shares, the aggregate gross sales proceeds of Placement Shares sold pursuant to this Agreement would exceed the lesser of (A) together with all sales of Placement Shares under this Agreement, the Maximum Amount, (B) the amount available for offer and sale under the currently effective Registration Statement and (C) the amount authorized from time to time to be issued and sold under this Agreement by the Company’s board of directors, a duly authorized committee thereof or a duly authorized executive committee, and notified to the Agent in writing.  Under no circumstances shall the Company cause or request the offer or sale of any Placement Shares pursuant to this Agreement at a price lower than the minimum price authorized from time to time by the Company’s board of directors, a duly authorized committee thereof or a duly authorized executive committee, and notified to the Agent in writing.  Further, under no circumstances shall the Company cause or permit the aggregate offering amount of Placement Shares sold pursuant to this Agreement to exceed the Maximum Amount.

 

6.             Representations and Warranties of the Company.  The Company represents and warrants to, and agrees with Agent that as of the date of this Agreement and as of each Applicable Time (as defined below):

 

(a)            Registration Statement and Prospectus.  The Company and the transactions contemplated by this Agreement meet the requirements for and comply with the applicable conditions set forth in Form S 3 (including General Instruction I.A and I.B) under the Securities Act.  The Registration Statement has been filed with the Commission and has been declared effective by the Commission under the Securities Act.  The Prospectus Supplement will name the Agent as the agent in the section entitled “Plan of Distribution.” The Company has not received, and has no notice of, any order of the Commission preventing or suspending the use of the Registration Statement, or threatening or instituting proceedings for that purpose.  The Registration Statement and the offer and sale of Placement Shares as contemplated hereby meet the requirements of Rule 415 under the Securities Act and comply in all material respects with said Rule.  Any statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement have been so described or filed.  Copies of the Registration Statement, the Prospectus, and any such amendments or supplements and all documents incorporated by reference therein that were filed with the Commission on or prior to the date of this Agreement have been delivered, or are available through EDGAR, to Agent and its counsel.  The Company has not distributed and, prior to the later to occur of each Settlement Date and completion of the distribution of the Placement Shares, will not distribute any offering material in connection with the offering or sale of the Placement Shares other than the Registration Statement and the Prospectus and any Issuer Free Writing Prospectus (as defined below) to which the Agent has consented.  The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and is currently listed on the Exchange under the trading symbol “PZG.”  The Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act, delisting the Common Stock from the Exchange or the Toronto Stock Exchange (the “TSX”), nor has the Company received any notification that the Commission, the Exchange or the TSX is contemplating terminating such registration or listing. To the Company’s knowledge, it is in compliance with all applicable listing requirements of the Exchange and TSX.  The Company has no reason to believe that it will not in the foreseeable future continue to be in compliance with all such listing and maintenance requirements.

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(b)            No Misstatement or Omission.  The Registration Statement, when it became or becomes effective, and the Prospectus, and any amendment or supplement thereto, on the date of such Prospectus or amendment or supplement, conformed and will conform in all material respects with the requirements of the Securities Act.  At each Settlement Date, the Registration Statement and the Prospectus, as of such date, will conform in all material respects with the requirements of the Securities Act.  The Registration Statement, when it became or becomes effective, did not, and will not, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.  The Prospectus and any amendment and supplement thereto, on the date thereof and at each Applicable Time (defined below), did not or will not include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.  The documents incorporated by reference in the Prospectus or any Prospectus Supplement did not, and any further documents filed and incorporated by reference therein will not, when filed with the Commission, contain an untrue statement of a material fact or omit to state a material fact required to be stated in such document or necessary to make the statements in such document, in light of the circumstances under which they were made, not misleading.  The foregoing shall not apply to statements in, or omissions from, any such document made in reliance upon, and in conformity with, information furnished to the Company by Agent specifically for use in the preparation thereof.

 

(c)            Conformity with Securities Act and Exchange Act.  The Registration Statement, the Prospectus, any Issuer Free Writing Prospectus or any amendment or supplement thereto, and the documents incorporated by reference in the Registration Statement, the Prospectus or any amendment or supplement thereto, when such documents were or are filed with the Commission under the Securities Act or the Exchange Act or became or become effective under the Securities Act, as the case may be, conformed or will conform in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable. Moreover, the Company is a reporting issuer in good standing under applicable securities laws and regulations in Canada and the laws and policies of the TSX (collectively, “Canadian Securities Laws”); is not in default in any material respect of any requirement of Canadian Securities Laws and is not included in a list of defaulting reporting issuers maintained by the applicable securities commissions in Canada. In particular, without limiting the foregoing, the Company is in compliance at the date hereof with its obligations to make timely disclosure of all material changes to it.

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(d)            Financial Information.  The consolidated financial statements of the Company included or incorporated by reference in the Registration Statement, the Prospectus and the Issuer Free Writing Prospectuses, if any, together with the related notes and schedules, present fairly, in all material respects, the consolidated financial position of the Company and the Subsidiaries (as defined below) as of the dates indicated and the consolidated results of operations, cash flows and changes in stockholders’ equity of the Company for the periods specified and have been prepared in compliance with the requirements of the Securities Act and Exchange Act and in conformity with GAAP (as defined below) applied on a consistent basis during the periods involved; the other financial and statistical data with respect to the Company and the Subsidiaries (as defined below) contained or incorporated by reference in the Registration Statement, the Prospectus and the Issuer Free Writing Prospectuses, if any, are accurately and fairly presented and prepared on a basis consistent with the financial statements and books and records of the Company; there are no financial statements (historical or pro forma) that are required to be included or incorporated by reference in the Registration Statement, or the Prospectus that are not included or incorporated by reference as required; the Company and the Subsidiaries (as defined below) do not have any material liabilities or obligations, direct or contingent (including any off-balance sheet obligations), not described in the Registration Statement (excluding the exhibits thereto), and the Prospectus; and all disclosures contained or incorporated by reference in the Registration Statement, the Prospectus and the Issuer Free Writing Prospectuses, if any, regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission) comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K under the Securities Act, to the extent applicable. Moreover, the Company is in compliance with the certification requirements contained in National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings of the Canadian Securities Administrators with respect to the Company’s annual and interim filings with Canadian securities regulators.

 

(e)            Conformity with EDGAR Filings.  The Prospectus delivered to Agent for use in connection with the sale of the Placement Shares pursuant to this Agreement will be identical to the versions of the Prospectus created to be transmitted to the Commission for filing via EDGAR, except to the extent permitted by Regulation S‐T or other applicable law.

 

(f)            Organization.  The Company and each of its Subsidiaries (as defined below) are, and will be, duly organized, validly existing as a corporation and in good standing under the laws of their respective jurisdictions of organization.  The Company and each of its Subsidiaries (as defined below) are, and will be, duly licensed or qualified as a foreign corporation for transaction of business and in good standing under the laws of each other jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such license or qualification, and have all corporate power and authority necessary to own or hold their respective properties and to conduct their respective businesses as described in the Registration Statement and the Prospectus, except where the failure to be so qualified or in good standing or have such power or authority would not, individually or in the aggregate, have a material adverse effect or would reasonably be expected to have a material adverse effect on or affecting the assets, business, operations, earnings, properties, condition (financial or otherwise), prospects, stockholders’ equity or results of operations of the Company and the Subsidiaries (as defined below) taken as a whole, or prevent or materially interfere with consummation of the transactions contemplated hereby (a “Material Adverse Effect”).

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(g)            Subsidiaries.  The subsidiaries set forth on Schedule 4 (collectively, the “Subsidiaries”), are the Company’s only significant subsidiaries (as such term is defined in Rule 1‐02 of Regulation S‐X promulgated by the Commission).  Except as set forth in the Registration Statement and in the Prospectus, the Company owns, directly or indirectly, all of the equity interests of the Subsidiaries free and clear of any lien, charge, security interest, encumbrance, right of first refusal or other restriction, and all the equity interests of the Subsidiaries are validly issued and are fully paid, nonassessable and free of preemptive and similar rights.

 

(h)            No Violation or Default.  Neither the Company nor any of its Subsidiaries is (i) in violation of its charter or by‐laws or similar organizational documents; (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound or to which any of the property or assets of the Company or any of its Subsidiaries are subject; or (iii) in violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except, in the case of each of clauses (ii) and (iii) above, for any such violation or default that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  To the Company’s knowledge, no other party under any material contract or other agreement to which it or any of its Subsidiaries is a party is in default in any respect thereunder where such default would have a Material Adverse Effect.

 

(i)            No Material Adverse Change.  Subsequent to the respective dates as of which information is given in the Registration Statement, the Prospectus and the Free Writing Prospectuses, if any (including any document deemed incorporated by reference therein), there has not been (i) any Material Adverse Effect or the occurrence of any development that the Company reasonably expects will result in a Material Adverse Effect, (ii) any transaction which is material to the Company and the Subsidiaries taken as a whole, (iii) any obligation or liability, direct or contingent (including any off-balance sheet obligations), incurred by the Company or any Subsidiary, which is material to the Company and the Subsidiaries taken as a whole, (iv) any material change in the capital stock or outstanding long-term indebtedness of the Company or any of its Subsidiaries or (v) any dividend or distribution of any kind declared, paid or made on the capital stock of the Company or any Subsidiary, other than in each case above in the ordinary course of business or as otherwise disclosed in the Registration Statement or Prospectus (including any document deemed incorporated by reference therein).

 

(j)            Capitalization.  The issued and outstanding shares of capital stock of the Company have been validly issued, are fully paid and nonassessable and, other than as disclosed in the Registration Statement or the Prospectus, are not subject to any preemptive rights, rights of first refusal or similar rights.  The Company has an authorized, issued and outstanding capitalization as set forth in the Registration Statement and the Prospectus as of the dates referred to therein (other than the grant of additional options under the Company’s existing stock option plans, or changes in the number of outstanding shares of Common Stock of the Company due to the issuance of shares upon the exercise or conversion of securities exercisable for, or convertible into, Common Stock outstanding on the date hereof) and such authorized capital stock conforms to the description thereof set forth in the Registration Statement and the Prospectus.  The description of the securities of the Company in the Registration Statement and the Prospectus is complete and accurate in all material respects.  Except as disclosed in or contemplated by the Registration Statement or the Prospectus, as of the date referred to therein, the Company does not have outstanding any options to purchase, or any rights or warrants to subscribe for, or any securities or obligations convertible into, or exchangeable for, or any contracts or commitments to issue or sell, any shares of capital stock or other securities.

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(k)            Authorization; Enforceability.  The Company has full legal right, power and authority to enter into this Agreement and perform the transactions contemplated hereby.  This Agreement has been duly authorized, executed and delivered by the Company and is a legal, valid and binding agreement of the Company enforceable in accordance with its terms, except to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general equitable principles.

 

(l)            Authorization of Placement Shares.  The Placement Shares, when issued and delivered pursuant to the terms approved by the board of directors of the Company or a duly authorized committee thereof, or a duly authorized executive committee, against payment therefor as provided herein, will be duly and validly authorized and issued and fully paid and nonassessable, free and clear of any pledge, lien, encumbrance, security interest or other claim, including any statutory or contractual preemptive rights, resale rights, rights of first refusal or other similar rights, and will be registered pursuant to Section 12 of the Exchange Act.  The Placement Shares, when issued, will conform in all material respects to the description thereof set forth in or incorporated into the Prospectus.

 

(m)            No Consents Required.  No consent, approval, authorization, order, registration or qualification of or with any court or arbitrator or governmental or regulatory authority is required for the execution, delivery and performance by the Company of this Agreement, the issuance and sale by the Company of the Placement Shares, except for such consents, approvals, authorizations, orders and registrations or qualifications as may be required under applicable state securities laws or by the by‐laws and rules of the Financial Industry Regulatory Authority (“FINRA”), the Exchange, or the TSX in connection with the sale of the Placement Shares by the Agent.

 

(n)            No Preferential Rights.  Except as set forth in the Registration Statement and the Prospectus, (i) no person, as such term is defined in Rule 1‐02 of Regulation S‐X promulgated under the Securities Act (each, a “Person”), has the right, contractual or otherwise, to cause the Company to issue or sell to such Person any Common Stock or shares of any other capital stock or other securities of the Company (other than upon the exercise of options or warrants to purchase Common Stock or upon the exercise of options that may be granted from time to time under the Company’s stock option plans), (ii) no Person has any preemptive rights, resale rights, rights of first refusal, rights of co-sale, or any other rights (whether pursuant to a “poison pill” provision or otherwise) to purchase any Common Stock or shares of any other capital stock or other securities of the Company, (iii)  no Person has the right to act as an underwriter or as a financial advisor to the Company in connection with the offer and sale of the Common Stock, and (iv) no Person has the right, contractual or otherwise, to require the Company to register under the Securities Act any Common Stock or shares of any other capital stock or other securities of the Company, or to include any such shares or other securities in the Registration Statement or the offering contemplated thereby, whether as a result of the filing or effectiveness of the Registration Statement or the sale of the Placement Shares as contemplated thereby or otherwise.

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(o)            Independent Public Accounting Firm.  MNP LLP (the “Accountant”), whose report on the consolidated financial statements of the Company is filed with the Commission as part of the Company’s most recent Annual Report on Form 10-K filed with the Commission and incorporated by reference into the Registration Statement and the Prospectus, are and, during the periods covered by their report, were an independent registered public accounting firm within the meaning of the Securities Act and the Public Company Accounting Oversight Board (United States).  To the Company’s knowledge, after due and careful inquiry, the Accountant is not in violation of the auditor independence requirements of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) with respect to the Company. Moreover, the Accountant is considered an independent accountant as required under Canadian Securities Laws and there has never been a reportable disagreement (within the meaning of National Instrument 51-102 – Continuous Disclosure) with the present or former auditors of the Company. The Company’s audit committee is comprised and operates in accordance with the requirements of National Instrument 52-110 – Audit Committees of the Canadian Securities Administrators, each of whom is “independent” within the meaning of such instrument.

 

(p)            Enforceability of Agreements.  All agreements between the Company and third parties expressly referenced in the Prospectus are legal, valid and binding obligations of the Company enforceable in accordance with their respective terms, except to the extent that (i) enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general equitable principles and (ii) the indemnification provisions of certain agreements may be limited by federal or state securities laws or public policy considerations in respect thereof, and except for any unenforceability that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

 

(q)            No Litigation.  Except as set forth in the Registration Statement or the Prospectus, there are no legal, governmental or regulatory actions, suits or proceedings pending, nor, to the Company’s knowledge, any legal, governmental or regulatory audits or investigations, to which the Company or a Subsidiary is a party or to which any property of the Company or any of its Subsidiaries is the subject that, individually or in the aggregate, if determined adversely to the Company or any of its Subsidiaries, would reasonably be expected to have a Material Adverse Effect or materially and adversely affect the ability of the Company to perform its obligations under this Agreement; to the Company’s knowledge, no such actions, suits or proceedings are threatened or contemplated by any governmental or regulatory authority or threatened by others; and (i) there are no current or pending legal, governmental or regulatory audits or investigations, actions, suits or proceedings that are required under the Securities Act to be described in the Prospectus that are not so described; and (ii) there are no contracts or other documents that are required under the Securities Act to be filed as exhibits to the Registration Statement that are not so filed.

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(r)            Consents and Permits.  The Company and each Subsidiary possess such valid and current certificates, authorizations or permits issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct their respective businesses, and neither the Company nor any Subsidiary has received, or has any reason to believe that it will receive, any notice of proceedings relating to the revocation or modification of, or non-compliance with, any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, could result in a Material Adverse Effect.

 

(s)            Intellectual Property.  Except as disclosed in the Registration Statement and the Prospectus, the Company and its Subsidiaries own, possess, license or have other rights to use all foreign and domestic patents, patent applications, trade and service marks, trade and service mark registrations, trade names, copyrights, licenses, inventions, trade secrets, technology, Internet domain names, know-how and other intellectual property (collectively, the “Intellectual Property”), necessary for the conduct of their respective businesses as now conducted except to the extent that the failure to own, possess, license or otherwise hold adequate rights to use such Intellectual Property would not, individually or in the aggregate, have a Material Adverse Effect.  Except as disclosed in the Registration Statement and the Prospectus (i) there are no rights of third parties to any such Intellectual Property owned by the Company and its Subsidiaries; (ii) to the Company’s knowledge, there is no infringement by third parties of any such Intellectual Property; (iii) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the Company’s and its Subsidiaries’ rights in or to any such Intellectual Property, and the Company is unaware of any facts which could form a reasonable basis for any such action, suit, proceeding or claim; (iv) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property; (v) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others that the Company and its Subsidiaries infringe or otherwise violate any patent, trademark, copyright, trade secret or other proprietary rights of others; (vi) to the Company’s knowledge, there is no third-party U.S. patent or published U.S. patent application which contains claims for which an Interference Proceeding (as defined in 35 U.S.C. § 135) has been commenced against any patent or patent application described in the Prospectus as being owned by or licensed to the Company; and (vii) the Company and its Subsidiaries have complied with the terms of each agreement pursuant to which Intellectual Property has been licensed to the Company or such Subsidiary, and all such agreements are in full force and effect, except, in the case of any of clauses (i)-(vii) above, for any such infringement by third parties or any such pending or threatened suit, action, proceeding or claim as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

(t)            Market Capitalization.  At the time the Registration Statement was  originally declared effective, and at the time the Company’s most recent Annual Report on Form 10-K was filed with the Commission, the Company met the then applicable requirements for the use of Form S-3 under the Securities Act, including but not limited to Instruction I.B.1 of Form S-3.  The Company satisfies the pre-1992 eligibility requirements for the use of a registration statement on Form S-3 in connection with this offering (the pre-1992 eligibility requirements for the use of the registration statement on Form S-3 include (i) having a non-affiliate, public common equity float of at least $150 million or a non-affiliate, public common equity float of at least $100 million and annual trading volume of at least three million shares and (ii) having been subject to the Exchange Act reporting requirements for a period of 36 months).  The Company is not a shell company (as defined in Rule 405 under the Securities Act) and has not been a shell company for at least 12 calendar months previously and if it has been a shell company at any time previously, has filed current Form 10 information (as defined in Instruction I.B.6 of Form S-3) with the Commission at least 12 calendar months previously reflecting its status as an entity that is not a shell company.

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(u)            No Material Defaults.  Neither the Company nor any of the Subsidiaries has defaulted on any installment on indebtedness for borrowed money or on any rental on one or more long-term leases, which defaults, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.  The Company has not filed a report pursuant to Section 13(a) or 15(d) of the Exchange Act since the filing of its last Annual Report on Form 10‐K, indicating that it (i) has failed to pay any dividend or sinking fund installment on preferred stock or (ii) has defaulted on any installment on indebtedness for borrowed money or on any rental on one or more long-term leases, which defaults, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.

 

(v)            Certain Market Activities.  Neither the Company, nor any of the Subsidiaries, nor any of their respective directors, officers or controlling persons has taken, directly or indirectly, any action designed, or that has constituted or might reasonably be expected to cause or result in, under the Exchange Act or otherwise, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Placement Shares.

 

(w)            Broker/Dealer Relationships.  Neither the Company nor any of the Subsidiaries or any related entities (i) is required to register as a “broker” or “dealer” in accordance with the provisions of the Exchange Act or (ii) directly or indirectly through one or more intermediaries, controls or is a “person associated with a member” or “associated person of a member” (within the meaning set forth in the FINRA Manual).

 

(x)            No Reliance.  The Company has not relied upon the Agent or legal counsel for the Agent for any legal, tax or accounting advice in connection with the offering and sale of the Placement Shares.

 

(y)            Taxes.  The Company and each of its Subsidiaries have filed all federal, state, local and foreign tax returns which have been required to be filed and paid all taxes shown thereon through the date hereof, to the extent that such taxes have become due and are not being contested in good faith, except where the failure to so file or pay would not have a Material Adverse Effect.  Except as otherwise disclosed in or contemplated by the Registration Statement or the Prospectus, no tax deficiency has been determined adversely to the Company or any of its Subsidiaries which has had, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.  The Company has no knowledge of any federal, state or other governmental tax deficiency, penalty or assessment which has been or might be asserted or threatened against it which would have a Material Adverse Effect.

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(z)            Title to Real and Personal Property.  Except as set forth in the Registration Statement or the Prospectus, the Company and its Subsidiaries have good and marketable title in fee simple to all items of real property owned by them, good and valid title to all personal property described in the Registration Statement or Prospectus as being owned by them that are material to the businesses of the Company or such Subsidiary, in each case free and clear of all liens, encumbrances and claims, except those matters that (i) do not materially interfere with the use made and proposed to be made of such property by the Company and any of its Subsidiaries or (ii) would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.  Any real or personal property described in the Registration Statement or Prospectus as being leased by the Company and any of its Subsidiaries is held by them under valid, existing and enforceable leases, except those that (A) do not materially interfere with the use made or proposed to be made of such property by the Company or any of its Subsidiaries or (B) would not be reasonably expected, individually or in the aggregate, to have a Material Adverse Effect.  Each of the properties of the Company and its Subsidiaries complies with all applicable codes, laws and regulations (including, without limitation, building and zoning codes, laws and regulations and laws relating to access to such properties), except if and to the extent disclosed in the Registration Statement or Prospectus or except for such failures to comply that would not, individually or in the aggregate, reasonably be expected to interfere in any material respect with the use made and proposed to be made of such property by the Company and its Subsidiaries or otherwise have a Material Adverse Effect.  None of the Company or its subsidiaries has received from any governmental or regulatory authorities any notice of any condemnation of, or zoning change affecting, the properties of the Company and its Subsidiaries, and the Company knows of no such condemnation or zoning change which is threatened, except for such that would not reasonably be expected to interfere in any material respect with the use made and proposed to be made of such property by the Company and its Subsidiaries or otherwise have a Material Adverse Effect, individually or in the aggregate.

 

(aa)          Environmental Laws.  Except as set forth in the Registration Statement or the Prospectus:

 

 (i)            each of the Company and the Subsidiaries is in compliance in all material respects with all applicable federal, provincial, state, municipal and local laws, statutes, ordinances, by-laws and regulations and orders, directives and decisions rendered by any ministry, department or administrative or regulatory agency, domestic or foreign (the “Environmental Laws”) relating to the protection of the environment, occupational health and safety or the processing, use, treatment, storage, disposal, discharge, transport or handling of any pollutants, contaminants, chemicals or industrial, toxic or hazardous wastes or substance (the “Hazardous Substances”);

 

 (ii)            each of the Company and the Subsidiaries has obtained all licenses, permits, approvals, consents, certificates, registrations and other authorizations under all applicable Environmental Laws (the “Environmental Permits”) necessary as at the date hereof for the operation of the businesses carried on or proposed to be commenced by the Company and the Subsidiaries and each Environmental Permit is valid, subsisting and in good standing and to the knowledge of Company neither the Company nor the Subsidiaries is in default or breach of any Environmental Permit which would have a Material Adverse Effect, and no proceeding is pending or, to the knowledge of the Company or the Subsidiaries, threatened, to revoke or limit any Environmental Permit;

 

 (iii)            neither the Company nor the Subsidiaries has used, except in compliance with all Environmental Laws and Environmental Permits, and other than as may be incidental to mineral resource exploration or development, any property or facility which it owns or leases or previously owned or leased, to generate, manufacture, process, distribute, use, treat, store, dispose of, transport or handle any Hazardous Substance;

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 (iv)            neither the Company nor the Subsidiaries (including, if applicable, any predecessor companies) has received any notice of, or been prosecuted for an offence alleging, non-compliance with any Environmental Law, and neither the Company nor the Subsidiaries (including, if applicable, any predecessor companies) has settled any allegation of non-compliance short of prosecution.  There are no orders or directions relating to environmental matters requiring any material work, repairs, construction or capital expenditures to be made with respect to any of the assets of the Company or the Subsidiaries, nor has the Company or the Subsidiaries received notice of any of the same; and

 

 (v)            neither the Company nor the Subsidiaries has received any notice wherein it is alleged or stated that the Company or the Subsidiaries is potentially responsible for a federal, provincial, state, municipal or local clean-up site or corrective action under any Environmental Laws.  Neither the Company nor the Subsidiaries has received any request for information in connection with any federal, state, municipal or local inquiries as to disposal sites.

 

(bb)        Disclosure Controls.  The Company and each of its Subsidiaries maintain systems of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.  The Company’s internal control over financial reporting is effective and the Company is not aware of any material weaknesses in its internal control over financial reporting (other than as set forth in the Prospectus).  Since the date of the latest audited financial statements of the Company included in the Prospectus, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting (other than as set forth in the Prospectus).  The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a‐15 and 15d‐15) for the Company and designed such disclosure controls and procedures to ensure that material information relating to the Company and each of its Subsidiaries is made known to the certifying officers by others within those entities, particularly during the period in which the Company’s Annual Report on Form 10‐K or Quarterly Report on Form 10-Q, as the case may be, is being prepared.  The Company’s certifying officers have evaluated the effectiveness of the Company’s controls and procedures as of a date within 90 days prior to the filing date of the Form 10‐K for the fiscal year most recently ended (such date, the “Evaluation Date”).  The Company presented in its Form 10‐K for the fiscal year most recently ended the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date and the disclosure controls and procedures are effective.  Since the Evaluation Date, there have been no significant changes in the Company’s internal controls (as such term is defined in Item 307(b) of Regulation S‐K under the Securities Act) or, to the Company’s knowledge, in other factors that could significantly affect the Company’s internal controls.

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(cc)         Sarbanes-Oxley.  There is and has been no failure on the part of the Company or, to the Company’s knowledge, any of the Company’s directors or officers, in their capacities as such, to comply in all material respects with any applicable provisions of the Sarbanes-Oxley Act and the rules and regulations promulgated thereunder.  Each of the principal executive officer and the principal financial officer of the Company (or each former principal executive officer of the Company and each former principal financial officer of the Company as applicable) has made all certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act with respect to all reports, schedules, forms, statements and other documents required to be filed by it or furnished by it to the Commission.  For purposes of the preceding sentence, “principal executive officer” and “principal financial officer” shall have the meanings given to such terms in the Sarbanes-Oxley Act. Moreover, there is and has been no failure on the part of the Company or any of the Company’s directors or officers, in their capacities as such, to comply in all material respects with applicable provisions of Canadian securities laws.

 

(dd)        Mining Rights. The Sleeper Gold Property and the San Miguel Property, as described in the Registration Statement, the Prospectus and the Prospectus Supplement (collectively, the “Material Properties”) are the only material resource properties in which the Company or the Subsidiaries have an interest; the Company or through its Subsidiaries, hold either freehold title, mining leases, mining concessions, mining claims, exploration permits, prospecting permits or participant interests or other conventional property or proprietary interests or rights, recognized in the jurisdiction in which the Material Properties are located, in respect of the ore bodies and minerals located on the Material Properties in which the Company (through the applicable Subsidiary) has an interest under valid, subsisting and enforceable title documents or other recognized and enforceable agreements or instruments, sufficient to permit the Company (through the applicable Subsidiary) to explore for and exploit the minerals relating thereto; all leases or claims and permits relating to the Material Properties in which the Company (through the applicable Subsidiary) has an interest or right have been validly located and recorded in accordance with all applicable laws and are valid and subsisting, except where failure to so locate or record would not reasonably be expected to have a Material Adverse Effect; the Company (through the applicable Subsidiary) has all necessary surface rights, access rights and other necessary rights and interests relating to the Material Property in which the Company (through the applicable Subsidiary) have an interest granting the Company (through the applicable Subsidiary) the right and ability to explore for and exploit minerals, ore and metals for development and production purposes as are appropriate in view of the rights and interest therein of the Company or the applicable Subsidiary, with only such exceptions as do not materially interfere with the current use made by the Company or the applicable Subsidiary of the rights or interest so held, and each of the proprietary interests or rights and each of the documents, agreements and instruments and obligations relating thereto referred to above is currently in good standing in all respects in the name of the Company or the applicable Subsidiary; except as disclosed in the Registration Statement and Prospectus, the Company and the Subsidiaries do not have any responsibility or obligation to pay any commission, royalty, license, fee or similar payment to any person with respect to the property rights thereof;

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(ee)         the Company or the applicable Subsidiary holds direct interests in the Material Properties, as described in the Registration Statement, the Prospectus and the Prospectus Supplement (the “Project Rights”), under valid, subsisting and enforceable agreements or instruments, to the knowledge of the Company and all such agreements and instruments in connection with the Project Rights are valid and subsisting and enforceable in accordance with their terms;

 

(ff)            the Company and the Subsidiaries have identified all the permits, certificates, and approvals (collectively, the “Permits”) which are required for the exploration of the Material Properties, which Permits include but are not limited to environmental assessment certificates, water licenses, land tenures, rezoning or zoning variances and other necessary local, provincial and federal approvals; except where failure to do so would not reasonably be expected to have a Material Adverse Effect, the appropriate Permits have either been received, applied for, or the processes to obtain such Permits have been or will in due course be initiated by the Company or the applicable Subsidiaries;

 

(gg)        all assessments or other work required to be performed in relation to the material mining claims and the mining rights of the Company and the applicable Subsidiary in order to maintain their respective interests therein, if any, have been performed to date and the Company and the applicable Subsidiary have complied with all applicable governmental laws, regulations and policies in this regard as well as with regard to legal, contractual obligations to third parties in this regard except in respect of mining claims and mining rights that the Company and the applicable Subsidiary intend to abandon or relinquish and except for any non-compliance which would not either individually or in the aggregate have a Material Adverse Effect; all such mining claims and mining rights are in good standing in all respects as of the date of this Agreement;

 

(hh)        [Reserved.]

 

(ii)            there are no environmental audits, evaluations, assessments, studies or tests relating to the Company or the Subsidiaries except for ongoing assessments conducted by or on behalf of the Company and the Subsidiaries in the ordinary course;

 

(jj)            the Company made available to the respective authors thereof prior to the issuance of all of the applicable technical reports relating to the Material Properties (the “Reports”), for the purpose of preparing the Reports, as applicable, all information requested, and no such information contained any misrepresentation as at the relevant time the relevant information was made available; and

 

(kk)         the Reports accurately and completely sets forth all material facts relating to the Material Properties; and since the date of preparation of the Reports there has been no change that would disaffirm or materially change any aspect of the Reports.

 

(ll)            Finder’s Fees.  Neither the Company nor any of the Subsidiaries has incurred any liability for any finder’s fees, brokerage commissions or similar payments in connection with the transactions herein contemplated, except as may otherwise exist with respect to Agent pursuant to this Agreement.

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(mm)      Labor Disputes.  No labor disturbance by or dispute with employees of the Company or any of its Subsidiaries exists or, to the knowledge of the Company, is threatened which would reasonably be expected to result in a Material Adverse Effect.

 

(nn)        Investment Company Act.  Neither the Company nor any of the Subsidiaries is or, after giving effect to the offering and sale of the Placement Shares, will be an “investment company” or an entity “controlled” by an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”).

 

(oo)        Operations.  The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions to which the Company or its Subsidiaries are subject, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”), except as would not reasonably be expected to result in a Material Adverse Effect; and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its Subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

 

(pp)        Off-Balance Sheet Arrangements.  There are no transactions, arrangements and other relationships between and/or among the Company, and/or, to the knowledge of the Company, any of its affiliates and any unconsolidated entity, including, but not limited to, any structural finance, special purpose or limited purpose entity (each, an “Off Balance Sheet Transaction”) that could reasonably be expected to affect materially the Company’s liquidity or the availability of or requirements for its capital resources, including those Off Balance Sheet Transactions described in the Commission’s Statement about Management’s Discussion and Analysis of Financial Conditions and Results of Operations (Release Nos.  33‐8056; 34‐45321; FR‐61), required to be described in the Prospectus which have not been described as required.

 

(qq)        Underwriter Agreements.  The Company is not a party to any agreement with an agent or underwriter for any other “at-the-market” or continuous equity transaction.

 

(rr)           ERISA.  To the knowledge of the Company, each material employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), that is maintained, administered or contributed to by the Company or any of its affiliates for employees or former employees of the Company and any of its Subsidiaries has been maintained in material compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Internal Revenue Code of 1986, as amended (the “Code”); no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred which would result in a material liability to the Company with respect to any such plan excluding transactions effected pursuant to a statutory or administrative exemption; and for each such plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, no “accumulated funding deficiency” as defined in Section 412 of the Code has been incurred, whether or not waived, and the fair market value of the assets of each such plan (excluding for these purposes accrued but unpaid contributions) exceeds the present value of all benefits accrued under such plan determined using reasonable actuarial assumptions.

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(ss)         Forward Looking Statements.  No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) (a “Forward Looking Statement”) contained in the Registration Statement and the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.  The Forward Looking Statements incorporated by reference in the Registration Statement and the Prospectus from the Company’s Annual Report on Form 10‐K for the fiscal year most recently ended (i) are within the coverage of the safe harbor for forward looking statements set forth in Section 27A of the Securities Act, Rule 175(b) under the Securities Act or Rule 3b-6 under the Exchange Act, as applicable, (ii) were made by the Company with a reasonable basis and in good faith and reflect the Company’s good faith commercially reasonable best estimate of the matters described therein, and (iii) have been prepared in accordance with Item 10 of Regulation S‐K under the Securities Act.

 

(tt)           Agent Purchases.  The Company acknowledges and agrees that Agent has informed the Company that the Agent may, to the extent permitted under the Securities Act and the Exchange Act, purchase and sell Common Stock for its own account while this Agreement is in effect, provided, that (i) no such purchase or sales shall take place while a Placement Notice is in effect (except to the extent each Agent may engage in sales of Placement Shares purchased or deemed purchased from the Company as a “riskless principal” or in a similar capacity) and (ii) the Company shall not be deemed to have authorized or consented to any such purchases or sales by the Agent.

 

(uu)        Margin Rules.  Neither the issuance, sale and delivery of the Placement Shares nor the application of the proceeds thereof by the Company as described in the Registration Statement and the Prospectus will violate Regulation T, U or X of the Board of Governors of the Federal Reserve System or any other regulation of such Board of Governors.

 

(vv)        Insurance.  The Company and each of its Subsidiaries carry, or are covered by, insurance in such amounts and covering such risks as the Company and each of its Subsidiaries reasonably believe are adequate for the conduct of their properties and as is customary for companies engaged in similar businesses in similar industries.

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(ww)       No Improper Practices.  (i) Neither the Company nor, to the Company’s knowledge, the Subsidiaries, nor to the Company’s knowledge, any of their respective executive officers has, in the past five years, made any unlawful contributions to any candidate for any political office (or failed fully to disclose any contribution in violation of law) or made any contribution or other payment to any official of, or candidate for, any federal, state, municipal, or foreign office or other person charged with similar public or quasi-public duty in violation of any law or of the character required to be disclosed in the Prospectus; (ii) no relationship, direct or indirect, exists between or among the Company or, to the Company’s knowledge, any Subsidiary or any affiliate of any of them, on the one hand, and the directors, officers and stockholders of the Company or, to the Company’s knowledge, any Subsidiary, on the other hand, that is required by the Securities Act to be described in the Registration Statement and the Prospectus that is not so described; (iii) no relationship, direct or indirect, exists between or among the Company or any Subsidiary or any affiliate of them, on the one hand, and the directors, officers, or stockholders of the Company or, to the Company’s knowledge, any Subsidiary, on the other hand, that is required by the rules of FINRA to be described in the Registration Statement and the Prospectus that is not so described; (iv) except as described in the Registration Statement and the Prospectus, there are no material outstanding loans or advances or material guarantees of indebtedness by the Company or, to the Company’s knowledge, any Subsidiary to or for the benefit of any of their respective officers or directors or any of the members of the families of any of them; and (v) the Company has not offered, or caused any placement agent to offer, Common Stock to any person with the intent to influence unlawfully (A) a customer or supplier of the Company or any Subsidiary to alter the customer’s or supplier’s level or type of business with the Company or any Subsidiary or (B) a trade journalist or publication to write or publish favorable information about the Company or any Subsidiary or any of their respective products or services, and, (vi) neither the Company nor any Subsidiary nor, to the Company’s knowledge, any employee or agent of the Company or any Subsidiary has made any payment of funds of the Company or any Subsidiary or received or retained any funds in violation of any law, rule or regulation (including, without limitation, the Foreign Corrupt Practices Act of 1977), which payment, receipt or retention of funds is of a character required to be disclosed in the Registration Statement or the Prospectus.

 

(xx)           Status Under the Securities Act.  The Company was not and is not an ineligible issuer as defined in Rule 405 under the Securities Act at the times specified in Rules 164 and 433 under the Securities Act in connection with the offering of the Placement Shares.

 

(yy)         No Misstatement or Omission in an Issuer Free Writing Prospectus. Each Issuer Free Writing Prospectus, as of its issue date and as of each Applicable Time (as defined in Section 24 below), did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement or the Prospectus, including any incorporated document deemed to be a part thereof that has not been superseded or modified.  The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus based upon and in conformity with written information furnished to the Company by the Agent specifically for use therein.

 

(zz)           No Conflicts.  Neither the execution of this Agreement, nor the issuance, offering or sale of the Placement Shares, nor the consummation of any of the transactions contemplated herein and therein, nor the compliance by the Company with the terms and provisions hereof and thereof will conflict with, or will result in a breach of, any of the terms and provisions of, or has constituted or will constitute a default under, or has resulted in or will result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant to the terms of any contract or other agreement to which the Company may be bound or to which any of the property or assets of the Company is subject, except (i) such conflicts, breaches or defaults as may have been waived and (ii) such conflicts, breaches and defaults that would not have a Material Adverse Effect; nor will such action result (x) in any violation of the provisions of the organizational or governing documents of the Company, or (y) in any material violation of the provisions of any statute or any order, rule or regulation applicable to the Company or of any court or of any federal, state or other regulatory authority or other government body having jurisdiction over the Company.

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(aaa)      Sanctions.  (i) The Company represents that, neither the Company nor any of its Subsidiaries (collectively, the “Entity”) or any director, officer, employee, agent, affiliate or representative of the Entity, is a government, individual, or entity (in this paragraph (uu), “Person”) that is, or is owned or controlled by a Person that is:

 

 (A)  the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control, the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”), nor

 

 (B)  located, organized or resident in a country or territory that is the subject of Sanctions (including, without limitation, Burma/Myanmar, Cuba, Iran, North Korea, Sudan and Syria).

 

(ii)  The Entity represents and covenants that it will not, directly or indirectly, use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person:

 

 (A)  to fund or facilitate any activities or business of or with any Person or in any country or territory that, at the time of such funding or facilitation, is the subject of Sanctions; or

 

 (B)  in any other manner that will result in a violation of Sanctions by any Person (including any Person participating in the offering, whether as underwriter, advisor, investor or otherwise).

 

(iii)  The Entity represents and covenants that, except as detailed in the Registration Statement and the Prospectus, for the past 5 years, it has not knowingly engaged in, is not now knowingly engaged in, and will not engage in, any dealings or transactions with any Person, or in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions.

 

(bbb)     Stock Transfer Taxes.  On each Settlement Date, all stock transfer or other taxes (other than income taxes) which are required to be paid in connection with the sale and transfer of the Placement Shares to be sold hereunder will be, or will have been, fully paid or provided for by the Company and all laws imposing such taxes will be or will have been fully complied with.

 

(ccc)      Natural Resource Properties and Surface Rights. All material interests in natural resource properties and surface rights for exploration and exploitation, as applicable, overlying those properties of the Company or the Subsidiaries are completely and accurately described in the Registration Statement and the Prospectus and, except as set out in the in the Registration Statement or the Prospectus: are owned or held by the Company or such Subsidiaries as owner thereof with good title; are in good standing; and are valid and enforceable and free and clear of any liens, charges or encumbrances and no royalty is payable in respect of any of them.  Except as set out in the Registration Statement and Prospectus, no other material property rights are necessary for the conduct of the Company’s or the Subsidiaries’ businesses as they are currently being conducted, and there are no material restrictions on the ability of the Company or the Subsidiaries to use or otherwise exploit any such property rights, and the Company does not know of any claim or basis for a claim that may adversely affect such rights in any material respects.

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(ddd)    Compliance with Laws.  The Company has not been advised, and has no reason to believe, that it and each of its subsidiaries are not conducting business in compliance with all applicable laws, rules and regulations of the jurisdictions in which it is conducting business, except where failure to be so in compliance would not result in a Material Adverse Effect.

 

Any certificate signed by an officer of the Company and delivered to the Agent or to counsel for the Agent pursuant to or in connection with this Agreement shall be deemed to be a representation and warranty by the Company, as applicable, to the Agent as to the matters set forth therein.

 

7.             Covenants of the Company.  The Company covenants and agrees with Agent that:

 

(a)            Registration Statement Amendments.  After the date of this Agreement and during any period in which a Prospectus relating to any Placement Shares is required to be delivered by Agent under the Securities Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), (i) the Company will notify the Agent promptly of the time when any subsequent amendment to the Registration Statement, other than documents incorporated by reference, has been filed with the Commission and/or has become effective or any subsequent supplement to the Prospectus has been filed and of any request by the Commission for any amendment or supplement to the Registration Statement or Prospectus or for additional information, (ii) the Company will prepare and file with the Commission, promptly upon the Agent’s request, any amendments or supplements to the Registration Statement or Prospectus that, in such Agent’s reasonable opinion, may be necessary or advisable in connection with the distribution of the Placement Shares by the Agent (provided, however, that the failure of the Agent to make such request shall not relieve the Company of any obligation or liability hereunder, or affect the Agent’s right to rely on the representations and warranties made by the Company in this Agreement and provided, further, that the only remedy the Agent shall have with respect to the failure to make such filing shall be to cease making sales under this Agreement until such amendment or supplement is filed); (iii) the Company will not file any amendment or supplement to the Registration Statement or Prospectus relating to the Placement Shares or a security convertible into the Placement Shares unless a copy thereof has been submitted to Agent within a reasonable period of time before the filing and the Agent has not objected thereto (provided, however, that the failure of the Agent to make such objection shall not relieve the Company of any obligation or liability hereunder, or affect the Agent’s right to rely on the representations and warranties made by the Company in this Agreement and provided, further, that the only remedy Agent shall have with respect to the failure by the Company to obtain such consent shall be to cease making sales under this Agreement) and the Company will furnish to the Agent at the time of filing thereof a copy of any document that upon filing is deemed to be incorporated by reference into the Registration Statement or Prospectus, except for those documents available via EDGAR; and (iv) the Company will cause each amendment or supplement to the Prospectus to be filed with the Commission as required pursuant to the applicable paragraph of Rule 424(b) of the Securities Act or, in the case of any document to be incorporated therein by reference, to be filed with the Commission as required pursuant to the Exchange Act, within the time period prescribed (the determination to file or not file any amendment or supplement with the Commission under this Section 7(a), based on the Company’s reasonable opinion or reasonable objections, shall be made exclusively by the Company).

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(b)            Notice of Commission Stop Orders.  The Company will advise the Agent, promptly after it receives notice or obtains knowledge thereof, of the issuance or threatened issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, of the suspension of the qualification of the Placement Shares for offering or sale in any jurisdiction, or of the initiation or threatening of any proceeding for any such purpose; and it will promptly use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal if such a stop order should be issued.  The Company will advise the Agent promptly after it receives any request by the Commission for any amendments to the Registration Statement or any amendment or supplements to the Prospectus or any Issuer Free Writing Prospectus or for additional information related to the offering of the Placement Shares or for additional information related to the Registration Statement, the Prospectus or any Issuer Free Writing Prospectus.

 

(c)            Delivery of Prospectus; Subsequent Changes.  During any period in which a Prospectus relating to the Placement Shares is required to be delivered by the Agent under the Securities Act with respect to the offer and sale of the Placement Shares, (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), the Company will comply with all requirements imposed upon it by the Securities Act, as from time to time in force, and to file on or before their respective due dates all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14, 15(d) or any other provision of or under the Exchange Act.  If the Company has omitted any information from the Registration Statement pursuant to Rule 430B under the Securities Act, it will use its best efforts to comply with the provisions of and make all requisite filings with the Commission pursuant to said Rule 430B and to notify the Agent promptly of all such filings.  If during such period any event occurs as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances then existing, not misleading, or if during such period it is necessary to amend or supplement the Registration Statement or Prospectus to comply with the Securities Act, the Company will promptly notify Agent to suspend the offering of Placement Shares during such period and the Company will promptly amend or supplement the Registration Statement or Prospectus (at the expense of the Company) so as to correct such statement or omission or effect such compliance.

 

(d)            Listing of Placement Shares.  During any period in which the Prospectus relating to the Placement Shares is required to be delivered by the Agent under the Securities Act with respect to the offer and sale of the Placement Shares, the Company will use its reasonable best efforts to cause the Placement Shares to be listed on the Exchange.

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(e)            Delivery of Registration Statement and Prospectus.  The Company will furnish to the Agent and its counsel (at the expense of the Company) copies of the Registration Statement, the Prospectus (including all documents incorporated by reference therein) and all amendments and supplements to the Registration Statement or Prospectus that are filed with the Commission during any period in which a Prospectus relating to the Placement Shares is required to be delivered under the Securities Act (including all documents filed with the Commission during such period that are deemed to be incorporated by reference therein), in each case as soon as reasonably practicable and in such quantities as the Agent may from time to time reasonably request and, at the Agent’s request, will also furnish copies of the Prospectus to each exchange or market on which sales of the Placement Shares may be made; provided, however, that the Company shall not be required to furnish any document (other than the Prospectus) to the Agent to the extent such document is available on EDGAR.

 

(f)            Earnings Statement.  The Company will make generally available to its security holders as soon as practicable, but in any event not later than 15 months after the end of the Company’s current fiscal quarter, an earnings statement covering a 12-month period that satisfies the provisions of Section 11(a) and Rule 158 of the Securities Act.

 

(g)            Use of Proceeds.  The Company will use the Net Proceeds as described in the Prospectus in the section entitled “Use of Proceeds.”

 

(h)            Notice of Other Sales.  Without the prior written consent of Agent, the Company will not, directly or indirectly, offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of any Common Stock (other than the Placement Shares offered pursuant to this Agreement) or securities convertible into or exchangeable for Common Stock, warrants or any rights to purchase or acquire, Common Stock during the period beginning on the fifth (5th) Trading Day immediately prior to the date on which any Placement Notice is delivered to Agent hereunder and ending on the fifth (5th) Trading Day immediately following the final Settlement Date with respect to Placement Shares sold pursuant to such Placement Notice (or, if the Placement Notice has been terminated or suspended prior to the sale of all Placement Shares covered by a Placement Notice, the date of such suspension or termination); and during the term of this Agreement will not directly or indirectly in any other “at-the-market” or continuous equity transaction offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of any Common Stock (other than the Placement Shares offered pursuant to this Agreement) or securities convertible into or exchangeable for Common Stock, warrants or any rights to purchase or acquire, Common Stock; provided, however, that such restrictions will not be required in connection with the Company’s issuance or sale of (i) Common Stock, options to purchase Common Stock or Common Stock issuable upon the exercise of options, pursuant to any employee or director stock option or benefits plan, stock ownership plan or dividend reinvestment plan (but not Common Stock subject to a waiver to exceed plan limits in its dividend reinvestment plan) of the Company whether now in effect or hereafter implemented, (ii) Common Stock issuable upon conversion of securities or the exercise of warrants, options or other rights in effect or outstanding, and disclosed in filings by the Company available on EDGAR or otherwise in writing to the Agent and (iii) Common Stock or securities convertible into or exchangeable for shares of Common Stock as consideration for mergers, acquisitions, other business combinations or strategic alliances occurring after the date of this Agreement which are not issued for capital raising purposes.

 

(i)            Change of Circumstances.  The Company will, at any time during the pendency of a Placement Notice advise the Agent promptly after it shall have received notice or obtained knowledge thereof, of any information or fact that would alter or affect in any material respect any opinion, certificate, letter or other document required to be provided to the Agent pursuant to this Agreement.

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(j)            Due Diligence Cooperation.  The Company will cooperate with any reasonable due diligence review conducted by the Agent or its representatives in connection with the transactions contemplated hereby, including, without limitation, providing information and making available documents and senior corporate officers, during regular business hours and at the Company’s principal offices, as the Agent may reasonably request.

 

(k)            Required Filings Relating to Placement of Placement Shares.  The Company agrees that on such dates as the Securities Act shall require, the Company will (i) file a prospectus supplement with the Commission under the applicable paragraph of Rule 424(b) under the Securities Act (each and every filing date under Rule 424(b), a “Filing Date”), which prospectus supplement will set forth, within the relevant period, the amount of Placement Shares sold through the Agent, the Net Proceeds to the Company and the compensation payable by the Company to the Agent with respect to such Placement Shares, and (ii) deliver such number of copies of each such prospectus supplement to each exchange or market on which such sales were effected as may be required by the rules or regulations of such exchange or market.

 

(l)            Representation Dates; Certificate.  (1) Prior to the date of the first Placement Notice and (2) each time the Company:

 

(i) files the Prospectus relating to the Placement Shares or amends or supplements (other than a prospectus supplement relating solely to an offering of securities other than the Placement Shares) the Registration Statement or the Prospectus relating to the Placement Shares by means of a post-effective amendment, sticker, or supplement but not by means of incorporation of documents by reference into the Registration Statement or the Prospectus relating to the Placement Shares;

 

(ii) files an annual report on Form 10-K under the Exchange Act (including any Form 10-K/A containing amended financial information or a material amendment to the previously filed Form 10-K);

 

(iii) files its quarterly reports on Form 10-Q under the Exchange Act; or

 

(iv) files a current report on Form 8-K containing amended financial information (other than information “furnished” pursuant to Items 2.02 or 7.01 of Form 8-K or to provide disclosure pursuant to Item 8.01 of Form 8-K relating to the reclassification of certain properties as discontinued operations in accordance with Statement of Financial Accounting Standards No. 144) under the Exchange Act (each date of filing of one or more of the documents referred to in clauses (i) through (iv) shall be a “Representation Date”);

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the Company shall furnish the Agent (but in the case of clause (iv) above only if the Agent reasonably determines that the information contained in such Form 8‐K is material) with a certificate, in the form attached hereto as Exhibit 7(l).  The requirement to provide a certificate under this Section 7(l) shall be waived for any Representation Date occurring at a time a Suspension is in effect, which waiver shall continue until the earlier to occur of the date the Company delivers instructions for the sale of Placement Shares hereunder (which for such calendar quarter shall be considered a Representation Date) and the next occurring Representation Date.  Notwithstanding the foregoing, if the Company subsequently decides to sell Placement Shares following a Representation Date when a Suspension was in effect and did not provide the Agent with a certificate under this Section 7(l), then before the Company delivers the instructions for the sale of Placement Shares or the Agent sells any Placement Shares pursuant to such instructions, the Company shall provide the Agent with a certificate in conformity with this Section 7(l) dated as of the date that the instructions for the sale of Placement Shares are issued.

 

(m)            Legal Opinion.  (1) Prior to the date of the first Placement Notice  and (2) within five (5) Trading Days of each Representation Date with respect to which the Company is obligated to deliver a certificate in the form attached hereto as Exhibit 7(l) for which no waiver is applicable and excluding the date of this Agreement, the Company shall cause to be furnished to the Agent a written opinion of LeClairRyan, A Professional Corporation (“Company Counsel”), or other counsel satisfactory to the Agent, in form and substance satisfactory to Agent and its counsel, modified, as necessary, to relate to the Registration Statement and the Prospectus as then amended or supplemented; provided, however, the Company shall be required to furnish to Agent no more than one opinion hereunder per calendar quarter; provided, further, that in lieu of such opinions for subsequent periodic filings under the Exchange Act, counsel may furnish the Agent with a letter (a “Reliance Letter”) to the effect that the Agent may rely on a prior opinion delivered under this Section 7(m) to the same extent as if it were dated the date of such letter (except that statements in such prior opinion shall be deemed to relate to the Registration Statement and the Prospectus as amended or supplemented as of the date of the Reliance Letter).

 

(n)            Comfort Letter.  (1) Prior to the date of the first Placement Notice and (2) within five (5) Trading Days of each Representation Date with respect to which the Company is obligated to deliver a certificate in the form attached hereto as Exhibit 7(l) for which no waiver is applicable and excluding the date of this Agreement, the Company shall cause its independent registered public accounting firm to furnish the Agent letters (the “Comfort Letters”), dated the date the Comfort Letter is delivered, which shall meet the requirements set forth in this Section 7(n); provided, that if requested by the Agent, the Company shall cause a Comfort Letter to be furnished to the Agent within ten (10) Trading Days of the date of occurrence of any material transaction or event, including the restatement of the Company’s financial statements.  The Comfort Letter from the Company’s independent registered public accounting firm shall be in a form and substance satisfactory to the Agent, (i) confirming that they are an independent registered public accounting firm within the meaning of the Securities Act and the PCAOB, (ii) stating, as of such date, the conclusions and findings of such firm with respect to the financial information and other matters ordinarily covered by accountants’ “comfort letters” to underwriters in connection with registered public offerings (the first such letter, the “Initial Comfort Letter”) and (iii) updating the Initial Comfort Letter with any information that would have been included in the Initial Comfort Letter had it been given on such date and modified as necessary to relate to the Registration Statement and the Prospectus, as amended and supplemented to the date of such letter.

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(o)            Market Activities.  The Company will not, directly or indirectly, (i) take any action designed to cause or result in, or that constitutes or might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of Common Stock or (ii) sell, bid for, or purchase Common Stock in violation of Regulation M or any other applicable law, or pay anyone any compensation for soliciting purchases of the Placement Shares other than the Agent.

 

(p)            Investment Company Act.  The Company will conduct its affairs in such a manner so as to reasonably ensure that neither it nor any of its Subsidiaries will be or become, at any time prior to the termination of this Agreement, required to register as an “investment company,” as such term is defined in the Investment Company Act.

 

(q)            No Offer to Sell.  Other than an Issuer Free Writing Prospectus approved in advance by the Company and the Agent in its capacity as agent hereunder, neither the Agent nor the Company (including its agents and representatives, other than the Agent in its capacity as such) will make, use, prepare, authorize, approve or refer to any written communication (as defined in Rule 405 under the Securities Act), required to be filed with the Commission, that constitutes an offer to sell or solicitation of an offer to buy Placement Shares hereunder.

 

(r)            Blue Sky and Other Qualifications. The Company will use its commercially reasonable efforts, in cooperation with the Agent, to qualify the Placement Shares for offering and sale, or to obtain an exemption for the Placement Shares to be offered and sold, under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Agent may designate and to maintain such qualifications and exemptions in effect for so long as required for the distribution of the Placement Shares (but in no event for less than one year from the date of this Agreement); provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject. In each jurisdiction in which the Placement Shares have been so qualified or exempt, the Company will file such statements and reports as may be required by the laws of such jurisdiction to continue such qualification or exemption, as the case may be, in effect for so long as required for the distribution of the Placement Shares (but in no event for less than one year from the date of this Agreement).

 

(s)            Sarbanes-Oxley Act.  The Company and the Subsidiaries will maintain and keep accurate books and records reflecting their assets and maintain internal accounting controls in a manner designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and including those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of the Company’s consolidated financial statements in accordance with generally accepted accounting principles, (iii) that receipts and expenditures of the Company are being made only in accordance with management’s and the Company’s directors’ authorization, and (iv) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on its financial statements.  The Company and the Subsidiaries will maintain such controls and other procedures, including, without limitation, those required by Sections 302 and 906 of the Sarbanes-Oxley Act, and the applicable regulations thereunder that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, including, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure and to ensure that material information relating to the Company or the Subsidiaries is made known to them by others within those entities, particularly during the period in which such periodic reports are being prepared.

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(t)            Secretary’s Certificate; Further Documentation.  Prior to the date of the first Placement Notice, the Company shall deliver to the Agent a certificate of the Secretary of the Company and attested to by an executive officer of the Company, dated as of such date, certifying as to (i) the Certificate of Incorporation of the Company, (ii) the By-laws of the Company, (iii) the resolutions of the Board of Directors of the Company authorizing the execution, delivery and performance of this Agreement and the issuance of the Placement Shares and (iv) the incumbency of the officers duly authorized to execute this Agreement and the other documents contemplated by this Agreement.  Within five (5) Trading Days of each Representation Date, the Company shall have furnished to the Agent such further information, certificates and documents as the Agent may reasonably request.

 

8.            Payment of Expenses.  The Company will pay all expenses incident to the performance of its obligations under this Agreement, including (i) the preparation and filing of the Registration Statement, including any fees required by the Commission, and the printing or electronic delivery of the Prospectus as originally filed and of each amendment and supplement thereto, in such number as the Agent shall deem necessary, (ii) the printing and delivery to the Agent of this Agreement and such other documents as may be required in connection with the offering, purchase, sale, issuance or delivery of the Placement Shares, (iii) the preparation, issuance and delivery of the certificates, if any, for the Placement Shares to the Agent, including any stock or other transfer taxes and any capital duties, stamp duties or other duties or taxes payable upon the sale, issuance or delivery of the Placement Shares to the Agent, (iv) the fees and disbursements of the counsel, accountants and other advisors to the Company, (v) the fees and disbursements of the counsel to the Agent, payable upon the execution of this Agreement, in an amount not to exceed $50,000; (vi) the qualification or exemption of the Placement Shares under state securities laws in accordance with the provisions of Section 7(r) hereof, including filing fees, but excluding fees of the Agent’s counsel, (vii) the printing and delivery to the Agent of copies of any Permitted Issuer Free Writing Prospectus and the Prospectus and any amendments or supplements thereto in such number as the Agent shall deem necessary, (viii) the preparation, printing and delivery to the Agent of copies of the blue sky survey, (ix) the fees and expenses of the transfer agent and registrar for the Common Stock, (x) the filing and other fees incident to any review by FINRA of the terms of the sale of the Placement Shares including the fees of the Agent’s counsel (subject to the cap, set forth in clause (v) above), and (xi) the fees and expenses incurred in connection with the listing of the Placement Shares on the Exchange.

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9.            Conditions to Agent’s Obligations.  The obligations of the Agent hereunder with respect to a Placement will be subject to the continuing accuracy and completeness of the representations and warranties made by the Company herein, to the due performance by the Company of its obligations hereunder, to the completion by the Agent of a due diligence review satisfactory to it in its reasonable judgment, and to the continuing satisfaction (or waiver by the Agent in its sole discretion) of the following additional conditions:

 

(a)            Registration Statement Effective.  The Registration Statement shall have become effective and shall be available for the (i) resale of all Placement Shares issued to the Agent and not yet sold by the Agent and (ii) sale of all Placement Shares contemplated to be issued by any Placement Notice.

 

(b)            No Material Notices.  None of the following events shall have occurred and be continuing: (i) receipt by the Company of any request for additional information from the Commission or any other federal or state governmental authority during the period of effectiveness of the Registration Statement, the response to which would require any post-effective amendments or supplements to the Registration Statement or the Prospectus; (ii) the issuance by the Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (iii) receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Placement Shares for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; or (iv) the occurrence of any event that makes any material statement made in the Registration Statement or the Prospectus or any material document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in the Registration Statement, the Prospectus or documents so that, in the case of the Registration Statement, it will not contain any materially untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and, that in the case of the Prospectus, it will not contain any materially untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

(c)            No Misstatement or Material Omission.  Agent shall not have advised the Company that the Registration Statement or Prospectus, or any amendment or supplement thereto, contains an untrue statement of fact that in the Agent’s reasonable opinion is material, or omits to state a fact that in the Agent’s reasonable opinion is material and is required to be stated therein or is necessary to make the statements therein not misleading.

 

(d)            Material Changes.  Except as contemplated in the Prospectus, or disclosed in the Company’s reports filed with the Commission, there shall not have been any material adverse change in the authorized capital stock of the Company or any Material Adverse Effect or any development that could reasonably be expected to cause a Material Adverse Effect, or a downgrading in or withdrawal of the rating assigned to any of the Company’s securities (other than asset backed securities) by any rating organization or a public announcement by any rating organization that it has under surveillance or review its rating of any of the Company’s securities (other than asset backed securities), the effect of which, in the case of any such action by a rating organization described above, in the reasonable judgment of the Agent (without relieving the Company of any obligation or liability it may otherwise have), is so material as to make it impracticable or inadvisable to proceed with the offering of the Placement Shares on the terms and in the manner contemplated in the Prospectus.

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(e)            Legal Opinion.  The Agent shall have received the opinions of Company Counsel required to be delivered pursuant to Section 7(m) on or before the date on which such delivery of such opinion is required pursuant to Section 7(m).

 

(f)             Comfort Letter.  The Agent shall have received the Comfort Letter required to be delivered pursuant to Section 7(n) on or before the date on which such delivery of such Comfort Letters is required pursuant to Section 7(n).

 

(g)            Representation Certificate.  The Agent shall have received the certificate required to be delivered pursuant to Section 7(l) on or before the date on which delivery of such certificate is required pursuant to Section 7(l).

 

(h)            No Suspension.  Trading in the Common Stock shall not have been suspended on the Exchange and the TSX and the Common Stock shall not have been delisted from the Exchange and the TSX.

 

(i)             Other Materials.  On each date on which the Company is required to deliver a certificate pursuant to Section 7(l), the Company shall have furnished to the Agent such appropriate further information, opinions, certificates, letters and other documents as the Agent may reasonably request.  All such opinions, certificates, letters and other documents will be in compliance with the provisions hereof.

 

(j)             Securities Act Filings Made.  All filings with the Commission required by Rule 424 under the Securities Act to have been filed prior to the issuance of any Placement Notice hereunder shall have been made within the applicable time period prescribed for such filing by Rule 424.

 

(k)            Approval for Listing.  The Placement Shares shall either have been approved for listing on the Exchange, subject only to notice of issuance, or the Company shall have filed an application for listing of the Placement Shares on the Exchange at, or prior to, the issuance of any Placement Notice.

 

(l)             FINRA. If applicable, FINRA shall have raised no objection to the terms of this offering and the amount of compensation allowable or payable to the Agent as described in the Prospectus.

 

(m)           No Termination Event.  There shall not have occurred any event that would permit the Agent to terminate this Agreement pursuant to Section 12(a).

 

10.          Indemnification and Contribution.

 

(a)            Company Indemnification.  The Company agrees to indemnify and hold harmless the Agent, its partners, members, directors, officers, employees and agents and each person, if any, who controls the Agent within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act as follows:

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 (i)            against any and all loss, liability, claim, damage and expense whatsoever, as incurred, joint or several, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, or arising out of any untrue statement or alleged untrue statement of a material fact included in any related Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;

 

 (ii)            against any and all loss, liability, claim, damage and expense whatsoever, as incurred, joint or several, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 10(d) below) any such settlement is effected with the written consent of the Company, which consent shall not unreasonably be delayed or withheld; and

 

 (iii)            against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above,

 

provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made solely in reliance upon and in conformity with written information furnished to the Company by the Agent expressly for use in the Registration Statement (or any amendment thereto), or in any related Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto).

 

(b)            Agent Indemnification.  Agent agrees to indemnify and hold harmless the Company and its directors and each officer and director of the Company who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in Section 10(a), as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendments thereto) or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with information relating to the Agent and furnished to the Company in writing by the Agent expressly for use therein.  The Company hereby acknowledges that the only information that the Agent has furnished to the Company expressly for use in the Registration Statement, the Prospectus or any Issuer Free Writing Prospectus (or any amendment or supplement thereto) are the statements set forth in the seventh and eighth paragraphs under the caption “Plan of Distribution” in the Prospectus.

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(c)            Procedure.  Any party that proposes to assert the right to be indemnified under this Section 10 will, promptly after receipt of notice of commencement of any action against such party in respect of which a claim is to be made against an indemnifying party or parties under this Section 10, notify each such indemnifying party of the commencement of such action, enclosing a copy of all papers served, but the omission so to notify such indemnifying party will not relieve the indemnifying party from (i) any liability that it might have to any indemnified party otherwise than under this Section 10 and (ii) any liability that it may have to any indemnified party under the foregoing provision of this Section 10 unless, and only to the extent that, such omission results in the forfeiture of substantive rights or defenses by the indemnifying party.  If any such action is brought against any indemnified party and it notifies the indemnifying party of its commencement, the indemnifying party will be entitled to participate in and, to the extent that it elects by delivering written notice to the indemnified party promptly after receiving notice of the commencement of the action from the indemnified party, jointly with any other indemnifying party similarly notified, to assume the defense of the action, with counsel reasonably satisfactory to the indemnified party, and after notice from the indemnifying party to the indemnified party of its election to assume the defense, the indemnifying party will not be liable to the indemnified party for any legal or other expenses except as provided below and except for the reasonable costs of investigation subsequently incurred by the indemnified party in connection with the defense.  The indemnified party will have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel will be at the expense of such indemnified party unless (1) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying party, (2) the indemnified party has reasonably concluded (based on advice of counsel) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (3) a conflict or potential conflict exists (based on advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party) or (4) the indemnifying party has not in fact employed counsel to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable fees, disbursements and other charges of counsel will be at the expense of the indemnifying party or parties.  It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one separate firm admitted to practice in such jurisdiction at any one time for all such indemnified party or parties.  All such fees, disbursements and other charges will be reimbursed by the indemnifying party promptly after the indemnifying party receives a written invoice relating to fees, disbursements and other charges in reasonable detail.  An indemnifying party will not, in any event, be liable for any settlement of any action or claim effected without its written consent.  No indemnifying party shall, without the prior written consent of each indemnified party, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated by this Section 10 (whether or not any indemnified party is a party thereto), unless such settlement, compromise or consent (1) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (2) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

-31-

(d)            Settlement Without Consent if Failure to Reimburse. If an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for reasonable fees and expenses of counsel for which it is entitled to be reimbursed under this Section 10, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 10(a)(ii) effected without its written consent if (1) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (2) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (3) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.

 

(e)            Contribution.  In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in the foregoing paragraphs of this Section 10 is applicable in accordance with its terms but for any reason is held to be unavailable from the Company or the Agent, the Company and the Agent will contribute to the total losses, claims, liabilities, expenses and damages (including any investigative, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted, but after deducting any contribution received by the Company from persons other than the Agent, such as persons who control the Company within the meaning of the Securities Act, officers of the Company who signed the Registration Statement and directors of the Company, who also may be liable for contribution) to which the Company and the Agent may be subject in such proportion as shall be appropriate to reflect the relative benefits received by the Company on the one hand and the Agent on the other hand.  The relative benefits received by the Company on the one hand and the Agent on the other hand shall be deemed to be in the same proportion as the total net proceeds from the sale of the Placement Shares (before deducting expenses) received by the Company bear to the total compensation received by the Agent (before deducting expenses) from the sale of Placement Shares on behalf of the Company.  If, but only if, the allocation provided by the foregoing sentence is not permitted by applicable law, the allocation of contribution shall be made in such proportion as is appropriate to reflect not only the relative benefits referred to in the foregoing sentence but also the relative fault of the Company, on the one hand, and the Agent, on the other hand, with respect to the statements or omission that resulted in such loss, claim, liability, expense or damage, or action in respect thereof, as well as any other relevant equitable considerations with respect to such offering.  Such relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Agent, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission.  The Company and the Agent agree that it would not be just and equitable if contributions pursuant to this Section 10(e) were to be determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to herein.  The amount paid or payable by an indemnified party as a result of the loss, claim, liability, expense, or damage, or action in respect thereof, referred to above in this Section 10(e) shall be deemed to include, for the purpose of this Section 10(e), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim to the extent consistent with Section 10(c) hereof.  Notwithstanding the foregoing provisions of this Section 10(e), the Agent shall not be required to contribute any amount in excess of the commissions received by it under this Agreement and no person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.  For purposes of this Section 10(e), any person who controls a party to this Agreement within the meaning of the Securities Act, and any officers, directors, partners, employees or agents of the Agent, will have the same rights to contribution as that party, and each officer and director of the Company who signed the Registration Statement will have the same rights to contribution as the Company, subject in each case to the provisions hereof.  Any party entitled to contribution, promptly after receipt of notice of commencement of any action against such party in respect of which a claim for contribution may be made under this Section 10(e), will notify any such party or parties from whom contribution may be sought, but the omission to so notify will not relieve that party or parties from whom contribution may be sought from any other obligation it or they may have under this Section 10(e) except to the extent that the failure to so notify such other party materially prejudiced the substantive rights or defenses of the party from whom contribution is sought.  Except for a settlement entered into pursuant to the last sentence of Section 10(c) hereof, no party will be liable for contribution with respect to any action or claim settled without its written consent if such consent is required pursuant to Section 10(c) hereof.

-32-

11.          Representations and Agreements to Survive Delivery.  The indemnity and contribution agreements contained in Section 10 of this Agreement and all representations and warranties of the Company herein or in certificates delivered pursuant hereto shall survive, as of their respective dates, regardless of (i) any investigation made by or on behalf of the Agent, any controlling persons, or the Company (or any of their respective officers, directors or controlling persons), (ii) delivery and acceptance of the Placement Shares and payment therefor or (iii) any termination of this Agreement.

 

12.          Termination.

 

(a)            The Agent may terminate this Agreement, by notice to the Company, as hereinafter specified at any time (1) if there has been, since the time of execution of this Agreement or since the date as of which information is given in the Prospectus, any change, or any development or event involving a prospective change, in the condition, financial or otherwise, or in the business, properties, earnings, results of operations or prospects of the Company and its Subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, which individually or in the aggregate, in the sole judgment of the Agent is material and adverse and makes it impractical or inadvisable to market the Placement Shares or to enforce contracts for the sale of the Placement Shares, (2) if there has occurred any material adverse change in the financial markets in the United States or the international financial markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Agent, impracticable or inadvisable to market the Placement Shares or to enforce contracts for the sale of the Placement Shares, (3) if trading in the Common Stock has been suspended or limited by the Commission or the Exchange, or if trading generally on the Exchange or the TSX has been suspended or limited, or minimum prices for trading have been fixed on the Exchange or the TSX, (4) if any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market shall have occurred and be continuing, (5) if a major disruption of securities settlements or clearance services in the United States shall have occurred and be continuing, or (6) if a banking moratorium has been declared by either U.S. Federal or New York authorities.  Any such termination shall be without liability of any party to any other party except that the provisions of Section 8 (Payment of Expenses), Section 10 (Indemnification and Contribution), Section 11 (Representations and Agreements to Survive Delivery), Section 17 (Governing Law and Time; Waiver of Jury Trial) and Section 18 (Consent to Jurisdiction) hereof shall remain in full force and effect notwithstanding such termination.  If the Agent elects to terminate this Agreement as provided in this Section 12(a), the Agent shall provide the required notice as specified in Section 13 (Notices).

-33-

(b)            The Company shall have the right, by giving ten (10) days notice as hereinafter specified, to terminate this Agreement in its sole discretion at any time after the date of this Agreement.  Any such termination shall be without liability of any party to any other party except that the provisions of Section 8, Section 10, Section 11, Section 17 and Section 18 hereof shall remain in full force and effect notwithstanding such termination.

 

(c)            The Agent shall have the right, by giving ten (10) days notice as hereinafter specified, to terminate this Agreement in its sole discretion at any time after the date of this Agreement.  Any such termination shall be without liability of any party to any other party except that the provisions of Section 8, Section 10, Section 11, Section 17 and Section 18 hereof shall remain in full force and effect notwithstanding such termination.

 

(d)            Unless earlier terminated pursuant to this Section 12, this Agreement shall automatically terminate upon the issuance and sale of all of the Placement Shares through the Agent on the terms and subject to the conditions set forth herein; provided that the provisions of Section 8, Section 10, Section 11, Section 17 and Section 18 hereof shall remain in full force and effect notwithstanding such termination.

 

(e)            This Agreement shall remain in full force and effect unless terminated pursuant to Sections 12(a), (b), (c), or (d) above or otherwise by mutual agreement of the parties; provided, however, that any such termination by mutual agreement shall in all cases be deemed to provide that Section 8, Section 10, Section 11, Section 17 and Section 18 shall remain in full force and effect. Upon termination of this Agreement in accordance with its terms, the Company shall not have any liability to Agent for any discount, commission or other compensation with respect to any Placement Shares not otherwise sold by Agent under this Agreement.

 

(f)            Any termination of this Agreement shall be effective on the date specified in such notice of termination; provided, however, that such termination shall not be effective until the close of business on the date of receipt of such notice by the Agent or the Company, as the case may be.  If such termination shall occur prior to the Settlement Date for any sale of Placement Shares, such Placement Shares shall settle in accordance with the provisions of this Agreement.

-34-

13.          Notices.  All notices or other communications required or permitted to be given by any party to any other party pursuant to the terms of this Agreement shall be in writing, unless otherwise specified, and if sent to the Agent, shall be delivered to:

 

	
 

	
Cantor Fitzgerald & Co.

	
 

	
499 Park Avenue

	
 

	
New York, NY 10022

	
 

	
Attention:

	
Capital Markets/Jeff Lumby

	
 

	
Facsimile:

	
(212) 307-3730

	
 

	
 

	
 

	
with copies to

	
 

	
 

	
 

	
 

	
 

	
Cantor Fitzgerald & Co.

	
 

	
499 Park Avenue

	
 

	
New York, NY 10022

	
 

	
Attention:

	
Stephen Merkel

	
 

	
 

	
General Counsel

	
 

	
Facsimile:

	
(212) 307-3730

	
 

	
 

	
 

	
and with a copy to:

	
 

	
 

	
 

	
 

	
 

	
Reed Smith LLP

	
 

	
599 Lexington Avenue

	
 

	
New York, NY 10022

	
 

	
Attention:

	
Daniel I. Goldberg, Esq.

	
 

	
Facsimile:

	
(212) 521-5450

	 		
	
and if to the Company, shall be delivered to:

	 	
	
 

	
Paramount Gold and Silver Corp.

		
665 Anderson Street

		
Winnemucca, NV 89445

		
Attention:

	
Carlo Buffone

	
 

	
Email:

	
carlo@paramountgold.com

	 	
	
with a copy to:

	
 

	 		
	
 

	
LeClairRyan, A Professional Corporation

	
 

	
One Riverfront Plaza

	
 

	
1037 Raymond Boulevard, Sixteenth Floor

	
 

	
Newark, New Jersey 07102

	
 

	
Attention:

	
James T. Seery

	
 

	
Email:

	
james.seery@leclairryan.com

-35-

Each party to this Agreement may change such address for notices by sending to the parties to this Agreement written notice of a new address for such purpose.  Each such notice or other communication shall be deemed given (i) when delivered personally or by verifiable facsimile transmission (with an original to follow) on or before 4:30 p.m., New York City time, on a Business Day or, if such day is not a Business Day, on the next succeeding Business Day, (ii) on the next Business Day after timely delivery to a nationally-recognized overnight courier and (iii) on the Business Day actually received if deposited in the U.S. mail (certified or registered mail, return receipt requested, postage prepaid).  For purposes of this Agreement, “Business Day” shall mean any day on which the Exchange and commercial banks in the City of New York are open for business.

 

An electronic communication (“Electronic Notice”) shall be deemed written notice for purposes of this Section 13 if sent to the electronic mail address specified by the receiving party under separate cover.  Electronic Notice shall be deemed received at the time the party sending Electronic Notice receives verification of receipt by the receiving party.  Any party receiving Electronic Notice may request and shall be entitled to receive the notice on paper, in a nonelectronic form (“Nonelectronic Notice”) which shall be sent to the requesting party within ten (10) days of receipt of the written request for Nonelectronic Notice.

 

14.          Successors and Assigns.  This Agreement shall inure to the benefit of and be binding upon the Company and the Agent and their respective successors and the affiliates, controlling persons, officers and directors referred to in Section 10 hereof.  References to any of the parties contained in this Agreement shall be deemed to include the successors and permitted assigns of such party.  Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.  Neither party may assign its rights or obligations under this Agreement without the prior written consent of the other party; provided, however, that the Agent may assign its rights and obligations hereunder to an affiliate thereof without obtaining the Company’s consent.

 

15.          Adjustments for Stock Splits.  The parties acknowledge and agree that all share-related numbers contained in this Agreement shall be adjusted to take into account any stock split, stock dividend or similar event effected with respect to the Placement Shares.

 

16.          Entire Agreement; Amendment; Severability.  This Agreement (including all schedules and exhibits attached hereto and Placement Notices issued pursuant hereto) together with the side letter dated April 11, 2014 constitutes the entire agreement and supersedes all other prior and contemporaneous agreements and undertakings, both written and oral, among the parties hereto with regard to the subject matter hereof.  Neither this Agreement nor any term hereof may be amended except pursuant to a written instrument executed by the Company and the Agent.  In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable as written by a court of competent jurisdiction, then such provision shall be given full force and effect to the fullest possible extent that it is valid, legal and enforceable, and the remainder of the terms and provisions herein shall be construed as if such invalid, illegal or unenforceable term or provision was not contained herein, but only to the extent that giving effect to such provision and the remainder of the terms and provisions hereof shall be in accordance with the intent of the parties as reflected in this Agreement.

-36-

17.         GOVERNING LAW AND TIME; WAIVER OF JURY TRIAL.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME. EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

18.          CONSENT TO JURISDICTION. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH ANY TRANSACTION CONTEMPLATED HEREBY, AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER.  EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF (CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF.  NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.

 

19.          Use of Information.          The Agent may not provide any information gained in connection with this Agreement and the transactions contemplated by this Agreement, including due diligence, to any third party other than its legal counsel advising it on this Agreement unless expressly approved by the Company in writing.

 

20.          Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  Delivery of an executed Agreement by one party to the other may be made by facsimile transmission.

 

21.          Effect of Headings.

 

The section and exhibit headings herein are for convenience only and shall not affect the construction hereof.

-37-

22.          Permitted Free Writing Prospectuses.

 

The Company represents, warrants and agrees that, unless it obtains the prior consent of the Agent, and the Agent represents, warrants and agrees that, unless it obtains the prior consent of the Company, it has not made and will not make any offer relating to the Placement Shares that would constitute an Issuer Free Writing Prospectus, or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405, required to be filed with the Commission.  Any such free writing prospectus consented to by the Agent or by the Company, as the case may be, is hereinafter referred to as a “Permitted Free Writing Prospectus.”  The Company represents and warrants that it has treated and agrees that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and has complied and will comply with the requirements of Rule 433 applicable to any Permitted Free Writing Prospectus, including timely filing with the Commission where required, legending and record keeping.  For the purposes of clarity, the parties hereto agree that all free writing prospectuses, if any, listed in Exhibit 22 hereto are Permitted Free Writing Prospectuses.

 

23.          Absence of Fiduciary Relationship.

 

The Company acknowledges and agrees that:

 

(a)            the Agent is acting solely as agent in connection with the public offering of the Placement Shares and in connection with each transaction contemplated by this Agreement and the process leading to such transactions, and no fiduciary or advisory relationship between the Company or any of its respective affiliates, stockholders (or other equity holders), creditors or employees or any other party, on the one hand, and the Agent, on the other hand, has been or will be created in respect of any of the transactions contemplated by this Agreement, irrespective of whether or not the Agent has advised or is advising the Company on other matters, and the Agent has no obligation to the Company with respect to the transactions contemplated by this Agreement except the obligations expressly set forth in this Agreement;

 

(b)            it is capable of evaluating and understanding, and understands and accepts, the terms, risks and conditions of the transactions contemplated by this Agreement;

 

(c)            the Agent has not provided any legal, accounting, regulatory or tax advice with respect to the transactions contemplated by this Agreement and it has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate;

 

(d)            it is aware that the Agent and its affiliates are engaged in a broad range of transactions which may involve interests that differ from those of the Company and the Agent has no obligation to disclose such interests and transactions to the Company by virtue of any fiduciary, advisory or agency relationship or otherwise; and

 

(e)            it waives, to the fullest extent permitted by law, any claims it may have against the Agent for breach of fiduciary duty or alleged breach of fiduciary duty in connection with the sale of Placement Shares under this Agreement and agrees that the Agent shall not have any liability (whether direct or indirect, in contract, tort or otherwise) to it in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on its behalf or in right of it or the Company, employees or creditors of Company, other than in respect of the Agent’s obligations under this Agreement and to keep information provided by the Company to the Agent and the Agent's counsel confidential to the extent not otherwise publicly-available.

-38-

24.            Definitions.

 

As used in this Agreement, the following terms have the respective meanings set forth below:

 

“Applicable Time” means (i) each Representation Date and (ii) the time of each sale of any Placement Shares pursuant to this Agreement.

 

“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433, relating to the Placement Shares that (1) is required to be filed with the Commission by the Company, (2) is a “road show” that is a “written communication” within the meaning of Rule 433(d)(8)(i) whether or not required to be filed with the Commission, or (3) is exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description of the Placement Shares or of the offering that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g) under the Securities Act Regulations.

 

 “Rule 164,” “Rule 172,” “Rule 405,” “Rule 415,” “Rule 424,” “Rule 424(b),” “Rule 430B,” and “Rule 433” refer to such rules under the Securities Act Regulations.

 

All references in this Agreement to financial statements and schedules and other information that is “contained,” “included” or “stated” in the Registration Statement or the Prospectus (and all other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information that is incorporated by reference in the Registration Statement or the Prospectus, as the case may be.

 

All references in this Agreement to the Registration Statement, the Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to EDGAR; all references in this Agreement to any Issuer Free Writing Prospectus (other than any Issuer Free Writing Prospectuses that, pursuant to Rule 433, are not required to be filed with the Commission) shall be deemed to include the copy thereof filed with the Commission pursuant to EDGAR; and all references in this Agreement to “supplements” to the Prospectus shall include, without limitation, any supplements, “wrappers” or similar materials prepared in connection with any offering, sale or private placement of any Placement Shares by the Agent outside of the United States.

 

[Signature Page Follows]

-39-

If the foregoing correctly sets forth the understanding between the Company and the Agent, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement between the Company and the Agent.

 

	 	
Very truly yours,

	 	
		
PARAMOUNT GOLD AND SILVER CORP.

		
 

		
By:

	
/s/ Carlo Buffone

		
 

	
Name: Carlo Buffone

		
 

	
Title: Chief Financial Officer

		
ACCEPTED as of the date first-above written:

 

		
CANTOR FITZGERALD & CO.

		
 

		
By:

	
/s/ Jeffrey Lumby

		
 

	
Name:  Jeffrey Lumby

		
 

	
Title:  Senior Managing Director

 

[SIGNATURE PAGE]

 PARAMOUNT GOLD AND SILVER CORP. – SALES AGREEMENT

SCHEDULE 1

 

 

FORM OF PLACEMENT NOTICE

 

 

	 	
From:

	
Paramount Gold and Silver Corp.

	 	
To:

	
Cantor Fitzgerald & Co.

Attention:  _____________________

	 	
Subject:

	
Placement Notice

Gentlemen:

 

Pursuant to the terms and subject to the conditions contained in the Sales Agreement between Paramount Gold and Silver Corp., a Delaware corporation (the “Company”), and Cantor Fitzgerald & Co. (“Agent”), dated April 11, 2014, the Company hereby requests that the Agent sell up to ____________ of the Company’s Common Stock, par value $0.001 per share, at a minimum market price of $_______ per share, during the time period beginning [month, day, time] and ending [month, day, time].

SCHEDULE 2

 

 

Compensation

 

The Company shall pay to the Agent in cash, upon each sale of Placement Shares pursuant to this Agreement, an amount equal to up to 3.0% of the aggregate gross proceeds from each sale of Placement Shares.

SCHEDULE 3

 

Notice Parties

 

The Company

 

Christopher Crupi (ccrupi@paramountgold.com)

 

Carlo Buffone (carlo@paramountgold.com)

 

The Agent

 

Jeff Lumby (jlumby@cantor.com)

 

Josh Feldman (jfeldman@cantor.com)

 

With copies to:

CFControlledEquityOffering@cantor.com

SCHEDULE 4

 

Subsidiaries

 

Paramount Nevada Gold Corp. (Formerly X-Cal Resources Ltd.)

X-Cal USA, Inc.

New Sleeper Gold LLC

Sleeper Mining Company LLC

Paramount Gold de Mexico de C.V.

Magnetic Resources Ltd.

Minera Gama S.A. de C.V.

EXHIBIT 7(l)

 

Form of Representation Date Certificate

 

The undersigned, the duly qualified and elected                             , of Paramount Gold and Silver Corp., a Delaware corporation (the “Company”), does hereby certify in such capacity and on behalf of the Company, pursuant to Section 7(l) of the Sales Agreement, dated April 11, 2014 (the “Sales Agreement”), between the Company and Cantor Fitzgerald & Co., that to the best of the knowledge of the undersigned:

 

(i) The representations and warranties of the Company in Section 6 of the Sales Agreement (A) to the extent such representations and warranties are subject to qualifications and exceptions contained therein relating to materiality or Material Adverse Effect, are true and correct on and as of the date hereof with the same force and effect as if expressly made on and as of the date hereof, except for those representations and warranties that speak solely as of a specific date and which were true and correct as of such date, and (B) to the extent such representations and warranties are not subject to any qualifications or exceptions, are true and correct in all material respects as of the date hereof as if made on and as of the date hereof with the same force and effect as if expressly made on and as of the date hereof, except for those representations and warranties that speak solely as of a specific date and which were true and correct as of such date; and

 

(ii) The Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied pursuant to the Sales Agreement at or prior to the date hereof.

 

		
PARAMOUNT GOLD AND SILVER CORP.

			 
		
By: 

	 
			 
		
Name:

	  
			 
		
Title:

	 
	 		
	Date: 	 			

Exhibit 22

 

Permitted Free Writing Prospectus

 

None.Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this
“Agreement”) is dated as of April 10, 2014, by and among Cordia Bancorp Inc., a Virginia corporation (the “Company”),
and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser”
and collectively, the “Purchasers”).

 

RECITALS

 

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

 

B.           Each
Purchaser, severally and not jointly, wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated
in this Agreement, that aggregate number of shares of the Company’s Mandatorily Convertible, Noncumulative, Nonvoting, Perpetual
Preferred Stock, Series A (the “Preferred Stock”) set forth below such Purchaser’s name on the signature
page of this Agreement.

 

The Preferred Stock will have the terms
set forth in the articles of amendment to the Company’s articles of incorporation, as amended (“Articles of Incorporation”)
designating the Preferred Stock in the form attached hereto as Exhibit A (the “Preferred Stock Designation”).
The Preferred Stock will be, subject to the approval of the Company’s stockholders as provided herein, mandatorily convertible
into shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”) and non-voting
common stock, par value $0.01 per share (the “Non-Voting Common Stock”), subject to and in accordance with the
terms and conditions of the Preferred Stock Designation. The Non-Voting Common Stock will have the terms set forth in the articles
of amendment to the Articles of Incorporation in the form attached hereto as Exhibit B (the “Non-Voting Articles
of Amendment”). The Company will file the Preferred Stock Designation and the Non-Voting Articles of Amendment with the
Virginia State Corporation Commission (the “SCC”) prior to and as a condition to the consummation of the transactions
contemplated by this Agreement.

 

The shares of Preferred Stock to be sold
pursuant to the terms of this Agreement are sometimes referred to herein as the “Purchased Shares.” The shares
of Common Stock and Non-Voting Common Stock into which the Purchased Shares are to be convertible, as well as the shares of Common
Stock into which the shares of Non-Voting Common Stock are convertible, are referred as the “Underlying Shares”
and the Underlying Shares and the Purchased Shares are referred to, collectively, as the “Securities.”

 

    	 

    	 

    

 

C.           Contemporaneously
with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights Agreement,
substantially in the form attached hereto as Exhibit C (the “Registration Rights Agreement”), pursuant
to which, among other things, the Company will agree to provide certain registration rights with respect to the Underlying Shares
under the Securities Act and the rules and regulations promulgated thereunder and applicable state securities laws.

 

D.           As
a condition to the willingness of the Purchasers to enter into this Agreement, each of the directors and executive officers of
the Company (representing holders of at least 30% of the issued and outstanding shares of Common Stock) have entered into a Voting
Agreement, substantially in the form attached hereto as Exhibit D, dated as of the date hereof, with the Company.

 

E.           The
Company has engaged Sandler O’Neill & Partners, L.P. as its exclusive placement agent (the “Placement Agent”)
for the offering of the Purchased Shares.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual
covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Company and the Purchasers hereby agree as follows:

 

ARTICLE
I.

DEFINITIONS

 

Definitions. In addition to the terms
defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms shall have the meanings indicated
in this Article I:

 

“Action” means any action,
suit, inquiry, notice of violation, arbitration, complaint, proceeding (including any partial proceeding such as a deposition)
or investigation pending or, to the Company’s Knowledge, threatened in writing against the Company, any Subsidiary or any
of their respective properties or any officer, director or employee of the Company or any Subsidiary acting in his or her capacity
as an officer, director or employee before or by any federal, state, county, local or foreign court, arbitrator, governmental or
administrative agency, regulatory authority, stock market, stock exchange or trading facility.

 

“Affiliate” means, with
respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, Controls, is controlled
by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act.
With respect to a Purchaser, any investment fund or managed account that is managed on a discretionary basis by the same investment
manager as such Purchaser will be deemed to be an Affiliate of such Purchaser.

 

“Agency” has the meaning
set forth in Section 3.1(nn).

 

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

 

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

 

    	2

    	 

    

 

“Bank” means the Company’s
wholly owned subsidiary, Bank of Virginia, a Virginia chartered banking corporation.

 

“Bank Board” has the
meaning set forth in Section 4.13(a).

 

“Bank Board Observer”
has the meaning set forth in Section 4.13(a).

 

“Bank Board Representative”
has the meaning set forth in Section 4.13(a).

 

“Benefit Plan” means
all plans, programs, agreements, contracts, policies, practices, or other arrangements providing compensation or benefits to any
current or former employee, officer, director or consultant of the Company or any Subsidiary or any beneficiary or dependent thereof
that is sponsored or maintained by the Company, any Subsidiary or any ERISA Affiliate, or to which the Company, any Subsidiary
or any ERISA Affiliate contributes or is obligated to contribute, has any actual or potential liability or is party, whether or
not written, including without limitation any “employee welfare benefit plan” within the meaning of Section 3(3) of
ERISA, any “employee pension benefit plan” within the meaning of Section 3(2) of ERISA (whether or not such plan is
subject to ERISA) and any bonus, incentive, deferred compensation, vacation, stock purchase, stock appreciation right, stock option
or equity award, equity based severance, employment, independent contractor, change of control, consulting or fringe benefit plan,
program, agreement or policy.

 

“BFI” means the Bureau
of Financial Institutions of the Virginia State Corporation Commission.

 

“BHC Act” means the Bank
Holding Company Act of 1956, as amended.

 

“Board of Directors”
means the board of directors of the Company.

 

“Board Representative”
has the meaning set forth in Section 4.13(a).

 

“Business Day” means
a day, other than a Saturday or Sunday, on which banks in Virginia are open for the general transaction of business.

 

“Closing” means the closing
of the purchase and sale of the Purchased Shares pursuant to this Agreement.

 

“Closing Date” means
the Trading Day when all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all
of the conditions set forth in Sections 2.1, 2.2, 5.1 and 5.2 hereof are satisfied, or such other date as the parties may mutually
agree.

 

“Code” has the meaning
set forth in Section 3.1(pp).

 

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

 

    	3

    	 

    

 

“Common Stock” has the
meaning set forth in the Recitals, and also includes any securities into which the Common Stock may hereafter be reclassified or
changed.

 

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

 

“Company Counsel” means
Kilpatrick Townsend & Stockton LLP.

 

“Company Deliverables”
has the meaning set forth in Section 2.2(a).

 

“Company Reports” has
the meaning set forth in Section 3.1(kk).

 

“Company Stock Option”
means any outstanding stock option issued under any Company Stock Option Plan.

 

“Company Stock Option Plan”
means the Bank of Virginia 2005 Stock Option Plan and the Bank of Virginia 2011 Stock Incentive Plan.

 

“Company’s Knowledge”
means with respect to any statement made to the knowledge of the Company, that the statement is based upon the actual knowledge,
after reasonable inquiry, of the executive officers of the Company.

 

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

 

“Covered Person” has
the meaning set forth in Section 3.1(jj).

 

“CRA” has the meaning
set forth in Section 3.1(ll).

 

“Disclosure Materials”
has the meaning set forth in Section 3.1(h).

 

“Disqualification Event”
has the meaning set forth in Section 3.1(jj).

 

“DTC” means The Depository
Trust Company.

 

“Effective Date” means
the date on which the initial Registration Statement required by the terms hereof is first declared effective by the Commission.

 

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

 

“ERISA” has the meaning
set forth in Section 3.1(pp).

 

“ERISA Affiliate” means
any entity that is treated under Section 414 of the Code as single employer with the Company or any Subsidiary.

 

    	4

    	 

    

 

“Exchange Act” means
the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

 

“FDIC” means the Federal
Deposit Insurance Corporation.

 

“Federal Reserve” has
the meaning set forth in Section 3.1(kk).

 

“Fund Entities” has the
meaning set forth in Section 4.13(a).

 

“GAAP” means U.S. generally
accepted accounting principles.

 

“Indemnified Person”
has the meaning set forth in Section 4.7(b).

 

“Information” has the
meaning set forth in Section 4.11.

 

“Insurer” has the meaning
set forth in Section 3.1(oo).

 

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

 

“IT Assets” has the meaning
set forth in Section 3.1(r).

 

“Jointly Indemnifiable Claims”
has the meaning set forth in Section 4.13(a).

 

“Lead Investor” means
TNH Financials Fund, L.P.

 

“Lien” means any lien,
charge, claim, encumbrance, security interest, right of first refusal, preemptive right or other restrictions of any kind.

 

“Loan Investor” has the
meaning set forth in Section 3.1(nn).

 

“Material Adverse Effect”
means, with respect to the Company, any change, circumstance or effect, individually or in the aggregate, that (i) is, or is reasonably
expected to be, materially adverse to the business, earnings, properties, results of operations, financial condition, assets
or liabilities of the Company and its Subsidiaries taken as a whole, (ii) could materially impair the ability of the Company to
perform its obligations under this Agreement or to consummate the Closing or (iii) could result in a material adverse effect on
the legality, validity or enforceability of any Transaction Document; provided, however, in determining whether a Material
Adverse Effect has occurred, there shall be excluded any effect to the extent resulting from the following: (A) changes, after
the date hereof, in GAAP or regulatory accounting requirements applicable to financial institutions generally, except to the extent
such change disproportionately adversely affects the Company and its Subsidiaries, taken as a whole, (B) changes, after the
date hereof, in laws of general applicability, rules and regulations or interpretations thereof by any governmental or regulatory
authorities, agencies, courts, commissions or other entities, whether federal, state, local or foreign, or applicable self-regulatory
organizations, (C) changes, after the date hereof, in global or national or regional political conditions (including the outbreak
of war or acts of terrorism) or in general or regional economic or market conditions affecting financial institutions or their
holding companies generally except to the extent that any such changes in general or regional economic or market conditions have
a disproportionate adverse effect on such party or (D) the public disclosure of this Agreement or the transactions contemplated
hereby.

 

    	5

    	 

    

 

“Material Contract” means
any contract of the Company or any Subsidiary which:

 

(1) grants any Person a right of first refusal,
right of first offer or similar right with respect to any material properties, assets or businesses of the Company or any Subsidiary;

 

(2) contains covenants that limit the ability
of the Company or any Subsidiary to compete in any line of business or with any person or which involve any restriction of the
geographical area in which, or method by which or with whom, the Company or any Subsidiary may carry on its business (other than
as may be required by law or applicable regulatory authorities); and any contract that could require the disposition of any material
assets or line of business of the Company or any Subsidiary;

 

(3) involves any joint venture, partnership,
strategic alliance, or other similar arrangement (including any franchising agreement, but in any event, excluding introducing
broker agreements); or relates to the acquisition or disposition of any material business or material assets (whether by merger,
sale of stock or assets, or otherwise), which acquisition or disposition is not yet complete or where such contract contains continuing
material obligations or contains continuing indemnity obligations of the Company or any Subsidiary;

 

(4) involves the lease of real property
or any other lease with annual rental payments aggregating $100,000 or more;

 

(5) other than with respect to loans, provides
for, or is reasonably likely to result in, the receipt or expenditure of more than $100,000 on an annual basis or $200,000 in the
aggregate, including the payment or receipt of royalties or other amounts calculated based upon revenues or income;

 

(6) permits the Company or any Subsidiary
to use any Intellectual Property that is material to its business (except for any “shrinkwrap” or “click through”
license agreements or other agreements for software that is generally available to the public and has not been customized for the
Company or any Subsidiary);

 

(7) by its terms limits the payment of dividends
or other distributions by the Company or any Subsidiary;

 

(8) contains or involves any standstill
or similar agreement pursuant to which the Company or any Subsidiary has agreed not to acquire assets or securities or another
person;

 

(9) would prevent, delay or impede the Company’s
ability to consummate the transactions contemplated by the Transaction Documents;

 

    	6

    	 

    

 

(10) provides for indemnification by the
Company or any Subsidiary of any Person, except for immaterial contracts entered into in the ordinary course of business consistent
with past practice;

 

(11) other than contracts relating to the
ordinary course management of credit extensions, contains a put, call, or similar right pursuant to which the Company or any Subsidiary
could be required to purchase or sell, as applicable, any equity interests or assets that have a fair market value or purchase
price of more than $50,000;

 

(12) constitutes an employment or independent
contractor contract or understanding (including any understandings or obligations with respect to severance or termination pay,
liabilities or fringe benefits) with any present or former director, officer, employee or consultant;

 

(13) constitutes a plan, contract or understanding
providing for any bonus, pension, option, deferred compensation, retirement payment, profit sharing or similar arrangement with
respect to any present or former director, officer, employee or consultant;

 

(14) is with any governmental entity and
imposes any material obligation or restriction on the Company or any Subsidiary;

 

(15) relates to indebtedness for borrowed
money, letters of credit, capital lease obligations, obligations secured by a Lien or interest rate or currency hedging agreements
(including guarantees in respect of any of the foregoing, but in any event excluding trade payables, securities transactions and
brokerage agreements arising in the ordinary course of business consistent with past practice, intercompany indebtedness and immaterial
leases for office equipment) in excess of $100,000, except for those issued in the ordinary course of business; or

 

(16) that was filed as an exhibit to the
SEC Reports on file as of the date of this Agreement pursuant to Item 601 of Regulation S-K promulgated under the Securities Act.

 

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

 

“Money Laundering Laws”
has the meaning set forth in Section 3.1(ii).

 

“New Security” has the
meaning set forth in Section 4.18(a).

 

“Non-Performing Assets” means
loans on non-accrual status plus other real estate owned.

 

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

 

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

 

“Observer” has the meaning
set forth in Section 4.13(a).

 

    	7

    	 

    

 

“OFAC” means the Office
of Foreign Assets Control of the U.S. Treasury Department.

 

“Offering” has the meaning
set forth in Section 4.18(b).

 

“Passivity Commitments”
means the passivity commitments required by the Federal Reserve to be entered into by a Purchaser in connection with the consummation
of the transactions contemplated by this Agreement.

 

“Person” means an individual,
corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole
proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein.

 

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

 

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

 

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

 

“Press Release” has the
meaning set forth in Section 4.5.

 

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

 

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

 

“Purchase Price” means
$42,500 per share for each Purchased Share.

 

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

 

“Purchaser” or “Purchasers”
shall have the meaning ascribed to such term in the Preamble.

 

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

 

“Purchaser Party” has
the meaning set forth in Section 4.7(a).

 

“Purchaser Related Party”
has the meaning set forth in Section 6.19.

 

“Qualifying Ownership Interest”
has the meaning set forth in Section 4.13(a).

 

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

 

    	8

    	 

    

 

 “Registration Statement”
means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale
by Purchasers of the Registrable Securities (as defined in the Registration Rights Agreement).

 

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

 

“Regulation O” has the
meaning set forth in Section 3.1(t).

 

“Regulatory Agreement”
has the meaning set forth in Section 3.1(ll).

 

“Required Approvals”
has the meaning set forth in Section 3.1(e).

 

“Rule 144” means
Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

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

 

“SEC Reports” has the
meaning set forth in Section 3.1(h).

 

“Secretary’s Certificate”
has the meaning set forth in Section 2.2(a)(iv).

 

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

 

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

 

“Stockholder Approval” has
the meaning set forth in Section 4.11.

 

“Stockholder Proposal” has
the meaning set forth in Section 4.11.

 

“Subscription Amount”
means with respect to each Purchaser, the aggregate amount to be paid for the Purchased Shares purchased hereunder as indicated
on such Purchaser’s signature page to this Agreement.

 

“Subsidiary” means any
entity in which the Company, directly or indirectly, owns sufficient capital stock or holds a sufficient equity or similar interest
such that it is consolidated with the Company in the financial statements of the Company.

 

“Tax” means all United
States federal, state, local or foreign income, profits, estimated, gross receipts, windfall profits, severance, property, intangible
property, occupation, production, sales, use, license, excise, emergency excise, franchise, capital gains, capital stock, employment,
withholding, transfer, stamp, payroll, goods and services, value added, alternative or add-on minimum tax, or any other tax, custom,
duty or governmental fee, or other like assessment or charge of any kind whatsoever, together with any interest, penalties, fines,
related liabilities or additions to tax that may become payable in respect thereof imposed by any governmental entity, whether
or not disputed.

 

    	9

    	 

    

 

“Tax Return” means any
return, declaration, report or similar statement required to be filed with respect any Taxes (including any attached schedules),
including, without limitation, any information return, claim or refund, amended return and declaration of estimated Tax.

 

“Trading Day” means (i) a
day on which the Common Stock is listed or quoted and traded on its Principal Trading Market (other than the OTC Bulletin Board),
or (ii) if the Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common
Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is not
quoted on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported in the “pink
sheets” by Pink Sheets LLC (or any similar organization or agency succeeding to its functions of reporting prices); provided,
that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading
Day shall mean a Business Day.

 

“Trading Market” means
whichever of the New York Stock Exchange, the NYSE Amex, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ
Capital Market or the OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date in question.

 

“Transaction Documents”
means this Agreement, the schedules and exhibits attached hereto and any other documents or agreements executed in connection with
the transactions contemplated hereunder.

 

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

 

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

 

ARTICLE
II.

PURCHASE AND SALE

 

2.1         Closing.

 

(a)          Purchase
of Securities.  Subject to the terms and conditions set forth in this Agreement, at the Closing the Company shall
issue and sell to each Purchaser, and each Purchaser shall, severally and not jointly, purchase from the Company, the number of
shares of Preferred Stock as indicated on such Purchaser’s signature page to this Agreement at a per share price equal to
the Purchase Price. Notwithstanding the above, the Lead Investor shall not be obligated to purchase any Purchased Shares to the
extent such purchase would cause the Lead Investor, together with its Affiliates and any other Persons with which it is acting
in concert or whose holdings would otherwise be required to be aggregated with the Investor’s holdings for purposes of the
BHC Act or the Change in Bank Control Act, to, directly or indirectly, collectively own, control or have the power to vote (including
after the conversion of the Purchased Shares into the Underlying Shares) in excess of (i) 4.9% of the Common Stock issued and outstanding
or (ii) 24.9% of the Company’s total equity outstanding.

 

    	10

    	 

    

 

(b)          Closing.  The
Closing of the purchase and sale of the Purchased Shares shall take place at the offices of the Company Counsel, Kilpatrick Townsend
& Stockton LLP, 607 14th Street, NW, Washington, DC on the Closing Date or at such other locations or remotely by
facsimile transmission or other electronic means as the parties may mutually agree and shall occur no later than the fifth Business
Day following the date on which the conditions to closing set forth in Article V are satisfied (other than those conditions that
by their nature are to be satisfied at Closing but subject to the fulfillment or waiver of those conditions).

 

(c)          Delivery
and Payment.  At the Closing, the Company shall deliver to each of the respective Purchasers a certificate or certificates,
in such reasonable denominations as the Purchaser may have designated in writing not less than three days before the Closing, and
registered in the name of the Purchaser (or its designee or nominee), representing the number of shares of Preferred Stock subscribed
for by such Purchaser. At the Closing, Purchaser shall deliver its respective Subscription Amount in immediately available funds
by wire transfer to a bank account designated by the Company.

 

2.2         Closing
Deliveries.

 

(a)          On
or prior to the Closing, the Company shall issue, deliver or cause to be delivered to each Purchaser the following (the “Company
Deliverables”):

 

(i)          this
Agreement, including the Registration Rights Agreement, duly executed by the Company;

 

(ii)         one
or more stock certificates (if physical certificates are required by Purchaser to be held immediately prior to Closing; if not,
then facsimile or “.pdf” copies of such certificates shall suffice for purposes of Closing with the original stock
certificates to be delivered within three Business Days of the Closing Date), evidencing the shares of Preferred Stock subscribed
for by Purchaser hereunder, registered in the name of Purchaser;

 

(iii)        a
legal opinion of Company Counsel, dated as of the Closing Date and in the form attached hereto as Exhibit E, executed
by such counsel and addressed to the Purchasers;

 

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

 

    	11

    	 

    

 

(v)         the
certificate referred to in Section 5.1(g);

 

(vi)        a
certificate evidencing the formation and good standing of each of the Company and the Bank in Virginia issued by the SCC, as of
a date within five (5) Business Days of the Closing Date;

 

(vii)       a
certificate evidencing the filing of the Preferred Stock Designation and the Non-Voting Articles of Amendment with the SCC on a
date that is on or before the Closing Date; and

 

(viii)      Voting
Agreements, duly executed by each of the directors and executive officers of the Company, which shall collectively represent at
least 30% of the issued and outstanding shares of Common Stock of the Company.

 

(b)          On
or prior to the Closing, each Purchaser shall deliver or cause to be delivered to the Company the following (the “Purchaser
Deliverables”):

 

(i)          this
Agreement, including the Registration Rights Agreement, duly executed by such Purchaser; and

 

(ii)         its
Subscription Amount, in U.S. dollars and in immediately available funds, in the amount indicated below such Purchaser’s name
on the applicable signature page hereto by wire transfer in accordance with the Company’s written instructions.

 

ARTICLE
III.

REPRESENTATIONS AND WARRANTIES

 

On or prior to the date hereof, the Company
delivered to Purchaser and Purchaser delivered to the Company a letter setting forth items the disclosure of which is necessary
in response to an express disclosure requirement contained in a provision hereof.

 

3.1         Representations
and Warranties of the Company.  The Company hereby represents and warrants as of the date hereof and the Closing
Date (except for the representations and warranties that speak as of a specific date, which shall be made as of such date), to
each of the Purchasers that:

 

(a)          Subsidiaries.  The
Company has no direct or indirect Subsidiaries other than the Bank. The Company owns, directly or indirectly, all of the capital
stock or comparable equity interests of each Subsidiary free and clear of any and all Liens, and all the issued and outstanding
shares of capital stock or comparable equity interest of each Subsidiary are validly issued and are fully paid, non-assessable
and free of preemptive and similar rights to subscribe for or purchase securities. There are no outstanding options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible
into or exercisable or exchangeable for, any shares of capital stock or other equity interest of any Subsidiary or any bonds, debentures,
notes or other indebtedness having the right to vote on any matters on which the shareholders of any Subsidiary may vote, or contracts,
commitments, understandings or arrangements by which any Subsidiary is or may become bound to issue additional shares of capital
stock or other equity interest of such Subsidiary or options, warrants, scrip, rights to subscribe to, calls or commitments of
any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares
of capital stock or other equity interest of any Subsidiary.

 

    	12

    	 

    

 

(b)          Organization
and Qualification.  The Company and each of its Subsidiaries is an entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable),
with the requisite power and authority to own or lease and use its properties and assets and to carry on its business as currently
conducted. Neither the Company nor any Subsidiary is in violation of any of the provisions of its respective certificate or articles
of incorporation, bylaws or other organizational or charter documents.  The Company and each of its Subsidiaries is duly
qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the
nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so
qualified or in good standing, as the case may be, would not have a Material Adverse Effect.  The Company is duly registered
as a bank holding company under the BHC Act.  The Bank’s deposit accounts are insured to the fullest extent permitted
by the FDIC, and all premiums and assessments required to be paid in connection therewith have been paid when due. The Company
has conducted its business in compliance with all applicable federal, state and foreign laws, orders, judgments, decrees, rules,
regulations and applicable stock exchange requirements, including all laws and regulations restricting activities of bank holding
companies and banking organizations, except for any noncompliance that, individually or in the aggregate, has not had and would
not be reasonably expected to have a Material Adverse Effect.

 

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

 

    	13

    	 

    

 

(d)          No
Conflicts.  The execution, delivery and performance by the Company of the Transaction Documents to which it is a
party and the consummation by the Company of the transactions contemplated hereby or thereby (including, without limitation, the
issuance of the Securities) do not and will not (i) conflict with or violate any provisions of the Company’s or any Subsidiary’s
certificate or articles of incorporation, bylaws or otherwise result in a violation of the organizational documents of the Company
or any Subsidiary, (ii)  conflict with, or constitute a default (or an event that with notice or lapse of time or both would
result in a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or give to others
any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any Material
Contract, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject (including
federal and state securities laws and regulations and the rules and regulations, assuming the correctness of the representations
and warranties made by the Purchasers herein, of any self-regulatory organization to which the Company or its securities are subject,
including all applicable Trading Markets), or by which any property or asset of the Company is bound or affected, except in the
case of clauses (ii) and (iii) such as would not have or reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect..

 

(e)          Filings,
Consents and Approvals.  Neither the Company nor any of its Subsidiaries is required to obtain any consent, waiver,
authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local
or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the
Transaction Documents (including, without limitation, the issuance of the Securities), other than (i) obtaining the Stockholder
Approval, (ii) filings required by applicable state securities laws, (iii) the filing of a Notice of Exempt Offering of Securities
on Form D with the Commission under Regulation D of the Securities Act, (iv) the filing of any requisite notices
to the Principal Trading Market for the issuance and sale of the Preferred Shares or the issuance of the Underlying Shares in the
time and manner required thereby and (v) those that have been made or obtained prior to the date of this Agreement (collectively,
the “Required Approvals”).

 

    	14

    	 

    

 

(f)          Issuance
of the Securities. The issuance of the Preferred Stock has been duly authorized and the Preferred Stock, when issued and paid
for in accordance with the terms of the Transaction Documents, will be duly and validly issued, fully paid and non-assessable and
free and clear of all Liens, other than restrictions on transfer provided for in the Transaction Documents or imposed by applicable
securities laws, and shall not be subject to preemptive or similar rights, other than preemptive or similar rights provided for
in the Transaction Documents. Subject to the receipt of the Stockholder Approval, the issuance of the Underlying Shares has been
duly authorized and the Underlying Shares, when issued in accordance with the terms of the Preferred Stock Designation and the
Non-Voting Articles of Amendment, will be duly authorized and validly issued, fully paid and non-assessable and free and clear
of all Liens, other than restrictions on transfer provided for in the Transaction Documents or imposed by applicable securities
laws, and shall not be subject to preemptive or similar rights, other than preemptive or similar rights. Assuming the accuracy
of the representations and warranties of the Purchasers in this Agreement, the Preferred Stock will be issued in compliance with
all applicable federal and state securities laws. There are sufficient authorized Underlying Shares for the issuance of the Underlying
Shares into which the Preferred Shares shall be convertible. The Company has reserved, and will continue to reserve, free of any
preemptive or similar rights of shareholders of the Company, a number of unissued Underlying Shares sufficient to issue and deliver
the Underlying Shares into which the Preferred Shares shall be convertible.

 

(g)          Capitalization.  The
authorized capital stock of the Company consists of 120,000,000 shares of Common Stock, 80,000,000 shares of common stock not designated
as part of a class or series, and 2,000 shares of serial preferred stock. As of March 31, 2014, there were 2,788,302 shares of
Common Stock outstanding (not including 578,125 unvested restricted shares), 124,692 shares of Common Stock subject to outstanding
stock options, and no shares of preferred stock outstanding. All of the outstanding shares of capital stock of the Company are
duly authorized, validly issued, fully paid and non-assessable, have been issued in compliance in all material respects with all
applicable federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights
or similar rights to subscribe for or purchase any capital stock of the Company. The Company represents that: (i) no shares
of the Company’s outstanding capital stock are subject to preemptive rights or any other similar rights; (ii) there
are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating
to, or securities or rights convertible into, or exercisable or exchangeable for, any shares of capital stock of the Company, or
contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional shares of
capital stock of the Company or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares of capital stock of the Company,
except as set forth in this Section 3.1(g); (iii) there are no material outstanding debt securities, notes,  credit agreements,
credit facilities or other agreements, documents or instruments evidencing indebtedness of the Company or by which the Company
is bound; (iv) except for registration obligations set forth in the Transaction Documents, there are no agreements or arrangements
under which the Company is obligated to register the sale of any of its securities under the Securities Act; (v) there are
no outstanding securities or instruments of the Company that contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company is or may become bound to redeem a security of the Company; (vi) the
Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement;
and (vii) the Company has no liabilities or obligations of any kind, whether accrued, contingent, absolute, determined, determinable
or otherwise (other than liabilities or obligations disclosed in the SEC Reports or incurred in the ordinary course of business
consistent with past practice since December 31, 2012), which, individually or in the aggregate, will have or would reasonably
be expected to have a Material Adverse Effect.  There are no securities or instruments containing anti-dilution or similar
provisions that will be triggered by the issuance of the Securities. Each Company Stock Option (i) was granted in compliance with
all applicable laws and all of the terms and conditions of the Company Stock Option Plans pursuant to which it was issued, (ii)
has an exercise price per share of Common Stock equal to or greater than the fair market value of a share of Common Stock on the
date of such grant and is otherwise exempt from Section 409A of the Code and (iii) has a grant date identical to the date on which
the Board of Directors or compensation committee of the Board of Directors actually awarded such Company Stock Option. Except as
set forth on Schedule 3.1(g) and other than the Company Stock Options, neither the Company nor any Subsidiary has any outstanding
equity-based compensation awards or commitments.

 

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(h)          SEC
Reports; Disclosure Materials.  The Company has filed all reports, schedules, forms, statements and other documents
required to be filed by it under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof (the foregoing materials,
including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC
Reports” and together with this Agreement and the schedules to this Agreement, the “Disclosure Materials”),
on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration
of any such extension. As of their respective filing dates, the SEC Reports complied in all material respects with the requirements
of the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of
the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to
be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made,
not misleading.

 

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

 

(j)          Tax
Matters.  The Company (i) has prepared and filed all Tax Returns required by any jurisdiction to which it is
subject, (ii) has paid all Taxes that are material in amount, shown or determined to be due on such Tax Returns, except those
being contested in good faith, with respect to which adequate reserves have been set aside on the books of the Company and (iii) has
set aside on its books provisions reasonably adequate for the payment of all Taxes for periods subsequent to the periods to which
such Tax Returns apply.

 

(k)          Material
Changes.  Since the date of the latest audited financial statements included within the SEC Reports filed prior to
the date of this Agreement, except as disclosed in subsequent SEC Reports filed prior to the date of this Agreement, the businesses
of the Company and its Significant Subsidiaries have been conducted only in the ordinary course, in substantially the same manner
as theretofore conducted, and there has not occurred since December 31, 2012, any event that has had a Material Adverse Effect.

 

    	16

    	 

    

 

(l)          Environmental
Matters.  Neither the Company nor any of its Subsidiaries (i) is in violation of any statute, rule, regulation,
decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release
of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous
or toxic substances (collectively, “Environmental Laws”), (ii) owns or operates any real property contaminated
with any substance that is in violation of any Environmental Laws, (iii) is liable for any off-site disposal or contamination
pursuant to any Environmental Laws, or (iv) is subject to any claim relating to any Environmental Laws; in each case, which
violation, contamination, liability or claim has had or would reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect; and, to the Company’s Knowledge, there is no pending or threatened investigation that might lead
to such a claim.

 

(m)          Litigation.  There
is no Action which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents
or the Securities or, individually or in the aggregate, has prevented or materially impaired, or would reasonably be expected to
prevent or materially impair, the ability of the Company to consummate the transactions contemplated hereby or by the other Transaction
Documents or (ii) involves a claim that is or that could be, if adversely determined, for damages in excess of $200,000 or that
seeks injunctive relief that could be material to the Company and its Subsidiaries. Neither the Company nor any Subsidiary, nor,
to the Company’s knowledge, any director or officer of the Company or any Subsidiary, is the subject of any Action involving
a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. To the Company’s
Knowledge, there is not pending or contemplated, any investigation by the Commission involving the Company or any Subsidiary, or
any current or former director or officer of the Company or any Subsidiary. The Commission has not issued any stop order or other
order suspending the effectiveness of any registration statement filed by the Company or any of its Subsidiaries under the Exchange
Act or the Securities Act.

 

(n)          Employment
Matters.  No material labor dispute exists or, to the Company’s Knowledge, is imminent with respect to any
of the employees of the Company or any Subsidiary. None of the employees of the Company or any Subsidiary is a member of a union
that relates to such employee’s relationship with the Company, and neither the Company nor any of its Subsidiaries is a party
to a collective bargaining agreement, and the Company and each Subsidiary believes that its relationship with its employees is
good.  To the Company’s Knowledge, no executive officer is, or is now expected to be, in violation of any material
term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement,
or any other contract or agreement or any restrictive covenant in favor of a third party, and to the Company’s Knowledge,
the continued employment of each such executive officer does not subject the Company or any Subsidiary to any liability with respect
to any of the foregoing matters.  The Company and the Subsidiaries are in compliance with all U.S. federal, state, local
and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages
and hours, except where the failure to be in compliance would not have or reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.

 

    	17

    	 

    

 

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

 

(p)          Regulatory
Permits.  The Company and each of its Subsidiaries possess or have applied for all material certificates, authorizations
and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective
businesses as conducted and as described in the SEC Reports on file as of the date of this Agreement (“Material Permits”),
and (i) neither the Company nor any of its Subsidiaries has received any notice in writing of proceedings relating to the
revocation or material adverse modification of any such Material Permits and (ii) the Company is unaware of any facts or circumstances
that would give rise to the revocation or material adverse modification of any Material Permits.

 

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

 

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(r)          Patents
and Trademarks.  

 

(i)          The
Company and its Subsidiaries own, possess, license or have other rights to use all foreign and domestic patents, patent applications,
trade and service marks, trade and service mark registrations, trade names, copyrights, inventions, trade secrets, technology,
Internet domain names, know-how and other intellectual property (collectively, the “Intellectual Property”)
necessary for the conduct of their respective businesses as now conducted or as proposed to be conducted as disclosed in the SEC
Reports on file as of the date of this Agreement.  Except where such violations or infringements would not have or reasonably
be expected to have, either individually or in the aggregate, a Material Adverse Effect, (a) there are no rights of third
parties to any such Intellectual Property; (b) there is no infringement by third parties of any such Intellectual Property;
(c) there is no pending or threatened action, suit, proceeding or claim by others challenging the Company’s and its
Subsidiaries’ rights in or to any such Intellectual Property; (d) there is no pending or threatened action, suit, proceeding
or claim by others challenging the validity or scope of any such Intellectual Property; and (e) there is no pending or threatened
action, suit, proceeding or claim by others that the Company and/or any Subsidiary infringes or otherwise violates any patent,
trademark, copyright, trade secret or other proprietary rights of others.

 

(ii)         The
computers, computer software, firmware, middleware, servers, workstations, routers, hubs, switches, data communications lines,
and all other information technology equipment, and all associated documentation used in the business of the Company and the Subsidiaries
(the “IT Assets”) operate and perform in all material respects as required in connection with the conduct of
the business of the Company and the Subsidiaries. To the Company’s Knowledge, no person has gained unauthorized access to
the IT Assets. The Company and the Subsidiaries have implemented reasonable backup and disaster recovery technology for the IT
Assets consistent with industry practices. The Company and the Subsidiaries take reasonable measures to ensure the confidentiality,
privacy and security of customer, employee and other personally identifiable information, and are in compliance with all laws and
their own policies and procedures in connection therewith, and to the Company’s Knowledge there has been no unauthorized
access to or use of such information. The Company and the Subsidiaries have complied with all internet domain name registration
and other requirements of internet domain registrars concerning internet domain names that are used in the business.

 

(s)          Insurance.  The
Company and each of the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks
and in such amounts as the Company believes to be prudent and customary in the businesses and locations in which the Company and
the Subsidiaries are engaged.  Neither the Company nor any of its Subsidiaries has received any notice of cancellation
of any such insurance, nor, to the Company’s Knowledge, will it or any Subsidiary be unable to renew their respective existing
insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a Material Adverse Effect. The Company (i) maintains directors’ and officers’
liability insurance and fiduciary liability insurance with financially sound and reputable insurance companies, (ii) has timely
paid all premiums on such policies and (iii) there has been no lapse in coverage during the term of such policies.

 

(t)          Transactions
With Affiliates and Employees.  Except as set forth under the caption “Item 13. Certain Relationships, and
Related Transactions, and Director Independence” in the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2012, filed with the Commission on April 1, 2013, and other than the grant of stock options or other equity awards,
none of the officers or directors of the Company and, to the Company’s Knowledge, none of the employees of the Company or
its Subsidiaries, is presently a party to any transaction with the Company or to a presently contemplated transaction that would
be required to be disclosed pursuant to Item 404 of Regulation S-K promulgated under the Securities Act. The Company
and the Subsidiaries have disclosed any transactions with directors of the Company or of any Subsidiary as required by the Federal
Reserve’s Regulation O (“Regulation O”), and the Company and the Subsidiaries are otherwise in full compliance
with the requirements of Regulation O.

 

    	19

    	 

    

 

(u)          Internal
Control Over Financial Reporting.  The Company maintains internal control over financial reporting (as such term
is defined in Rule 13a-15(f) under the Exchange Act) designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles and such internal control over financial reporting is effective. Neither the Company nor any Subsidiary nor, to the
Company’s Knowledge, any director, officer, employee, auditor, accountant or representative of the Company or any Subsidiary
has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written
or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or any Subsidiary
or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that the Company
or any Subsidiary has engaged in questionable accounting or auditing practices. No attorney representing the Company or any Subsidiary,
whether or not employed by the Company or any Subsidiary, has reported evidence of a violation of securities laws, breach of fiduciary
duty or similar violation by the Company or any Subsidiary or any of their respective officers, directors, employees or agents
to the Board of Directors or any committee thereof or to any director or officer of the Company or any Subsidiary.

 

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

 

(w)          Certain
Fees.  No person or entity will have, as a result of the transactions contemplated by this Agreement, any valid right,
interest or claim against or upon the Company or a Purchaser for any commission, fee or other compensation pursuant to any agreement,
arrangement or understanding entered into by or on behalf of the Company, other than the Placement Agent with respect to the offer
and sale of Purchased Shares (which placement agent fees are being paid by the Company). The Company shall indemnify, pay, and
hold each Purchaser and its Affiliates harmless against, any liability, loss or expense (including, without limitation, attorneys’
fees and out-of-pocket expenses) arising in connection with any such right, interest or claim.

 

(x)          Private
Placement.  Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2
of this Agreement, no registration under the Securities Act is required for the offer and sale of the Preferred Stock by the Company
to the Purchasers under the Transaction Documents.  The issuance and sale of the Preferred Stock hereunder will not contravene
the rules and regulations of the Principal Trading Market and, upon the receipt of the Stockholder Approval, the issuance of the
Underlying Shares in accordance with the Preferred Stock Designation and the Non-Voting Articles of Amendment will not contravene
the rules and regulations of the Principal Trading Market.

 

    	20

    	 

    

 

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

 

(z)          No
Integrated Offering.  Assuming the accuracy of the Purchasers’ representations and warranties set forth in
Section 3.2, none of the Company, its Subsidiaries nor, to the Company’s  Knowledge, any of its Affiliates or any
Person acting on its behalf has, directly or indirectly, at any time within the past six months, made any offers or sales of any
Company security or solicited any offers to buy any security under circumstances that would eliminate the availability of the exemption
from registration under Regulation D under the Securities Act in connection with the offer and sale by the Company of the
Purchased Shares as contemplated hereby.

 

(aa)         Listing
and Maintenance Requirements.  The Company’s Common Stock is registered pursuant to Section 12(b) of the Exchange
Act, and the Company has taken no action designed to terminate the registration of the Common Stock under the Exchange Act nor
has the Company received any notification that the Commission is contemplating terminating such registration. The Company has not,
in the 12 months preceding the date hereof, received written notice from any Trading Market on which the Common Stock is listed
or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market.
The Company is, and has no reason  to believe that it will not in the foreseeable future continue to be, in compliance
in all material respects with the listing and maintenance requirements for continued trading of the Common Stock on the Principal
Trading Market.

 

(bb)         Investment
Company.  Neither the Company nor any of its Subsidiaries is required to be registered as, and is not an Affiliate
of, and immediately following the Closing will not be required to register as, an “investment company” within the meaning
of the Investment Company Act of 1940, as amended.

 

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

 

    	21

    	 

    

 

(dd)         Application
of Takeover Protections; Rights Agreements.  The Company has not adopted any stockholder rights plan or similar arrangement
relating to accumulations of beneficial ownership of Common Stock or a change in control of the Company.  

 

(ee)         Off
Balance Sheet Arrangements.  There is no transaction, arrangement, or other relationship between the Company (or
any Subsidiary) and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its
SEC Reports and is not so disclosed.

 

(ff)         Acknowledgment
Regarding Purchasers’ Purchase of Securities.  The Company acknowledges and agrees that each of the Purchasers
is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions
contemplated hereby and thereby.  The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary
of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby
and any advice given to the Company by any Purchaser or any of their respective representatives or agents in connection with the
Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Purchased
Shares.

 

(gg)         Absence
of Manipulation.  The Company has not, and to the Company’s Knowledge no one acting on its behalf has, taken,
directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of any of the Purchased Shares.

 

(hh)         OFAC.  Neither
the Company nor any Subsidiary nor, to the Company’s Knowledge, any director, officer, agent, employee, Affiliate or Person
acting on behalf of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not knowingly directly or indirectly
use the proceeds of the sale of the Purchased Shares, or lend, contribute or otherwise make available such proceeds to any Subsidiary,
joint venture partner or other Person or entity, towards any sales or operations in Cuba, Iran, Libya, Syria, Sudan, Myanmar or
any other country sanctioned by OFAC or for the purpose of financing the activities of any Person currently subject to any U.S.
sanctions administered by OFAC.

 

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

 

    	22

    	 

    

 

(jj)         No
Disqualification Events.  With respect to Purchased Shares to be offered and sold hereunder in reliance on Rule 506
under the Securities Act:

 

(i)          
none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company
participating in the offering, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities,
calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected
with the Company in any capacity at the time of sale, nor any nor any of the directors, executive officers, general partners, managing
members or other officers of the Placement Agent participating in the offering of the Purchased Shares (each, an “Covered
Person” and, together, “Covered Persons”) is
subject to any of the "Bad Actor" disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act
(a “Disqualification Event”), except for a Disqualification Event covered
by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Covered Person is subject to a
Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e),
and has furnished to Purchasers a copy of any disclosures required thereunder.

 

(ii)         The
Company is not aware of any person (other than any Covered Person (as defined in Section 3(jj)(i)) that has been or will be paid
(directly or indirectly) remuneration for solicitation of Purchasers in connection with the sale of the Purchased Shares.

 

(iii)        The
Company will notify Purchasers in writing, prior to the Closing Date, of (i) any Disqualification Event relating to any Covered
Person and (ii) any event that would, with the passage of time, become a Disqualification Event relating to any Covered Person.

 

(kk)         Reports,
Registrations and Statements.  Since January 1, 2011, the Company and each Subsidiary have filed all material reports,
registrations and statements, together with any required amendments thereto, that it was required to file with the Board of Governors
of the Federal Reserve System (the “Federal Reserve”), the FDIC, the BFI, and any other applicable federal or
state securities or banking authorities. All such reports and statements filed with any such regulatory body or authority are collectively
referred to herein as the “Company Reports.” As of their respective dates, the Company Reports complied as to
form in all material respects with all the rules and regulations promulgated by the Federal Reserve, the FDIC, the BFI and any
other applicable foreign, federal or state securities or banking authorities, as the case may be.

 

    	23

    	 

    

 

(ll)         Agreements
with Regulatory Agencies; Compliance with Certain Banking Regulations.  Except as disclosed in Schedule 3.1(ll),
neither the Company nor any Subsidiary is subject to any cease-and-desist or other similar order or enforcement action issued by,
or is a party to any written agreement, consent agreement or memorandum of understanding with, or is a party to any commitment
letter or similar undertaking to, or is subject to any capital directive by, or since January 1, 2011, has adopted any board resolutions
at the request of, any governmental entity that currently restricts in any material respect the conduct of its business or that
in any material manner relates to its capital adequacy, its liquidity and funding policies and practices, its ability to pay dividends,
its credit, risk management or compliance policies, its internal controls, its management or its operations or business (each item
in this sentence, a “Regulatory Agreement”), nor has the Company or any Subsidiary been advised since January
1, 2011 by any governmental entity that it is considering issuing, initiating, ordering, or requesting any such Regulatory Agreement.
The Company and each Subsidiary is in compliance with each Regulatory Agreement to which it is a party or subject. Neither the
Company nor any Subsidiary has received any notice from any governmental entity indicating that either the Company or any Subsidiary
is not in compliance with any such Regulatory Agreement. With respect to any matters requiring action by the Board of Directors
prior to the date of this Agreement or Closing, as applicable, that were set forth in writing by any of the Federal Reserve, the
FDIC or the BFI, the Company and its Subsidiaries have addressed such matters in all material respects.

 

The Company has no knowledge of any facts
and circumstances, and has no reason to believe that any facts or circumstances exist, that would cause the Bank: (i) to be deemed
not to be in satisfactory compliance with the Community Reinvestment Act and the regulations promulgated thereunder (“CRA”)
or to be assigned a CRA rating by federal or state banking regulators of lower than “satisfactory”; (ii) to be deemed
to be operating in violation, in any material respect, of the Bank Secrecy Act, the Patriot Act, any order issued with respect
to anti-money laundering by the OFAC, or any other anti-money laundering statute, rule or regulation; or (iii) to be deemed not
to be in satisfactory compliance, in any material respect, with all applicable privacy of customer information requirements contained
in any federal and state privacy laws and regulations as well as the provisions of all information security programs adopted by
the Subsidiaries.

  

(mm)         No
General Solicitation or General Advertising.  Neither the Company nor any Person acting on its behalf has engaged
or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities
Act) in connection with any offer or sale of the Purchased Shares.

 

(nn)         Mortgage
Banking Business.  Except as has not had and would not reasonably be expected to have a Material Adverse Effect:

 

(i)          The
Company and each of its Subsidiaries has complied with, and all documentation in connection with the origination, processing, underwriting,
credit approval and, if applicable, foreclosure of any mortgage loan originated, purchased or serviced by the Company or any of
its Subsidiaries satisfied, (A) all applicable federal, state and local laws, rules and regulations with respect to the origination,
insuring, purchase, sale, pooling, servicing, subservicing, foreclosure or filing of claims in connection with mortgage loans,
including all laws relating to real estate settlement procedures, consumer credit protection, truth in lending laws, usury limitations,
fair housing, transfers of servicing, collection practices, equal credit opportunity and adjustable rate mortgages, (B) the responsibilities
and obligations relating to mortgage loans set forth in any agreement between the Company or any of its Subsidiaries and any Agency,
Loan Investor or Insurer, (C) the applicable rules, regulations, guidelines, handbooks and other requirements of any Agency, Loan
Investor or Insurer and (D) the terms and provisions of any mortgage or other collateral documents and other loan documents with
respect to each mortgage loan; and

 

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(ii)         Since
January 1, 2011, no Agency, Loan Investor or Insurer has (A) claimed in writing that the Company or any of its Subsidiaries has
violated or has not complied with the applicable underwriting standards with respect to mortgage loans sold by the Company or any
of its Subsidiaries to a Loan Investor or Agency, or with respect to any sale of mortgage servicing rights to a Loan Investor,
(B) imposed in writing restrictions on the activities (including commitment authority) of the Company or any of its Subsidiaries
or (C) indicated in writing to the Company or any of its Subsidiaries that it has terminated or intends to terminate its relationship
with the Company or any of its Subsidiaries for poor performance, poor loan quality or concern with respect to the Company’s
or any of its Subsidiaries’ compliance with laws,

 

For purposes of this Section 3.1(nn):  (A)
“Agency” means the Federal Housing Administration, the Federal Home Loan Mortgage Corporation, the Farmers Home
Administration (now known as Rural Housing and Community Development Services), the Federal National Mortgage Association, the
U.S. Department of Veterans’ Affairs, the Rural Housing Service of the U.S. Department of Agriculture, the U.S. Department
of Justice, the Office of the Attorney General of the Commonwealth of Virginia or any other federal or state agency with authority
to (i) determine any investment, origination, lending or servicing requirements with regard to mortgage loans originated, purchased
or serviced by the Company or any of its Subsidiaries or (ii) originate, purchase, or service mortgage loans, or otherwise promote
mortgage lending, including state and local housing finance authorities; (B) “Loan Investor” means any person
(including an Agency) having a beneficial interest in any mortgage loan originated, purchased or serviced by the Company or any
of its Subsidiaries or a security backed by or representing an interest in any such mortgage loan; and (C) “Insurer”
means a person who insures or guarantees for the benefit of the mortgagee all or any portion of the risk of loss upon borrower
default on any of the mortgage loans originated, purchased or serviced by the Company or any of its Subsidiaries, including the
Federal Housing Administration, the United States Department of Veterans’ Affairs, the Rural Housing Service of the U.S.
Department of Agriculture and any private mortgage insurer, and providers of hazard, title or other insurance with respect to such
mortgage loans or the related collateral.

 

(oo)         Risk
Management Instruments.  Since January 1, 2011, all material derivative instruments, including, swaps, caps, floors
and option agreements, whether entered into for the Company’s own account, or for the account of one or more of the Subsidiaries,
were entered into (1) only in the ordinary course of business, (2) in accordance with prudent practices and in all material respects
with all applicable laws, rules, regulations and regulatory policies and (3) with counterparties believed to be financially responsible
at the time; and each of them constitutes the valid and legally binding obligation of the Company or one of the Subsidiaries, enforceable
in accordance with its terms.  Neither the Company or the Subsidiaries, nor, to the Company’s Knowledge, any other
party thereto, is in breach of any of its material obligations under any such agreement or arrangement.

 

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(pp)         ERISA.  The
Company and its Subsidiaries are in compliance in all material respects with all applicable legal requirements governing its employee
benefit plans, programs, policies and arrangements, including the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder (herein called “ERISA”) and the Internal
Revenue Code of 1986, as amended, including the regulations and published interpretations thereunder (the “Code”)
applicable to employee benefit plans (as defined in ERISA). No “reportable event” (as defined in ERISA) has occurred
with respect to any “pension plan” (as defined in ERISA) for which the Company would have any liability. The Company
and its Subsidiaries have not incurred and do not expect to incur, directly or indirectly, liability under (i) Title IV of ERISA
or (ii) Sections 412 or 4971 of the Code; and each “pension plan” for which the Company or any Subsidiary would have
liability that is intended to be qualified under Section 401(a) of the Code is so qualified, has received a favorable determination
or opinion letter on which it is entitled to rely, and nothing has occurred, whether by action or by failure to act, which would
cause the loss of such qualification. Except as disclosed in Schedule 3.1(pp), neither the Company nor any of its Subsidiaries
has any obligation to provide health or welfare benefits to any individual following the termination of such individual’s
employment or service with the Company or a Subsidiary (other than as required under any the Consolidated Omnibus Budget Reconciliation
Act of 1986, as amended, or any similar state law). All health, life, and long-term disability plans sponsored by the Company or
any of its Subsidiaries, or under which they have liability, are fully insured. None of the Company’s or its Subsidiaries’
Benefit Plans, programs, policies, or arrangements is subject to any laws other than those of the United States or any state, city,
county, or other municipality in the United States.

 

(qq)         Shell
Company Status.  The Company is not, and has never been, an issuer identified in Rule 144(i)(1) under the Securities
Act.

 

(rr)         Reservation
of Underlying Shares.  The Company has reserved, and will continue to reserve, free of any preemptive or similar
rights of stockholders of the Company, a number of unissued shares of Common Stock and Non-Voting Common Stock sufficient to issue
and deliver the Underlying Shares into which the Preferred Stock is automatically convertible, assuming Stockholder Approval has
been obtained.

 

(ss)         Loan
and Credit Loss Reserves. As of the date hereof and as of the Closing Date, the Company’s management has reasonably and
in good faith concluded that the loan and credit loss reserves of the Bank are adequate, and neither the Company nor the Bank has
been advised by any of the Federal Reserve, the FDIC or the BFI, as applicable, that the Bank’s loan and credit loss reserves
or methodology for determining such reserves are inadequate.

 

(tt)         Change
in Control. The issuance of the Securities to the Purchasers as contemplated by this Agreement will not trigger any rights
under any “change of control” provision in any of the agreements to which the Company or any of its Subsidiaries is
a party, including any employment, “change in control,” severance or other compensatory agreements and any benefit
plan, which results in payments to the counterparty or the acceleration of vesting of benefits.

 

    	26

    	 

    

 

(uu)         No
Material Misstatement or Omission. None of the representations or warranties made by the Company in this Agreement, or in any
certificate furnished by the Company pursuant to this Agreement, when all such documents are read together in their entirety, contains
or will contain at the Closing Date any untrue statement of a material fact, or omits or will omit at the Closing Date any material
fact necessary in order to make the statements contained herein or therein, in the light of the circumstances under which made,
not misleading.

 

(vv)         Asset
Quality. The total amount of Non-Performing Assets of the Company and its Subsidiaries, on a consolidated basis, did not exceed
$5,900,000 as of December 31, 2013.

 

(ww)         Liquidity.
Since December 31, 2013, there has not been a material change in the Company’s and its Subsidiaries’ need for, sources
of or access to liquidity.

 

(xx)        Classified
Assets. The aggregate amount of loans of the Company and its Subsidiaries, on a consolidated basis, that are rated “substandard”,
“doubtful” or “loss” did not exceed $5,300,000 as of December 31, 2013.

 

3.2         Representations
and Warranties of the Purchasers.  Each Purchaser hereby, for itself and for no other Purchaser, represents and warrants
as of the date hereof and as of the Closing Date to the Company as follows:

 

(a)          Organization
and Qualification.  Purchaser (if an entity) is an entity duly incorporated or otherwise organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite
power and authority to own or lease and use its properties and assets and to carry on its business as currently conducted. Purchaser
(if an entity) is not in violation of any of the provisions of its certificate or articles of incorporation, bylaws or other organizational
or charter documents.  Purchaser (if an entity) is duly qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not materially
and adversely affect Purchaser’s ability to perform its obligations under this Agreement or consummate the transactions contemplated
by this Agreement on a timely basis.

 

(b)          Authorization;
Enforcement; Validity.  Purchaser (if an entity) has the requisite corporate or partnership power and authority to
enter into and to consummate the transactions contemplated by each of the Transaction Documents to which it is a party and otherwise
to carry out its obligations hereunder and thereunder. The execution and delivery of each of the Transaction Documents by Purchaser
(if an entity) to which it is a party and the consummation by it of the transactions contemplated hereby and thereby have been
duly authorized by all necessary corporate or partnership action on the part of Purchaser, and no further corporate or partnership
action is required by Purchaser or its governing body in connection therewith. Each of the Transaction Documents to which it is
a party has been (or upon delivery will have been) duly executed by Purchaser and is, or when delivered in accordance with the
terms hereof, will constitute the legal, valid and binding obligation of Purchaser enforceable against Purchaser in accordance
with its terms, except (i) as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application, (ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited
by applicable law.

 

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(c)          No
Conflicts.  The execution, delivery and performance by Purchaser of the Transaction Documents and the consummation
by Purchaser of the transactions contemplated hereby will not (assuming the accuracy of the representations and warranties of the
Company and the other Purchasers hereunder) (i) conflict with or violate any provisions of the organizational documents of
Purchaser (if an entity), (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both
would become a default) under, result in the creation of any Lien upon any of the properties or assets of Purchaser or give to
others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which Purchaser
is a party, or (iii) conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction or decree
or other restriction of any court or governmental authority to which Purchaser is subject (including federal and state securities
laws), or by which any property or asset of Purchaser is bound or affected, except in the case of clauses (ii) and (iii) above,
such as would not or reasonably be expected to, individually or in the aggregate, materially and adversely affect Purchaser’s
ability to perform its obligations under this Agreement or consummate the transactions contemplated by this Agreement on a timely
basis.

 

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

 

(e)          Purchaser
Status.  At the time Purchaser was offered the Purchased Shares, it was, and at the date hereof it is, an “accredited
investor” as defined in Rule 501(a) under the Securities Act.

 

(f)          General
Solicitation.   Purchaser is not purchasing the Purchased Shares as a result of any general solicitation or general
advertising (within the meaning of Regulation D under the Securities Act) in connection with the offer and sale of the Purchased
Shares to be purchased under this Agreement.

 

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(g)          Experience
of Such Purchaser.  Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication
and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Purchased Shares, and has so evaluated the merits and risks of such investment. Purchaser is able to bear the economic risk
of an investment in the Purchased Shares and, at the present time, is able to afford a complete loss of such investment.

 

(h)          Access
to Information.  Purchaser acknowledges that it has received and reviewed the Disclosure Materials and has been afforded
(i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the
Company concerning the terms and conditions of the offering of the Purchased Shares and the merits and risks of investing in the
Purchased Shares; (ii) access to information about the Company and the Subsidiaries and their respective financial condition,
results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense
that is necessary to make an informed investment decision with respect to Purchaser’s investment in the Purchased Shares.
Neither such inquiries nor any other investigation conducted by or on behalf of Purchaser or its representatives or counsel shall
modify, amend or affect such Purchaser’s right to rely on the truth, accuracy and completeness of the Disclosure Materials
and the Company’s representations and warranties contained in the Transaction Documents. Purchaser has not relied on any
representation or warranty in connection with the transactions contemplated by the Transaction Documents other than those contained
in the Transaction Documents.

 

(i)          Brokers
and Finders.  Other than the Placement Agent with respect to the Company, no Person will have, as a result of the
transactions contemplated by this Agreement, any valid right, interest or claim against or upon the Company or any other Purchaser
for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf
of Purchaser.  Purchaser acknowledges that it is purchasing the Purchased Shares directly from the Company and not from
the Placement Agent.

 

(j)          Independent
Investment Decision.   Purchaser has independently evaluated the merits of its decision to purchase Securities pursuant
to the Transaction Documents, and Purchaser confirms that it has not relied on the advice of any other Purchaser’s business
and/or legal counsel in making such decision. Purchaser understands that nothing in this Agreement or any other materials presented
by or on behalf of the Company to Purchaser in connection with the purchase of the Purchased Shares constitutes legal, tax or investment
advice. Purchaser has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of the Purchased Shares. Purchaser understands that the Placement Agent has acted solely
as the agent of the Company in this placement of the Purchased Shares and Purchaser has not relied on the business or legal advice
of the Placement Agent or any of its agents, counsel or Affiliates in making its investment decision hereunder, and confirms that
none of such Persons has made any representations or warranties to Purchaser in connection with the transactions contemplated by
the Transaction Documents.

 

    	29

    	 

    

 

(k)          Reliance
on Exemptions.   Purchaser understands that the Purchased Shares are being offered and sold to it in reliance on
specific exemptions from the registration requirements of U.S. federal and state securities laws and that the Company is relying
in part upon the truth and accuracy of, and such Purchaser’s compliance with, the representations, warranties, agreements,
acknowledgements and understandings of Purchaser set forth herein in order to determine the availability of such exemptions and
the eligibility of Purchaser to acquire the Purchased Shares.

 

(l)          No
Governmental Review.   Purchaser understands that no U.S. federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Purchased Shares or the fairness or suitability of the investment
in the Purchased Shares nor have such authorities passed upon or endorsed the merits of the offering of the Purchased Shares.

 

(m)          Residency.  Such
Purchaser’s residence (if an individual) or office in which its investment decision with respect to the Purchased Shares
was made (if an entity) are located at the address immediately below such Purchaser’s name on its signature page hereto.

 

(n)          Knowledge
as to Conditions.  As of the date of this Agreement, such Purchaser has no reasonable basis to believe that any regulatory
approvals, consents or statements of non-objection required or otherwise a condition to the consummation by it of the transactions
contemplated by this Agreement will not be obtained.

 

(o)          Regulatory
Approvals. Other than the Passivity Commitments a Purchaser may be required to deliver to the Federal Reserve, no notice to,
registration, declaration or filing with, exemption or review by, or authorization, order, consent or approval of, any governmental
entity, nor expiration or termination of any statutory waiting period, is necessary for the consummation by Purchaser of the transactions
contemplated by this Agreement.

 

(p)          Financial
Capability. Such Purchaser has access to funds necessary to consummate the Closing as of the date of the Closing, on the terms
and conditions contemplated by this Agreement.

 

The Company and each of the Purchasers acknowledge
and agree that no party to this Agreement has made or makes any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Article III and the Transaction Documents.

 

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ARTICLE
IV.

OTHER AGREEMENTS OF THE PARTIES

 

4.1         Transfer
Restrictions.

 

(a)          Compliance
with Laws.  Notwithstanding any other provision of this Article IV, each Purchaser covenants that it will not dispose
of the Purchased Shares other than pursuant to an effective registration statement under, and in compliance with the requirements
of, the Securities Act, or pursuant to an available exemption from, or in a transaction not subject to, the registration requirements
of the Securities Act, and in compliance with any applicable state, federal or foreign securities laws.  In connection
with any transfer of the Purchased Shares other than (i) pursuant to an effective registration statement, (ii) to the Company or
(iii) pursuant to Rule 144 (provided that the transferor provides the Company with reasonable assurances (in the form of seller
and broker representation letters) that such securities may be sold pursuant to such rule), the Company may require the transferor
thereof to provide to the Company and the Transfer Agent, at the transferor’s expense, an opinion of counsel selected by
the transferor and reasonably acceptable to the Company and the Transfer Agent (it being agreed that in-house counsel for a Purchaser
shall be reasonably acceptable to Company), the form and substance of which opinion shall be reasonably satisfactory to the Company
and the Transfer Agent, to the effect that such transfer does not require registration of such transferred Securities under the
Securities Act.  As a condition of transfer (other than pursuant to clauses (i), (ii) or (iii) of the preceding sentence),
any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights of a Purchaser
under this Agreement with respect to such transferred Securities.

 

(b)          Legends.  Certificates
evidencing the Purchased Shares shall bear any legend as required by the “blue sky” laws of any state and a restrictive
legend in substantially the following form (and, with respect to Securities held in book-entry form, the Transfer Agent will record
such a legend on the share register), until such time as they are not required under Section 4.1(c) or applicable law:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY
NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION
OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT
(PROVIDED THAT THE TRANSFEROR PROVIDES THE COMPANY WITH REASONABLE ASSURANCES (IN THE FORM OF SELLER AND BROKER REPRESENTATION
LETTERS) THAT THE SECURITIES MAY BE SOLD PURSUANT TO SUCH RULE).  NO REPRESENTATION IS MADE BY THE ISSUER AS TO THE AVAILABILITY
OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR RESALES OF THESE SECURITIES.

 

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(c)          Removal
of Legends.  Upon request of Purchaser, upon receipt by the Company of an opinion of counsel reasonably satisfactory
to the Company to the effect that such legend is no longer required under the Securities Act and applicable state laws, the Company
shall promptly cause the legend set forth above to be removed from any certificate or share register for any securities purchased
pursuant to this Agreement. 

 

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

 

4.2         Furnishing
of Information.  In order to enable Purchasers to sell the Securities under Rule 144 of the Securities Act, for a
period of one year from the Closing, the Company shall maintain the registration of the Common Stock under Section 12(b) or 12(g)
of the Exchange Act and at all times it is subject to the requirements of the Exchange Act it shall timely file (or obtain extensions
in respect thereof and file within the applicable grace period) all SEC Reports required to be filed by the Company after the date
hereof pursuant to the Exchange Act and submit electronically any interactive data files specified in Rule 144(c)(1)(ii) of the
Securities Act.  If the Company is not required to file SEC Reports pursuant to such laws, it will, for so long as the
Purchasers hold Purchased Shares or Underlying Shares, prepare and furnish to Purchasers and make publicly available the information
described in Rule 144(c)(2), if the provision of such information will allow resales of the Securities pursuant to Rule 144.

 

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

 

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

 

4.5           Securities
Laws Disclosure; Publicity.  By 9:00 a.m., New York City time, on the Closing Date, the Company shall issue one or
more press releases (collectively, the “Press Release”) reasonably acceptable to Purchasers disclosing all material
terms of the transactions contemplated hereby. On or before 9:00 a.m., New York City time, on the fourth Trading Day immediately
following the execution of this Agreement, the Company will file a Current Report on Form 8-K reasonably acceptable to Purchasers
with the Commission describing the terms of the Transaction Documents (and including as exhibits to such Current Report on Form
8-K the material Transaction Documents (including, without limitation, this Agreement and the Registration Rights Agreement)).
Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser or any Affiliate or investment
adviser of any Purchaser, or include the name of any Purchaser or any Affiliate or investment adviser of any Purchaser in any press
release or filing with the Commission (other than the Registration Statement) or any regulatory agency or Trading Market, without
the prior written consent of such Purchaser, except (i) as required by federal securities law in connection with (A) any
registration statement contemplated by the Registration Rights Agreement and (B) the filing of final Transaction Documents
with the Commission and (ii) to the extent such disclosure is required by law, at the request of the staff of the Commission
or Trading Market regulations, in which case the Company shall provide Purchasers with prior written notice of such disclosure
permitted under this subclause (ii).  Each Purchaser, severally and not jointly with the other Purchasers, covenants that
until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company, Purchaser will maintain
the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this
transaction).

 

4.6           Non-Public
Information. Except with the express written consent of a Purchaser and unless prior thereto such Purchaser shall have executed
a written agreement regarding the confidentiality and use of such information, the Company shall not, and shall cause each Subsidiary
and each of their respective officers, directors, employees and agents, not to, and each Purchaser shall not directly solicit the
Company, any of its Subsidiaries or any of their respective officers, directors, employees or agents to provide any Purchaser with
any material, non-public information regarding the Company or any of its Subsidiaries from and after the filing of the Press Release.

 

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4.7         Indemnification.

 

(a)          Indemnification
of Purchasers.  In addition to the indemnity provided in the Registration Rights Agreement, the Company will indemnify
and hold each Purchaser and its directors, officers, stockholders, members, partners, employees and agents (and any other Persons
with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each
Person who controls Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act),
and the directors, officers, stockholders, agents, members, partners or employees (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling person (each,
a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages,
costs and expenses, including all judgments, amounts paid in settlements, fines imposed by a governmental entity, court costs and
reasonable attorneys’ fees and costs of investigation that any Purchaser Party may suffer or incur as a result of (i) any
inaccuracy or breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or
in the other Transaction Documents (including any certificates delivered pursuant thereto) or (ii) any action, suit, proceeding
or investigation instituted against a Purchaser Party in any capacity, or any of them or their respective affiliates, by any Person
who is not an affiliate of such Purchaser Party (other than the Company or its controlled affiliates), with respect to any of the
transactions contemplated by this Agreement.  The Company will not be liable to any Purchaser Party under this Agreement to
the extent, but only to the extent, that a loss, claim, damage or liability is attributable to such Purchaser Party’s breach
of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other
Transaction Documents.

 

(b)          Conduct
of Indemnification Proceedings.  Promptly after receipt by any Purchaser Party (the “Indemnified
Person”) of notice of any demand, claim or circumstances which would or might give rise to a claim or the commencement
of any action, proceeding or investigation in respect of which indemnity may be sought pursuant to Section 4.7(a), such Indemnified
Person shall promptly notify the Company in writing and the Company shall assume the defense thereof, including the employment
of counsel reasonably satisfactory to such Indemnified Person, and shall assume the payment of all fees and expenses; provided,
however, that the failure of any Indemnified Person so to notify the Company shall not relieve the Company of its obligations
hereunder except to the extent that the Company is actually and materially and adversely prejudiced by such failure to notify.
In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless: (i) the Company and the Indemnified Person shall have mutually
agreed to the retention of such counsel; (ii)  the Company shall have failed promptly to assume the defense of such proceeding
and to employ counsel reasonably satisfactory to such Indemnified Person in such proceeding; or (iii) in the reasonable judgment
of counsel to such Indemnified Person, representation of both parties by the same counsel would be inappropriate due to actual
or potential differing interests between them. The Company shall not be liable for any settlement of any proceeding effected without
its written consent, which consent shall not be unreasonably withheld, delayed or conditioned. Without the prior written consent
of the Indemnified Person, which consent shall not be unreasonably withheld, delayed or conditioned, the Company shall not effect
any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party
and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release
of such Indemnified Person from all liability arising out of such proceeding.

 

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4.8           Listing
of Common Stock.  The Company will use its reasonable best efforts to list the Common Stock for quotation on the
NASDAQ Capital Market and maintain the listing of the Common Stock on the NASDAQ Capital Market.

 

4.9           Limitation
on Beneficial Ownership.  Except as provided herein, no Purchaser (and its Affiliates or any other Persons with which
it is acting in concert or whose holdings would otherwise be required to be aggregated for purposes of the BHC Act or the Change
in Bank Control Act) will be entitled to purchase a number of Securities that would result in such Purchaser becoming, directly
or indirectly, the beneficial owner (as determined under Rule 13d-3 under the Exchange Act) of more than 9.9% of the number of
shares of Common Stock issued and outstanding (based on the number of outstanding shares as of the Closing Date).

 

4.10         No
Change of Control. The Company shall use reasonable best efforts to obtain all necessary irrevocable waivers, adopt any required
amendments and make all appropriate determinations so that the issuance of the Securities to Purchasers will not trigger a “change
of control” or other similar provision in any of the agreements to which the Company or any of its Subsidiaries is a party,
including without limitation any employment, “change in control,” severance or other agreements and any benefit plan,
which results in payments to the counterparty or the acceleration of vesting of benefits.

 

4.11         Stockholders
Meeting.  The Company shall call a meeting of its stockholders to be held as promptly as practicable following the
date of this Agreement, but in no event later than one hundred and twenty (120) days following the Closing Date, to vote on a proposal
(the “Stockholder Proposals”) to approve the issuance of Common Stock and the Non-Voting Common Stock upon the
conversion of the Preferred Stock for purposes of Rule 5635 of the NASDAQ Stock Market Rules (such approval of the Stockholder
Proposal, “Stockholder Approval”).  Subject to the exercise of its fiduciary duties under Virginia
law, the Board of Directors of the Company shall recommend to the Company’s stockholders that such stockholders vote in favor
of the Stockholder Proposal.  In connection with such meeting, the Company shall promptly prepare and file (but in no
event more than twenty (20) days after the Closing Date) with the Commission a preliminary proxy statement, shall use its reasonable
best efforts to respond to any comments of the Commission or its staff with respect to the preliminary proxy statement and to cause
a definitive proxy statement related to such stockholders’ meeting to be mailed to the Company’s stockholders no later
than July 1, 2014, and shall use its reasonable best efforts to solicit proxies for such Stockholder Approval.  The
Company shall notify Purchaser promptly of the receipt of any comments from the Commission or its staff with respect to the proxy
statement and of any request by the Commission or its staff for amendments or supplements to such proxy statement or for additional
information (but the Company shall not provide any Purchaser with any material, non-public information, unless requested by such
Purchaser and pursuant to a written agreement regarding the confidentiality and use of such information).  If at any
time prior to such stockholders’ meeting there shall occur any event that is required to be set forth in an amendment or
supplement to the proxy statement, the Company shall as promptly as practicable prepare and mail to its stockholders such an amendment
or supplement.  In the event that Stockholder Approval is not obtained at such stockholder meeting, the Company shall
include a proposal to approve (and the Board of Directors shall recommend approval of) such proposal at a meeting of its stockholders
to be held no less than once in each subsequent six-month period beginning on the date of such stockholder meeting until such approval
is obtained.

 

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4.12       Confidentiality.
Each party hereto will hold, and will cause its respective Affiliates and its and their respective directors, officers, employees,
agents, consultants and advisors to hold, in strict confidence, unless disclosure to a regulatory authority is necessary in connection
with any necessary regulatory approval, examination or inspection or unless disclosure is required by judicial or administrative
process or, in the written opinion of its counsel, by other requirement of law or the applicable requirements of any regulatory
agency or relevant stock exchange, all non-public records, books, contracts, instruments, computer data and other data and information
(collectively, “Information”) concerning the other party hereto furnished to it by or on behalf of such other
party or its representatives pursuant to this Agreement (except to the extent that such information can be shown to have been (1)
previously known by such party on a non-confidential basis, (2) publicly available through no fault of such party or (3) later
lawfully acquired from other sources by such party), and neither party hereto shall release or disclose such Information to any
other person, except its auditors, attorneys, financial advisors, other consultants and advisors.

 

4.13       Governance
Matters.

 

(a)          Board
Representative. At Closing, the Company and the Bank will appoint the person nominated by the Lead Investor (the “Board
Representative”) as provided in this Section 4.13(a) to the Board of Directors, subject to satisfaction of the legal
and governance requirements regarding service as a director of the Company and to the reasonable approval of the Board of Directors
(such approval not to be unreasonably withheld or delayed). To the extent consistent with the requirement to stagger the terms
of the directors of the Company, the Company and Bank will nominate the Board Representative for election at the first annual meeting
of stockholders following the Closing to a three year term. After such appointment or election of a Board Representative, so long
as the Lead Investor beneficially owns (as determined in accordance with Rule 13d-3 under the Exchange Act) at least 5.0% or more
of the outstanding shares of Common Stock, whether acquired upon conversion of the Preferred Shares or otherwise and treating each
Preferred Share that is not a share of Common Stock as if it had converted into Common Stock, and each share of Non-Voting Common
Stock as a Share of Common Stock (a “Qualifying Ownership Interest”), the Company will be required to recommend
to its stockholders the election of such respective Lead Investor’s Board Representative at the Company’s annual meeting
of stockholders, as applicable, subject to satisfaction of the legal and governance requirements regarding service as a director
of the Company and to the reasonable approval of the Board of Directors (such approval not to be unreasonably withheld or delayed).
If at any time a Lead Investor no longer beneficially owns Qualifying Ownership Interest, such Lead Investor will have no further
rights under this Section 4.13(a), and, at the written request of the Board of Directors, shall use its reasonable best efforts
to cause its Board Representative to resign from the Board of Directors within 15 calendar days thereafter. The Lead Investor shall
inform the Company if and when it ceases to hold a Qualifying Ownership Interest.

 

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Any Board Representative (including any
successor nominee) duly selected in accordance with this Section 4.13(a) shall, subject to applicable law, be the Company’s
and the Board of Directors’ nominee to serve on the Board of Directors. The Company shall use all reasonable best efforts
to have the Board Representative elected as a director of the Company and the Company shall solicit proxies for each such person
to the same extent as it does for any of its other nominees to the Board of Directors. The Board Representative shall have the
right to attend any meetings of the committees of the Board of Directors and the Bank Board as a non-voting observer, other than
those committees that are required by the Listing Rules of the Nasdaq Stock Market to be comprised only of independent directors.

 

For only so long as the Lead Investor has
the right to nominate a Board Representative pursuant to this Section 4.13(a), such Lead Investor shall have the power to designate
the Board Representative’s replacement upon the death, resignation, retirement, disqualification or removal from office of
such director. The Board of Directors will use its reasonable best efforts to take all action required to fill the vacancy resulting
therefrom with such person (including such person, subject to applicable law, being the Company’s and the Board of Directors’
nominee to serve on the Board of Directors, using all reasonable best efforts to have such person elected as director of the Company
and the Company soliciting proxies for such person to the same extent as it does for any of its other nominees to the Board of
Directors).

 

Any Board Representative shall be entitled
to the same cash compensation and participation in Company equity plans and same indemnification in connection with his or her
role as a director as the other members of the Board of Directors, and each Board Representative shall be entitled to reimbursement
for documented, reasonable out-of-pocket expenses incurred in attending meetings of the Board of Directors or any committees thereof,
to the same extent as the other members of the Board of Directors. The Company shall notify each Board Representative of all regular
and special meetings of the Board of Directors and shall notify each Board Representative of all regular and special meetings of
any committee of the Board of Directors of which the Board Representative is a member in accordance with the Company’s bylaws
as then in effect. The Company shall provide each Board Representative with copies of all notices, minutes, consents and other
materials provided to all other members of the Board of Directors concurrently as such materials are provided to the other members.

 

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Given that certain Jointly Indemnifiable
Claims may arise due to the relationship between the Fund Entities and the Company and Bank and the service of the Board Representative
as a Director of the Company and the Bank at the request of the Fund Entities, the Company acknowledges and agrees, and shall cause
the Bank to acknowledge and agree, that the Company and the Bank shall be fully and primarily responsible for the indemnification
and advancement of expenses of the Board Representative in connection with any such Jointly Indemnifiable Claim irrespective of
any right of recovery the Board Representative may have from the Fund Entities or any of their respective Affiliates. Under no
circumstances shall the Company or the Bank be entitled to any right of contribution by the Fund Entities or any of their Affiliates
and no right of recovery the Board Representative may have from the Fund Entities or any of their respective Affiliates shall reduce
or otherwise alter the rights of the Board Representative or the obligations of the Company and the Bank to indemnify the Board
Representative. For purposes of this Section 4.13(a), (i) the term “Fund Entities” shall mean any corporation,
limited liability company, partnership, joint venture, trust, employee benefit plan or other entity or enterprise (other than the
Company, the Bank or any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan
or other entity or enterprise the Board Representative has agreed, on behalf of the Company or the Bank or at the Company’s
or at the Bank’s request, to serve as a director, officer, employee or agent of another entity from whom the Board Representative
may be entitled to indemnification or advancement of expenses with respect to which, in whole or in part, the Company and/or the
Bank may also have an indemnification or advancement obligation, and (ii) the term “Jointly Indemnifiable Claim”
shall mean any claim for which the Board Representative shall be entitled to indemnification from both any Fund Entity and the
Company and/or the Bank pursuant to applicable law, any indemnification agreement or the certificate of incorporation, bylaws,
partnership agreement, operating agreement, certificate of formation, certificate of limited partnership or comparable organizational
documents of the Company, the Bank and the Fund Entities. If the Company has entered into, or shall in the future enter into, any
indemnification agreement with any member of the Board of Directors of the Company or any Subsidiary, the Company shall give the
Board Representative the opportunity to enter into an indemnification agreement with the Company and such Subsidiary, as applicable,
with the same terms and conditions.

 

Until such time as the Board Representative
is duly appointed and elected, at all times when the Lead Investor has the right to a Board Representative as provided in this
Section 4.13(a) and otherwise upon the written request of such Lead Investor and in lieu of such Lead Investor’s nomination
of a Board Representative, such Lead Investor may appoint one individual to attend all meetings of the Board of Directors and any
committees thereof that a Board Representative would be eligible to attend (the “Observer”) and pursuant to
this Section 4.13(a) hereof the board of directors of the Bank and any committees thereof, which individual shall be reasonably
acceptable to the Board of Directors (such approval not to be unreasonably withheld or delayed); provided that the appointment
by a Lead Investor of an Observer shall not prevent such Lead Investor from nominating a Board Representative in lieu of an Observer
at a future time. The Observer shall not have any right to vote on any matter presented to the Board of Directors or any committee
thereof. Subject to compliance with regulatory requirements, the Company shall give the Observer written notice of each meeting
thereof at the same time and in the same manner as the members of the Board of Directors, shall provide the Observer with all written
materials and other information given to members of the Board of Directors at the same time such materials and information are
given to the members of the Board of Directors and shall permit the Observer to attend as an observer at all meetings thereof,
and in the event the Company proposes to take any action by written consent in lieu of a meeting, the Company shall give written
notice thereof to each Observer prior to the effective date of such consent describing the nature and substance of such action
and including the proposed text of such written consents; provided, however, that (A) the Company or the Board of
Directors shall have the right to withhold any information and to exclude the Observer from any meeting or portion thereof (1)
if doing so is, in the reasonable good faith judgment of the Company, after consultation with counsel, advisable or necessary to
protect the attorney-client privilege between the Company and counsel or (2) if the Board of Directors reasonably determines in
good faith, after consultation with counsel, that attendance by the Observer would conflict with fiduciary or regulatory requirements
under applicable law and (B) the Lead Investor shall cause its Observer to agree to hold in confidence and trust and to act in
a fiduciary manner with respect to all information provided to such Observer. The Lead Investor covenants and agrees to hold all
such information obtained from its Observer as provided in the prior sentence in confidence pursuant to the non-disclosure agreement
entered into between the Company and the Lead Investor.

 

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So long as the Lead Investor has the right
to appoint a Board Representative pursuant to this Section 4.13(a), such Lead Investor shall have the right to either nominate
one person (the “Bank Board Representative”) to be elected or appointed as director to the board of directors
of the Bank (the “Bank Board”) or until such time as the Bank Board Representative is duly elected and appointed,
to appoint one person to attend all meetings of the Bank Board and any committees thereof as an observer (the “Bank Board
Observer”); provided that if the Lead Investor chooses to have a director of both the Company and the Bank it at all
such times shall be the same individual; provided further the appointment by the Lead Investor of a Bank Board Observer shall not
prevent the Lead Investor from nominating a Bank Board Representative in lieu of a Bank Board Observer at a future time. The obligations
of the Company otherwise with respect to, and the conditions on the appointment and, if applicable, directorship of, each Bank
Board Representative and each Bank Board Observer shall be substantially the same as those with respect to or applicable to the
Board Representative and Observer, respectively.

 

The rights of the Lead Investor described
in this Section 4.13(a) shall be personal to such Lead Investor and the transfer, assignment and/or conveyance of said rights from
the Lead Investor to any other person and/or entity (other than in connection with a transfer of Securities to an Affiliate) is
prohibited and shall be void and of no force or effect.

 

(b)          Appointment
of Additional Director. Not later than May 31, 2014, the Company and the Bank will appoint David Zlatin to the Board of Directors
and the Bank Board and/or nominate him for election as a director at the Company’s 2014 annual meeting of stockholders, subject
to satisfaction of the legal and governance requirements regarding service as a director of the Company and to the reasonable approval
of the Board of Directors (such approval not to be unreasonably withheld or delayed).

 

4.14         No
Rights Agreement. The Company shall not enter into any poison pill agreement, stockholders’ rights plan or similar agreement
that shall limit the rights of a Purchaser to acquire Common Stock up to the limits set forth in Section 4.9 unless such poison
pill agreement, stockholders’ rights plan or similar agreement grants an exemption or waiver to the Purchaser immediately
effective upon execution of such plan or agreement that would allow the Purchaser to acquire such Common Stock up to the limits
set forth in Section 4.9.

 

4.15         Certain
Transactions. The Company will not merge or consolidate into, or sell, transfer or lease all or substantially all of its property
or assets to, any other party unless the successor, transferee or lessee party, as the case may be (if not the Company), expressly
assumes the due and punctual performance and observance of each and every covenant and condition of this Agreement to be performed
and observed by the Company.

 

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4.16       Corporate
Opportunities. Each of the parties hereto acknowledges that the Lead Investor and its Affiliates and related investment funds
may review the business plans and related proprietary information of any enterprise, including enterprises which may have products
or services which compete directly or indirectly with those of the Company and its Subsidiaries, and may trade in the securities
of such enterprise. Neither the Lead Investor nor any of its Affiliates or related investment funds shall be precluded or in any
way restricted from investing or participating in any particular enterprise, or trading in the securities thereof whether or not
such enterprise has products or services that compete with those of the Company and its Subsidiaries. The parties expressly acknowledge
and agree that: (a) the Lead Investor, the Board Representative, the Board Observer and the Affiliates of the Lead Investor have
the right to, and shall have no duty (contractual or otherwise) not to, directly or indirectly, engage in the same or similar business
activities or lines of business as the Company and its Subsidiaries; and (b) in the event that any Lead Investor, Board Representative,
Board Observer or any of their Affiliates acquires knowledge of a potential transaction or matter that may be a corporate opportunity
for the Company or any of its Subsidiaries, such Lead Investor, Board Representative, Board Observer or Affiliate shall have no
duty (contractual or otherwise) to communicate or present such corporate opportunity to the Company or any of its Subsidiaries,
and, notwithstanding any provision of this Agreement to the contrary, shall not be liable to the Company or any of its Subsidiaries
or any other Purchasers or stockholders of the Company for breach of any duty (contractual or otherwise) by reason of the fact
that the Lead Investor, any Affiliate thereof or related investment fund thereof, directly or indirectly, pursues or acquires such
opportunity for itself, directs such opportunity to another person, or does not present such opportunity to the Company or its
Subsidiaries.

 

4.17       Ordinary
Course of Business. Prior to the earlier of the Closing Date and the termination of this Agreement pursuant to Section 6.16,
the Company shall, and shall cause each Subsidiary to, use reasonable best efforts to carry on its business in the ordinary course
of business and to maintain and preserve its and such Subsidiary’s business (including its organization, assets, properties,
goodwill and insurance coverage) and preserve business relationships with customers, strategic partners, suppliers, distributors
and others having business dealings with it. Without limiting the generality of the foregoing, to the extent reasonably practicable,
the Company shall consult with Purchasers prior to taking any material actions outside of the ordinary course of business.

 

4.18       Gross-Up
Rights.

 

(a)          Sale
of New Securities.  If, at any time prior to the one year anniversary of the Closing Date, the Company makes any public
or nonpublic offering or sale of any equity or equity-linked security (any such security, a “New Security”)
(other than any securities issuable (i)  as consideration in a bona fide arms-length acquisition by the Company, (ii) in accordance
with the terms of any employee benefit plan approved by the Board of Directors, (iii) as part of a bona fide public offering or
(iv) at the written direction of any governmental or administrative agency, regulatory authority), then the Lead Investor and any
other Purchaser purchasing at least 4.9% of the Common Stock pursuant to this Agreement shall be afforded the opportunity to acquire
from the Company for the same price (net of any underwriting discounts or sales commissions) and on the same terms as such securities
are proposed to be offered to others, up to the amount of New Securities in the aggregate required to enable it to maintain its
proportionate Common Stock interest in the Company (including any shares of Non-Voting Common Stock) immediately prior to any such
issuance of New Securities.  The amount of New Securities that each Purchaser shall be entitled to purchase in the aggregate
shall be determined by multiplying (x) the total number or principal amount of such offered New Securities by (y) a fraction,
the numerator of which is the sum of (i) the number of shares of Common Stock held by such Purchaser, if any, and (ii) without
duplication, the number of shares of Common Stock represented by the Preferred Stock (including any shares of Non-Voting Common
Stock) held by such Purchaser on an as-converted and as-exercised basis as of such date, if any, and the denominator of which is
the sum of (i) the number of shares of Common Stock then outstanding and (ii) without duplication, the number of shares
of Common Stock represented by the Preferred Stock (including any shares of Non-Voting Common Stock) on an as-converted and as-exercised
basis as of such date. 

 

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(b)          Notice. 
In the event the Company proposes to offer or sell New Securities (the “Offering”), it shall give each Purchaser
written notice of its intention, describing the price (or range of prices), anticipated amount of securities, timing, and other
terms upon which the Company proposes to offer the same (including, in the case of a registered public offering and to the extent
possible, a copy of the prospectus included in the registration statement filed with respect to such offering), no later than ten
Business Days, as the case may be, after the initial filing of a registration statement with the Commission with respect to an
underwritten public offering, after the commencement of marketing with respect to a Rule 144A offering or after the Company
proposes to pursue any other offering.  If the information contained in the notice constitutes material non-public information
(as defined under the applicable securities laws), the Company shall deliver such notice only to the individuals identified on
such Purchaser’s signature page hereto, and shall not communicate the information to anyone else acting on behalf of such
Purchaser without the consent of one of the designated individuals. Such Purchaser shall have ten Business Days from the date of
receipt of such a notice to notify the Company in writing that it intends to exercise its rights provided in this Section 4.18
and as to the amount of New Securities such Purchaser desires to purchase, up to the maximum amount calculated pursuant to Section 4.18(a). 
Such notice shall constitute a nonbinding indication of interest of such Purchaser to purchase the amount of New Securities so
specified at the price and other terms set forth in the Company’s notice to it.  The failure of such Purchaser to respond
within such ten Business Day period shall be deemed to be a waiver of such Purchaser’s rights under this Section 4.18
only with respect to the Offering described in the applicable notice. Notwithstanding anything herein to the contrary, to the extent
that a Purchaser exercises its right to purchase the full amount of New Securities it is entitled to purchase pursuant to this
Section 4.18, the Purchaser shall have an additional option to over-subscribe and purchase all or any part of the balance of any
such remaining unsubscribed New Securities; provided that, upon completion of such purchase, Purchaser shall not own in excess
of (i) 9.9% of the Common Stock issued and outstanding or (ii) 24.9% of the Company’s total equity outstanding. The Company
shall notify the Purchaser of its over-subscription rights hereunder, and the Purchaser shall thereafter have five Business Days
following delivery of such notice to subscribe for any additional shares of New Securities on a pro-rata basis amongst any other
Purchasers that also exercised a right to purchase the full amount of New Securities such other Purchasers were entitled to purchase,
and on such additional terms and conditions as shall be determined by the Company in its reasonable discretion.

 

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(c)          Purchase
Mechanism.  If such Purchaser exercises its rights provided in this Section 4.18, the closing of the purchase of
the New Securities in connection with the closing of the Offering with respect to which such right has been exercised shall take
place within 30 calendar days after the giving of notice of such exercise, which period of time shall be extended for a maximum
of 180 days in order to comply with applicable laws and regulations (including receipt of any applicable regulatory or stockholder
approvals).  Notwithstanding anything to the contrary herein, the closing of the purchase of the New Securities by such Purchaser
will occur no earlier than the closing of the Offering triggering the right being exercised by such Purchaser. Each of the Company
and such Purchaser agrees to use its commercially reasonable efforts to secure any regulatory or stockholder approvals or other
consents, and to comply with any law or regulation necessary in connection with the offer, sale and purchase of, such New Securities.

 

(d)          Failure
of Purchase. In the event a Purchaser fails to exercise its rights provided in this Section 4.18 within said ten Business
Day period or, if so exercised, such Purchaser is unable to consummate such purchase within the time period specified in Section 4.18(c) above
because of its failure to obtain any required regulatory consent or approval, the Company shall thereafter be entitled (during
the period of 60 days following the conclusion of the applicable period) to sell or enter into an agreement (pursuant to which
the sale of the New Securities covered thereby shall be consummated, if at all, within 90 days from the date of said agreement)
to sell the New Securities not elected to be purchased pursuant to this Section 4.18 by such Purchaser or which such Purchaser
is unable to purchase because of such failure to obtain any such consent or approval, at a price and upon terms no more favorable
in the aggregate to the purchasers of such securities than were specified in the Company’s notice to such Purchaser. 
Notwithstanding the foregoing, if such sale is subject to the receipt of any regulatory or stockholder approval or consent or the
expiration of any waiting period, the time period during which such sale may be consummated shall be extended until the expiration
of five Business Days after all such approvals or consents have been obtained or waiting periods expired, but in no event shall
such time period exceed 180 days from the date of the applicable agreement with respect to such sale.  In the event the Company
has not sold the New Securities or entered into an agreement to sell the New Securities within said 60-day period (or sold and
issued New Securities in accordance with the foregoing within 90 days from the date of said agreement (as such period may be extended
in the manner described above for a period not to exceed 180 days from the date of said agreement)), the Company shall not thereafter
offer, issue or sell such New Securities without first offering such securities to such Purchaser in the manner provided above.

 

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

 

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(f)          Cooperation. 
The Company and each Purchaser shall cooperate in good faith to facilitate the exercise of such Purchaser’s rights under
this Section 4.18, including to secure any required approvals or consents.

 

(g)          No
Assignment of Rights. The rights of each Purchaser described herein shall be personal to such Purchaser and the transfer, assignment
and/or conveyance of said rights from such Purchaser to any other person and/or entity (other than an Affiliate of the Purchaser)
is prohibited and shall be void and of no force or effect.

 

4.19       Avoidance
of Control. Notwithstanding anything to the contrary in the Transaction Documents, neither the Company nor any Subsidiary
thereof shall take any action (including any redemption, repurchase, or recapitalization of Common Stock, or securities or rights,
options or warrants to purchase Common Stock, or securities of any type whatsoever that are, or may become, convertible into or
exchangeable into or exercisable for Common Stock), that would (i) cause the Lead Investor’s ownership of voting securities
of the Company (together with the ownership by the Lead Investor’s Affiliates (as such term is used under the BHC Act) of
voting securities of the Company) to increase above 4.9%, without the prior written consent of the Lead Investor, or to increase
to an amount that would constitute “control” under the BHC Act, or otherwise cause the Lead Investor to “control”
the Company under and for purposes of the BHC Act or (ii) cause any other Person’s ownership of voting securities of the
Company (together with the ownership by the other Person’s Affiliates (as such term is used under the BHC Act) of voting
securities of the Company) to increase above 9.9%, without the prior written consent of the Lead Investor, or to increase to an
amount that would constitute “control” under the BHC Act, or otherwise cause the Investor to “control”
the Company under and for purposes of the BHC Act.

 

4.20       Most
Favored Nation. During the period from the date hereof through the Closing, neither the
Company nor any of the Subsidiaries shall enter into any additional, or modify any existing, agreements with any existing or future
investors in the Company or any of the Subsidiaries that have the effect of establishing rights or otherwise benefitting such investor
in a manner more favorable in any respect to such investor than the rights and benefits established in favor of the Lead Investor
by this Agreement, unless, in any such case, the Lead Investor has been offered such rights and benefits. The Company represents
and warrants to the Lead Investor that as of the date hereof, no agreements exist with other Purchasers that have
the effect of establishing rights or otherwise benefitting such Purchasers in a manner more favorable in any respect to such Purchaser
than the rights and benefits established in favor of the Lead Investor by this Agreement.

 

ARTICLE
V.

CONDITIONS PRECEDENT TO CLOSING

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

 

    	43

    	 

    

 

(a)          Representations
and Warranties.  The representations and warranties of the Company contained herein shall be true and correct in
all material respects as of the date when made and as of the Closing Date, as though made on and as of such date, except for such
representations and warranties that speak as of a specific date, which shall be true and correct in all material respects as of
such date; provided, however, any representations or warranties qualified as to materiality or Material Adverse Effect shall
be true and correct in all respects.

 

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

 

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

 

(d)          Consents.  Except
for the Stockholder Approval, the Company shall have obtained in a timely fashion any and all consents, permits, approvals, registrations
and waivers necessary for consummation of the purchase and sale of the Purchased Shares (including all Required Approvals), all
of which shall be and remain so long as necessary in full force and effect.

 

(e)          No
Suspensions of Trading in Common Stock; Listing.  The Common Stock (i) shall be approved for quotation or listing
on the Principal Trading Market and (ii) shall not have been suspended, as of the Closing Date, by the Commission or the Principal
Trading Market from trading on the Principal Trading Market nor shall suspension by the Commission or the Principal Trading Market
have been threatened, as of the Closing Date, either (A) in writing by the Commission or the Principal Trading Market or (B) by
falling below the minimum listing maintenance requirements of the Principal Trading Market. The Company shall have obtained the
approval of the Principal Trading Market to list the Common Stock issuable upon conversion of the Preferred Stock and the Non-Voting
Common Stock, as applicable, provided that such approval may be subject to the Stockholder Approval.

 

(f)          Company
Deliverables.  The Company shall have delivered the Company Deliverables in accordance with Section 2.2(a).

 

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

 

(h)          Minimum
Gross Proceeds. The Company shall simultaneously issue and deliver at such Closing to Purchasers hereunder in the aggregate
at least sufficient Securities against payment of an aggregate Purchase Price of at least $15.0 million.

 

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

 

    	44

    	 

    

 

(j)          No
Material Adverse Effect. Since the date of this Agreement, there shall not have occurred a Material Adverse Effect.

 

(k)          Non-Performing
Assets. The total amount of Non-Performing Assets of the Company and its Subsidiaries, on a consolidated basis, shall not exceed
$5,900,000.

 

(l)          Liquidity.
Since December 31, 2013, there shall not have been a material change in the Company’s and its Subsidiaries’ need for,
sources of or access to liquidity.

 

(m)          Classified
Assets. The aggregate amount of loans of the Company and its Subsidiaries, on a consolidated basis, that are rated “substandard”,
“doubtful” or “loss” shall not exceed $5,300,000.

 

5.2         Conditions
Precedent to the Obligations of the Company to Sell the Purchased Shares.  The Company’s obligation to sell
and issue the Purchased Shares at the Closing is subject to the fulfillment to the satisfaction of the Company on or prior to the
Closing Date of the following conditions, any of which may be waived by the Company:

 

(a)          Representations
and Warranties.  The representations and warranties made by Purchaser in Section 3.2 hereof shall be true and
correct in all material respects (without giving effect to any materiality qualifications therein) as of the date when made, and
as of the Closing Date as though made on and as of such date, except for representations and warranties that speak as of a specific
date.

 

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

 

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

 

(d)          Consents.  
Purchaser shall have obtained in a timely fashion any and all consents, permits, approvals, registrations and waivers necessary
for consummation of the purchase and sale of the Purchased Shares, all of which shall be and remain so long as necessary in full
force and effect.

 

(e)          Purchasers
Deliverables.   Purchaser shall have delivered its Purchaser Deliverables in accordance with Section 2.2(b).

 

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

 

    	45

    	 

    

 

ARTICLE
VI.

MISCELLANEOUS

 

6.1         Fees
and Expenses.

 

(a)          Except
as provided in subsection (b) of this Section 6.1, the parties hereto shall be responsible for the payment of all expenses incurred
by them in connection with the preparation and negotiation of the Transaction Documents and the consummation of the transactions
contemplated hereby.  The Company shall pay all amounts owed to the Placement Agent relating to or arising out of the
transactions contemplated hereby.  The Company shall pay all Transfer Agent fees, stamp taxes and other taxes and duties
levied in connection with the sale and issuance of the Purchased Shares to the Purchasers.

 

(b)          The
Company acknowledges that the Lead Investor has expended and is expending significant time and money in connection with this Agreement.
In order to induce the Lead Investor to execute this Agreement and to expend the time and resources necessary to effect its investment
in the Securities, the Company agrees that in the event (i) Closing is completed under the terms set forth in this Agreement, or
(ii) the Closing is not consummated other than due to a breach by the Lead Investor of the terms of this Agreement, the Company
will reimburse the Lead Investor for the reasonable documented out-of-pocket expenses of the Lead Investor incurred in connection
with its due diligence and the preparation and negotiation of this Agreement and the transactions contemplated by this Agreement
including, but not limited to, the fees and expenses of counsel incurred by the Lead Investor and its affiliates in connection
with the transactions contemplated by this Agreement. Such Lead Investor expense reimbursement will not exceed $75,000 in the aggregate.

 

6.2         Entire
Agreement.  The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding
of the parties with respect to the subject matter hereof and supersede all prior agreements, understandings, discussions and representations,
oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and
schedules. At or after the Closing, and without further consideration, the Company and the Purchasers will execute and deliver
to the other such further documents as may be reasonably requested in order to give practical effect to the intention of the parties
under the Transaction Documents.

 

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

 

    	46

    	 

    

 

	 	If to the Company:	Cordia Bancorp Inc.
	 	 	11730 Hull Street Road
	 	 	Midlothian, Virginia 23112
	 	 	Attention:  Jack Zoeller, President and Chief Executive Officer
	 	 	Fax:  804.744.2306
	 	 	 
	 	With a copy to:	Kilpatrick Townsend & Stockton LLP
	 	 	607 14th Street, NW, Suite 900
	 	 	Washington, DC 20005
	 	 	Attention:  Aaron M. Kaslow, Esq.
	 	 	Fax:  202.204.5600
	 	 	 
	 	If to a Purchaser:	At the address set forth on the signature page hereto.

 

or such other address as may be designated in writing hereafter,
in the same manner, by such Person.

 

6.4           Amendments;
Waivers; No Additional Consideration.  No provision of this Agreement may be waived or amended except in a written
instrument signed, in the case of an amendment, by the Company and each of the Purchasers affected by such amendment or, in the
case of a waiver, by the party against whom enforcement of any such waiver is sought. No waiver of any default with respect to
any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of
either party to exercise any right hereunder in any manner impair the exercise of any such right. No consideration shall be offered
or paid to any Purchaser to amend or consent to a waiver or modification of any provision of any Transaction Document unless the
same consideration is also offered to all Purchasers who then hold the Purchased Shares or Underlying Shares.

 

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

 

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

 

    	47

    	 

    

 

6.7           No
Third-Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective
successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person,
other than Indemnified Persons.

 

6.8           Governing
Law.  All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall
be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all Proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party
hereto or its respective Affiliates, employees or agents) may be commenced on a non-exclusive basis in the United States District
Court for the Southern District of New York sitting in the borough of Manhattan, New York. Each party hereto hereby irrevocably
submits to the non-exclusive jurisdiction of the United States District Court for the Southern District of New York for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with
respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any
Proceeding, any claim that it is not personally subject to the jurisdiction of the United States District Court for the Southern
District of New York, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby
irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof
via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH
PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

6.9           Survival.  Subject
to applicable statute of limitations, the representations, warranties, agreements and covenants contained herein shall survive
the Closing and the delivery of the Purchased Shares.

 

6.10         Execution.  This
Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood
that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, or
by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page
were an original thereof.

 

    	48

    	 

    

 

6.11         Severability.  If
any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree
upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Agreement.

 

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

 

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

 

6.14         Payment
Set Aside.  To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction
Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement
or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from,
disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person
under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action),
then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

 

    	49

    	 

    

 

6.15        Independent
Nature of Purchasers’ Obligations and Rights.  The obligations of each Purchaser under any Transaction Document
are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the
performance of the obligations of any other Purchaser under any Transaction Document.  The decision of each Purchaser
to purchase Securities pursuant to the Transaction Documents has been made by such Purchaser independently of any other Purchaser
and independently of any information, materials, statements or opinions as to the business, affairs, operations, assets, properties,
liabilities, results of operations, condition (financial or otherwise) or prospects of the Company or any Subsidiary which may
have been made or given by any other Purchaser or by any agent or employee of any other Purchaser, and no Purchaser and any of
its agents or employees shall have any liability to any other Purchaser (or any other Person) relating to or arising from any such
information, materials, statement or opinions.  Nothing contained herein or in any Transaction Document, and no action
taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the Transaction Documents.  Each Purchaser acknowledges
that no other Purchaser has acted as agent for such Purchaser in connection with making its investment hereunder and that no Purchaser
will be acting as agent of such Purchaser in connection with monitoring its investment in the Securities or enforcing its rights
under the Transaction Documents.  Each Purchaser shall be entitled to independently protect and enforce its rights, including
without limitation the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary
for any other Purchaser to be joined as an additional party in any proceeding for such purpose.

 

6.16        Termination.  

 

(a)          This
Agreement may be terminated and the sale and purchase of the Purchased Shares may be abandoned at any time prior to the Closing
by either the Company or any Purchaser (with respect to itself only) as follows:

 

(i)          by
mutual written agreement of the Company and Purchaser;

 

(ii)         by
the Company or Purchaser, upon written notice to the other party, in the event that any governmental entity shall have issued any
order, decree or injunction or taken any other action restraining, enjoining or prohibiting any of the transactions contemplated
by this Agreement, and such order, decree, injunction or other action shall have become final and nonappealable;

 

(iii)        by
Purchaser, upon written notice to the Company, if there has been a breach of any representation, warranty, covenant or agreement
made by the Company in this Agreement, or any such representation or warranty shall have become untrue after the date of this Agreement,
in each case such that a closing condition in Section 5.1(a) or 5.1(b) would not be satisfied;

 

(iv)        by
the Company, upon written notice to Purchaser, if there has been a breach of any representation, warranty, covenant or agreement
made by Purchaser in this Agreement, or any such representation or warranty shall have become untrue after the date of this Agreement,
in each case such that a closing condition in Section 5.2(a) or 5.2(b) would not be satisfied; or

 

(v)         by
the Company or Purchaser, upon written notice to the other party, if the Closing has not been consummated on or prior to 5:00 p.m.,
New York City time, on the date of this Agreement; provided, however, that the right to terminate this Agreement under this Section
6.16(a)(vi) shall not be available to any party whose failure to comply with its obligations under this Agreement has been the
cause of or resulted in the failure of the Closing to occur on or before such time.

 

    	50

    	 

    

 

(b)          The
Company shall give prompt notice of any such termination to each other Purchaser, and, if necessary, work in good faith to restructure
the transaction to allow each Purchaser that does not exercise a termination right to purchase the full number of securities set
forth below such Purchaser’s name on the signature page of this Agreement while remaining in compliance with Section 4.19.

 

(c)          Nothing
in this Section 6.16 shall be deemed to release any party from any liability for any breach by such party of the terms and
provisions of this Agreement or the other Transaction Documents or to impair the right of any party to compel specific performance
by any other party of its obligations under this Agreement or the other Transaction Documents.

 

(d)          In
the event of any termination of this Agreement as provided in Section 6.16, this Agreement (other than Section 4.11 and Article
VI, which shall remain in full force and effect) shall forthwith become wholly void and of no further force and effect; provided
that nothing herein shall relieve any party from liability for intentional breach of this Agreement. Upon a termination in accordance
with this Section 6.16, no Purchaser will have any liability to any other Purchaser under the Transaction Documents as a result
therefrom.

 

6.17         Rescission
and Withdrawal Right.  Notwithstanding anything to the contrary contained in (and without limiting any similar provisions
of) the Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document
and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind
or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election
in whole or in part without prejudice to its future actions and rights.

 

6.18         Adjustments
in Stock Numbers and Prices. In the event of any stock split, subdivision, dividend or distribution payable in shares of Common
Stock (or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly shares
of Common Stock), combination or other similar recapitalization or event occurring after the date hereof and prior to Closing,
each reference in any Transaction Document to a number of shares or a price per share shall be deemed to be amended to appropriately
account for such event.

 

6.19         No
Recourse. Each party hereto covenants, agrees and acknowledges that no person other than Purchaser has obligations hereunder
and that no person shall have any remedy, recourse or right of recovery against, or contribution from, any of Purchaser Related
Party, whether through Purchaser or otherwise, by the enforcement of any assessment or by any legal or equitable proceeding, by
virtue of any statute, regulation or applicable law, by or through a claim by or on behalf of Purchaser against any Purchaser Related
Party, or otherwise. The term “Purchaser Related Party” means (1) any Affiliate of Purchaser, (2) any former,
current or future general or limited partners, members, managers, stockholders, holders of any equity, partnership or limited liability
company interest, officers, directors, employees, agents, controlling persons, investment advisors, or assignees of Purchaser or
any of its Affiliates, or (3) any former, current or future general or limited partners, members, managers, stockholders, holders
of any equity, partnership or limited liability company interest, officers, directors, employees, agents, controlling persons,
assignees, investment advisors or Affiliates of any of the foregoing.

 

[Remainder of page intentionally blank]

 

    	51

    	 

    

 

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

 

	 	CORDIA BANCORP INC.
	 	 
	 	/s/ Jack Zoeller
	 	By:  Jack Zoeller
	 	Its:  President and Chief Executive Officer

  

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

[SIGNATURE
PAGES FOR PURCHASERS FOLLOW]

 

    	 

    	 

    

 

Signature
Page to Securities Purchase Agreement

 

	 	 	 
	
        Name of Purchaser (Person or entity in whose name the
shares will be registered)

         

         
	 	Address for notice:
	
        Name and title of authorized officer

        (if subscriber is a business entity)

         

         
	 	Street
	Signature	 	City                    State                    Zip
	 	 	 
	SSN/Tax ID No.:	 	Attn:
	 	 	 
	 	 	Phone No.:
	 	 	 
	 	 	Fax No.:
	 	 	 
	 	 	E-mail address:

 

	 	x  $42,500	  =  $
	Number of Shares 

Subscribed For	 	Total Purchase Price

 

	Delivery Instructions, if different from above:	c/o  ________________________________ 
	 	 
	 	Street: ______________________________
	 	 
	 	City/State/Zip: _______________________  
	 	 
	 	Attention: ___________________________ 
	 	 
	 	Telephone No.: _______________________ 

 

    	 

    	 

    

 

EXHIBIT INDEX

 

	Exhibit A	-	Preferred Stock Designation
	Exhibit B	-	Non-Voting Articles of Amendment
	Exhibit C	-	Registration Rights Agreement
	Exhibit D	-	Voting Agreement
	Exhibit E	-	Legal Opinion
	Exhibit F	-	Secretary’s Certificate
	Exhibit G	-	Closing Officers Certificate

 

    	 

    	 

    

 

EXHIBIT A 

 

Preferred Stock
Designation

 

Article III 

 

Section E.          Mandatorily
Convertible, Noncumulative, Nonvoting, Perpetual Preferred Stock, Series A 

 

1.          Designation.
There is created hereby from the Corporation’s authorized, undesignated and unissued shares of Preferred Stock, a series
of Preferred Stock designated as the “Mandatorily Convertible, Noncumulative, Nonvoting, Perpetual Preferred Stock, Series
A”, $0.01 par value per share (the “Series A Preferred Stock”).

 

2.          Number
of Shares. The total number of authorized shares of Series A Preferred Stock shall be 363 shares, which may from time to time
be increased or decreased (but not below the number then outstanding) by the Corporation’s Board of Directors.

 

3.          Definitions.
As used herein, the following terms shall have the meanings specified below:

 

“Affiliate” of any Person
means any other Person controlling, controlled by or under common control with such particular person or entity. The term “control”
(including the terms “controlling”, “controlled” and “under common control with”) as used with
respect to any Person means the possession, direct or indirect, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

 

“Applicable Conversion Limits”
has the meaning set forth in Section 5(a)(i)(B).

 

“Articles” means the
Corporation’s Articles of Incorporation, as amended.

 

“Average VWAP” means
the average of the VWAP for each Trading Day in the relevant period.

 

“BHC Act” means the federal
Bank Holding Company Act of 1956, as amended, and the Federal Reserve regulations thereunder.

 

“BHC Affiliates” means,
with respect to any Person, its Affiliates, all of its “affiliates” as defined in the BHC Act or Regulation Y of the
Federal Reserve, and any other Persons designated by such Person as BHC Affiliates of such Person solely for purposes of this Article
III Section E.

 

“Board” or “Board
of Directors” means the Corporation’s board of directors or, with respect to any action to be taken by such board
of directors, any committee of the board of directors duly authorized to take such action.

 

“Business Day” means
any day, other than a Saturday or a Sunday, that is neither a legal holiday nor a day on which banking institutions in New York,
New York or Richmond, Virginia are authorized or required by law, regulation or executive order to close.

 

“CIBC Act” means the
federal Change in Bank Control Act, as amended, and the Federal Reserve regulations thereunder.

 

“Common Stock” means
the common stock, par value $0.01 per share, of the Corporation.

 

“Conversion” has the
meaning set forth in Section 5(a)(1).

 

“Conversion Date” has
the meaning set forth in Section 5(a)(1).

 

“Conversion Price” means
the Liquidation Amount per share of Series A Preferred Stock divided by the Conversion Rate then in effect. The initial Conversion
Price is $4.25.

 

“Conversion Rate” means,
initially, 10,000 shares of Common Stock per share of Series A Preferred Stock issuable upon a Conversion, based on an initial
Conversion Price of $4.25 per share of Common Stock, and is subject to adjustment as provided herein. To the extent any Holder
of Series A Preferred Stock receives any shares of Nonvoting Common Stock upon a Conversion, such Holder shall receive, initially
10,000 shares of Nonvoting Common Stock per share of Series A Preferred Stock, based on an initial Conversion Price of $4.25 per
share of Nonvoting Common Stock, and is subject to adjustment as provided herein.

 

    	A-1

    	 

    

  

“Corporation” has the
meaning set forth in the preamble.

 

“Current Market Price”
of the Common Stock on any day, means the Average VWAP of the Common Stock for the 10 consecutive Trading Days ending on the earlier
of the day in question and the day before the ex-date or other specified date with respect to the issuance or distribution requiring
such computation, appropriately adjusted to take into account the occurrence during such period of any event described in clauses
(i) through (vi) of Section 6(d). For purposes of this definition, “ex-date” means the first date on which the
shares of the Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive
an issuance or distribution.

 

“Depositary” means DTC
or its nominee, Cede & Co., or any successor appointed by the Corporation.

 

“Dividend Payment Date”
means June 15 and December 15 of each year, commencing June 15, 2014.

 

“Dividend Payment Commencement
Date” means August 7, 2014.

 

“Dividend Period” means
the period commencing on and including a Dividend Payment Date (or, with respect to the first Dividend Period, commencing on and
including the Issue Date) and ending on and including the day immediately preceding the next succeeding Dividend Payment Date.

 

“DTC” means The Depository
Trust Company.

 

“Electing Share” has
the meaning set forth in Section 7(a).

 

“Exchange Property” has
the meaning set forth in Section 7(a).

 

“Expiration Date” has
the meaning set forth in Section 6(d)(vi).

 

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

 

“Holder” means the Person
in whose name the shares of the Series A Preferred Stock are registered, which may be treated by the Corporation and the Transfer
Agent as the absolute owner of the shares of Series A Preferred Stock for the purpose of making payment and settling conversions
and for all other purposes.

 

“Issue Date” means the
first date of issuance of shares of Series A Preferred Stock.

 

“Junior Stock” means
the Common Stock, the Nonvoting Common Stock and any other class or series of capital stock of the Corporation (including Preferred
Stock of any other series) issued in the future, unless the terms of which expressly provide that it ranks senior to, or on a parity
with, Series A Preferred Stock as to dividend rights and/or as to rights on liquidation, dissolution or winding up of the Corporation.

 

“Liens” has the meaning
set forth in Section 8(b).

 

“Liquidation Amount”
means, initially, $42,500 per share of Series A Preferred Stock (as subsequently adjusted for any split, subdivision, combination,
consolidation, recapitalization or similar event with respect to the Series A Preferred Stock).

 

“Liquidation Preference”
has the meaning set forth in Section 10(a).

 

    	A-2

    	 

    

 

“Market Disruption Event”
means any of the following events has occurred: (i) any suspension of, or limitation imposed on, trading by the SEC or the relevant
exchange or quotation system during any period or periods aggregating one half-hour or longer and whether by reason of movements
in price exceeding limits permitted by the SEC or relevant exchange or quotation system or otherwise relating to the Common Stock
or in futures or option contracts relating to the Common Stock on the relevant exchange or quotation system, (ii) any event (other
than a failure to open or a closure as described below) that disrupts or impairs the ability of market participants during any
period or periods aggregating one half-hour or longer in general to effect transactions in, or obtain market values for, the Common
Stock on the relevant exchange or quotation system or futures or options contracts relating to the Common Stock on any relevant
exchange or quotation system, or (iii) the failure to open of the exchange or quotation system on which the Common Stock or futures
or options contracts relating to the Common Stock are traded or the closure of such exchange or quotation system prior to its respective
scheduled closing time for the regular trading session on such day (without regard to after hours or other trading outside the
regular trading session hours), unless such earlier closing time is announced by such exchange or quotation system at least one
hour prior to the earlier of the actual closing time for the regular trading session on such day and the submission deadline for
orders to be entered into such exchange or quotation system for execution at the actual closing time on such day.

 

“Nasdaq” means the Nasdaq
Capital Market or other Nasdaq market in which the Corporation’s Common Stock is then traded.

 

“Nonvoting Common Stock”
means, as and when authorized by the Corporation, the nonvoting common stock, par value $0.01 per share, of the Corporation, which
security is identical to the Common Stock in all respects, except that it has no voting rights other than as may be required by
the Virginia Stock Corporation Act.

 

“Notice of Conversion”
has the meaning set forth in Section 5(b).

 

“Parity Stock” means
any class or series of capital stock of the Corporation (other than the Series A Preferred Stock) authorized in the future, the
terms of which expressly provide that such class or series will rank on a parity with Series A Preferred Stock as to dividend rights
and/or as to rights on liquidation, dissolution or winding up of the Corporation (in each case without regard to whether dividends
accrue cumulatively or noncumulatively).

 

“Permitted Transfer”
means a transfer of Series A Preferred Stock by any Holder: (i) in a widespread public distribution; (ii) in which no transferee
(or group of associated transferees) would receive two percent (2%) or more of any class of Voting Securities of the Corporation;
or (iii) to a transferee that would control more than fifty percent (50%) of the Voting Securities of the Corporation without any
transfer from the Holder.

 

“Person” means a legal
person, including any individual, corporation, estate, partnership, joint venture, association, joint-stock company, limited liability
company or trust.

 

“Preferred Stock” means
any and all series of the Corporation’s preferred stock, including the Series A Preferred Stock.

 

“Purchased Shares” has
the meaning set forth in Section 6(d)(vi).

 

“Record Date” means,
(i) with respect to payment of dividends on outstanding shares of Series A Preferred Stock pursuant to the first sentence of Section
4(a), the 1st calendar day of the month in which the relevant Dividend Payment Date occurs or such other record date fixed by the
Board of Directors that is not more than 60 nor less than 10 days prior to such Dividend Payment Date, (ii) for purpose of an adjustment
to the Conversion Rate pursuant to Section 6, with respect to any dividend, distribution or other transaction or event in which
the holders of Common Stock have the right to receive any cash, securities or other property or in which the Common Stock (or other
applicable security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for
determination of holders of the Common Stock entitled to receive such cash, securities or other property (whether such date is
fixed by the Board of Directors or by statute, contract or otherwise), and (iii) any other record date established by the Board
of Directors for dividends on Common Stock.

 

“Record Holder” means,
as to any day, the Holder of record of outstanding shares of Series A Preferred Stock as they appear on the stock register of the
Corporation or its Transfer Agent at the close of business on such day.

 

“Reorganization Effective Time”
has the meaning set forth in Section 7(a).

 

“Reorganization Event”
has the meaning set forth in Section 7(a).

 

“Scheduled Holder” means
TNH Financial Fund, L.P. and Ramat Securities, Ltd.

 

“SEC” means the United
States Securities and Exchange Commission.

 

    	A-3

    	 

    

  

“Series A Preferred Stock”
has the meaning set forth in Section 1.

 

“Series A Preferred Stock Certificate”
has the meaning set forth in Section 20.

 

“Shareholder Approval”
means approval by the Corporation’s shareholders necessary to approve the issuance of Common Stock and Nonvoting Common Stock
upon conversion of the Series A Preferred Stock for purposes of Rule 5635 of the Nasdaq Listing Rules.

 

“Spin-Off” has the meaning
set forth in Section 6(d)(iv)(B).

 

“Trading Day” means any
day on which (i) there is no Market Disruption Event and (ii) the Nasdaq is open for trading, or, if the Common Stock (or any other
securities, cash or other property into which shares of the Series A Preferred Stock becomes convertible in connection with any
Reorganization Event) is not listed on the Nasdaq, any day on which the principal national securities exchange or trading system
on which the Common Stock (or such other property) is listed or traded is open for trading, or, if the Common Stock (or such other
property) is not listed on a national securities exchange or traded on a trading system, any Business Day. A “Trading
Day” only includes those days that have a scheduled closing time of 4:00 P.M. Eastern Time or the then standard closing
time for regular trading on the relevant exchange or trading system.

 

“Transfer Agent” means,
initially, Registrar and Transfer Company, and any successor transfer agent as provided in Section 19. The Transfer Agent shall
also be the registrar for the Series A Preferred Stock.

 

“U.S. Alien Holder” means
a Holder that is not treated as a United States person for U.S. federal income tax purposes as defined under Section 7701(a)(30)
of the Internal Revenue Code of 1986, as amended from time to time.

 

“Voting Ownership Interest”
means, with respect to any particular date and with respect to any Holder, the percentage of any class of Voting Securities of
the Corporation deemed to be owned or controlled by the Holder (when aggregated with its BHC Affiliates) for purposes of, and in
accordance with, the BHC Act and its implementing regulations and guidance.

 

“Voting Securities” has
the meaning set forth in the BHC Act and any rules and regulations promulgated thereunder.

 

“VWAP” means, on any
Trading Day the volume weighted average price per share of the Common Stock as displayed on Bloomberg (or any successor service)
in respect of the period from 9:30 A.M. to 4:00 P.M., Eastern Time, on such Trading Day; or, if such price is not available, the
volume weighted average price means the market value per share of the Common Stock on such trading day as determined by a nationally
recognized independent investment banking firm retained by the Corporation for this purpose.

 

4.           Dividends.

 

(a)          Holders
of outstanding shares of Series A Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors
out of Corporation funds legally available therefor, noncumulative dividends in arrears, payable semi-annually on each Dividend
Payment Date beginning on the Dividend Payment Commencement Date until the Conversion Date, at the following respective rates during
each of the following respective periods (each rate expressed as an annual rate on the applicable per share Liquidation Amount):

 

(i)          5.0%
per annum for the Dividend Period beginning on the Issue Date;

 

(ii)         7.0%
per annum for the Dividend Period beginning on the first Dividend Payment Date; and

 

(iii)        9.0%
per annum for the dividends accruing during all Dividend Periods beginning on or after the third Dividend Payment Date.

 

Following the Conversion Date, no dividends
shall be payable or shall accrue on outstanding shares of Series A Preferred Stock. If any Dividend Payment Date is not a Business
Day, the dividend payable on such date shall be paid on the next succeeding Business Day without adjustment and without interest.
Accumulations of dividends on shares of Series A Preferred Stock shall not bear interest. Dividends payable for any period other
than a full Dividend Period (based on the number of actual days elapsed during the period) shall be computed on the basis of days
elapsed over a 360-day year consisting of twelve 30-day months.

 

    	A-4

    	 

    

 

(b)          Dividends
on the Series A Preferred Stock are not cumulative. To the extent that the Corporation’s Board of Directors does not declare
and pay dividends on the Series A Preferred Stock for a Dividend Period prior to the related Dividend Payment Date, in full or
otherwise, such unpaid dividend shall not accrue and shall not be payable. The Corporation shall have no obligation to pay dividends
for such Dividend Period after the Dividend Payment Date for such Dividend Period or to pay interest (or any other sum of money
in lieu of interest) with respect to such scheduled, but missed dividends, whether or not the Corporation declares dividends on
the Series A Preferred Stock for any subsequent Dividend Period.

 

(c)          So
long as any share of Series A Preferred Stock remains outstanding, no dividend or distribution shall be declared or paid upon,
or any sum set apart for the payment of dividends upon, the Common Stock or any other shares of Junior Stock (other than dividends
payable solely in shares of Common Stock) or Parity Stock, and no Common Stock, Junior Stock or Parity Stock shall be, directly
or indirectly, purchased, redeemed or otherwise acquired for consideration by the Corporation or any of its subsidiaries unless
all dividends on all outstanding shares of the Series A Preferred Stock for any Dividend Period have been declared and paid in
full (or have been declared and a sum sufficient for the payment thereof has been set aside for the benefit of the Holders of shares
of Series A Preferred Stock on the applicable Record Date). The foregoing limitation shall not apply to (i) any dividends or distributions
of rights or Junior Stock in connection with a shareholders’ rights plan or any redemption or repurchase of rights pursuant
to any shareholders’ rights plan; and (ii) the acquisition by the Corporation or any of its subsidiaries of record ownership
in Junior Stock or Parity Stock for the beneficial ownership of any other persons (other than for the beneficial ownership by the
Corporation or any of its subsidiaries), including as trustees or custodians.

 

(d)          When
dividends are not paid (or declared and a sum sufficient for payment thereof set aside for the benefit of the Holders thereof on
the applicable Record Date) on any Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different
from the Dividend Payment Dates, on a dividend payment date falling within a Dividend Period related to such Dividend Payment Date)
in full upon shares of Series A Preferred Stock and any shares of Parity Stock, all dividends declared on shares of Series A Preferred
Stock and all such Parity Stock and payable on such Dividend Payment Date (or, in the case of Parity Stock having dividend payment
dates different from the Dividend Payment Dates, on a dividend payment date falling within the Dividend Period related to such
Dividend Payment Date) shall be declared pro rata so that the respective amounts of such dividends declared shall bear the
same ratio to each other as full dividends payable on the Series A Preferred Stock for such Dividend Period and all Parity Stock
payable on such Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend
Payment Dates, on a dividend payment date falling within the Dividend Period related to such Dividend Payment Date) (subject to
the dividends being declared by the Board of Directors out of legally available funds and including, in the case of Parity Stock
that bears cumulative dividends, all accrued but unpaid dividends) bear to each other. If the Board of Directors determines not
to pay any dividend or a full dividend on a Dividend Payment Date, the Corporation will provide written notice to the Holders of
shares of Series A Preferred Stock prior to such Dividend Payment Date.

 

(e)          If
the Conversion Date is on or prior to the Dividend Payment Commencement Date, no Holder of shares of Series A Preferred Stock will
have any right to receive any dividends on the Series A Preferred Stock with respect to such Dividend Period, whether upon the
Conversion or otherwise.

 

(f)          All
dividends on shares of Series A Preferred Stock shall be paid solely in cash.

 

(g)          Prior
to the Conversion Date, shares of Common Stock and, as applicable, shares of Nonvoting Common Stock, issuable upon such Conversion
shall not be deemed outstanding for any purpose, and Holders of shares of Series A Preferred Stock shall have no rights as holders
or otherwise with respect to the Common Stock or, if applicable, Nonvoting Common Stock (including voting rights, rights to respond
to tender offers for the Common Stock and rights to receive any dividends or other distributions on the Common Stock or Nonvoting
Common Stock other than as expressly set forth in Section 4(a)) by virtue of holding shares of Series A Preferred Stock.

  

    	A-5

    	 

    

 

5.           Mandatory
Conversion; Conversion Procedures; Permitted Transfers. 

 

(a)          Mandatory
Conversion; Limitations on Beneficial Ownership.

 

(i)          Effective
as of the close of business on the Business Day on which the Shareholder Approval is received (the “Conversion Date”),
all shares of Series A Preferred Stock shall, without any action by the Holders, automatically convert into the number of shares
of Common Stock and, as applicable, shares of Nonvoting Common Stock, as set forth below (the “Conversion”).
The number of shares of Common Stock into which a share of Series A Preferred Stock shall be convertible shall be determined by
dividing the Liquidation Amount by the Conversion Price (subject to the conversion procedures of Section 6 hereof) plus cash in
lieu of fractional shares in accordance with Section 9 hereof; provided, however, that if such conversion would result
in: 

 

(A)         except
as provided by Section 5(a)(iii), a Holder, together with all BHC Affiliates of the Holder, owning or controlling in the aggregate
a Voting Ownership Interest of 10.0% or more, excluding for the purpose of this calculation any reduction in ownership resulting
from transfers by such Holder and its BHC Affiliates of Voting Securities of the Corporation (the “Conversion Limit”);
or

 

(B)         a
Scheduled Holders, together with all BHC Affiliates of the Scheduled Holder, owning or controlling in the aggregate a Voting Ownership
Interest of 5.0% or more, excluding for the purpose of this calculation any reduction in ownership resulting from transfers by
the Scheduled Holder and its BHC Affiliates of Voting Securities of the Corporation (such limit, with the Conversion Limit, the
“Applicable Conversion Limits”),

 

then such Holder shall receive the minimum number of shares
of Nonvoting Common Stock, in lieu of an equal number of shares of Common Stock, such that the Holder will not exceed any Applicable
Conversion Limits.

 

(ii)         Upon
the Conversion Date, each Series A Preferred Stock Certificate shall represent solely the right to receive (A) a certificate representing
the number of shares of Common Stock issuable upon the Conversion Date for the shares of Series A Preferred Stock formerly represented
by each such Series A Preferred Stock Certificate, and (B) if applicable, a certificate representing the number of shares of Nonvoting
Common Stock issuable upon the Conversion Date for the shares of Series A Preferred Stock formerly represented by each such Series
A Preferred Stock Certificate, in each case upon proper surrender of such Series A Preferred Stock Certificate to the Corporation
or cancellation of such book entries on the Corporation’s or its Transfer Agent’s records, as applicable.

 

(b)          Upon
the Conversion, the Corporation shall provide promptly, but in any event within five (5) Business Days thereafter, notice to each
Holder (such notice a “Notice of Conversion”). In addition to any information required by applicable law or
regulation, the Notice of Conversion with respect to such Holder shall state, as appropriate:

 

(i)          the
Conversion Date;

 

(ii)         a
form of letter of transmittal to be completed and returned to the Transfer Agent;

 

(iii)        the
number of shares of Common Stock and, as applicable, Nonvoting Common Stock (plus cash in lieu of fractional shares, if any pursuant
to Section 9) receivable upon such Conversion for each share of Series A Preferred Stock held of record by such Holder upon such
Conversion; and

 

(iv)         the
place or places where Series A Preferred Stock Certificates (if held in certificated form) held of record by such Holder are to
be surrendered for issuance of certificates representing shares of Common Stock and, if applicable, Nonvoting Common Stock.

 

(c)          Upon
receipt by the Transfer Agent of a completed and duly executed letter of transmittal as contemplated by Section 5(b), and proper
surrender of the Series A Preferred Stock Certificate (if held in certificated form), the Corporation shall, within two (2) Business
Days following notification from the Transfer Agent of the proper surrender of such Series A Preferred Stock Certificate, instruct
the Transfer Agent to (i) issue a certificate for that number of shares of Common Stock issuable upon Conversion of the shares
of Series A Preferred Stock represented by such certificate, and (ii) if applicable, a certificate representing the number of shares
of Nonvoting Common Stock issuable upon Conversion.

 

    	A-6

    	 

    

 

(d)          No
transfer of shares of Series A Preferred Stock by a Holder to a transferee shall be permitted, except (i) in a Permitted Transfer,
or (ii) to a BHC Affiliate of such Holder.

 

6.           Certain
Conversion Procedures and Adjustments. 

 

(a)          On
the Conversion Date, the Series A Preferred Stock converted shall no longer be outstanding, and dividends shall no longer accrue,
be declared or paid on any shares of Series A Preferred Stock converted for the current Dividend Period and any prior Dividend
Periods and, in each case, subject to the right of Holders of such shares to receive solely (i) the number of shares of Common
Stock and, if applicable, Nonvoting Common Stock into which such shares of Series A Preferred Stock are convertible, and (ii) payments,
if any, to which such Holders are entitled pursuant to Sections 5 and 9, as applicable.

 

(b)          Shares
of Series A Preferred Stock duly converted in accordance herewith, or otherwise reacquired by the Corporation, shall resume the
status of authorized and unissued Preferred Stock, undesignated as to series and available for future issuance, provided that
any such cancelled shares of Series A Preferred Stock may be reissued only as shares of any series of Preferred Stock other than
Series A Preferred Stock.

 

(c)          The
Record Holder of the Series A Preferred Stock converted shall be solely entitled to receive the Common Stock and, if applicable,
Nonvoting Common Stock, and/or cash, securities or other property, if any, issuable upon the Conversion, and, prior to the Conversion,
shall not be treated for any purpose as the Record Holder(s) of such shares of Common Stock, Nonvoting Common Stock, and/or other
securities. No shares of Common Stock or, if applicable, Nonvoting Common Stock, issuable upon the Conversion shall be issued to
a Person other than the respective Record Holders of shares of Series A Preferred Stock.

 

(d)          The
Conversion Rate shall be adjusted from time to time as follows, and, if required hereby, any references to Common Stock shall also
apply to shares of Nonvoting Common Stock in the same manner, and all references to Common Stock in this Section 6 shall mean and
include shares of Nonvoting Common Stock issuable upon Conversion of Series A Preferred Stock at the respective times set forth
below.

 

(i)          Stock
Dividends and Distributions. If the Corporation issues Common Stock as a dividend or distribution on the Common Stock to all
holders of the Common Stock (other than in connection with a Reorganization Event), or if the Corporation effects a share split
or share combination of the Common Stock, the Conversion Rate will be adjusted based on the following formula:

 

	 CR1	 	=	 	CR0 × [OS1 /OS0]
	 	 	 	 	 
	where	 	 	 	 
	 	 	 	 	 
	CR0	 	=	 	the Conversion Rate in effect at the close of business on the Record Date
	 	 	 	 	 
	CR1	 	=	 	the new Conversion Rate in effect immediately after the Record Date
	 	 	 	 	 
	OS0	 	=	 	the number of shares of Common Stock outstanding at the close of business on the Record Date prior to giving effect to such event
	 	 	 	 	 
	OS1	 	=	 	the number of shares of Common Stock that would be outstanding immediately after, and solely as a result of, such event.

 

Any adjustment made pursuant to this clause (i) shall become
effective on the date that is immediately after (x) the Record Date or (y) the date on which such split or combination becomes
effective, as applicable. If any dividend or distribution described in this clause (i) is declared but not so paid or made, the
new Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if such dividend or distribution had
not been declared.

 

(ii)         Issuance
of Stock Purchase Rights.  If the Corporation issues to all holders of Common Stock any
rights, warrants, options or other securities (other than rights issued pursuant to a shareholder rights plan or rights or warrants
issued in connection with a Reorganization Event) entitling them for a period of not more than 60 days after the date of issuance
thereof to subscribe for or purchase shares of Common Stock, or if the Corporation issues to all holders of Common Stock securities
convertible into Common Stock for a period of not more than 60 days after the date of issuance thereof, in either case at an exercise
price per share of Common Stock or a conversion price per share of Common Stock less than the Current Market Price of the Common
Stock on the Record Date, the Conversion Rate will be adjusted based on the following formula:

 

    	A-7

    	 

    

 

	CR1	 	=	 	CR0 × [(OS0 + X) / (OS0 + Y)]
	 	 	 	 	 
	where	 	 	 	 
	 	 	 	 	 
	CR0	 	=	 	the Conversion Rate in effect at the close of business on the Record Date
	 	 	 	 	 
	CR1	 	=	 	the new Conversion Rate in effect immediately after the Record Date
	 	 	 	 	 
	OS0	 	=	 	the number of shares of Common Stock outstanding at the close of business on the Record Date
	 	 	 	 	 
	X	 	=	 	the total number of shares of Common Stock issuable pursuant to such rights, warrants, options, other securities or convertible securities (or upon conversion of such securities)
	 	 	 	 	 
	Y	 	=	 	the number of shares of Common Stock equal to the quotient of (A) the aggregate price payable to exercise such rights, warrants, options, other securities (or the conversion price for such securities paid upon conversion) and (B) the Current Market Price per share of Common Stock immediately preceding the date of announcement for the issuance of such rights, warrants, options, other securities or convertible securities.

 

For purposes of this clause (ii), in determining whether any
rights, warrants, options, other securities or convertible securities entitle the holders to subscribe for or purchase, or exercise
a conversion right for, Common Stock at less than the applicable Current Market Price per share of Common Stock on the applicable
date, and in determining the aggregate exercise or conversion price payable for such Common Stock, there shall be taken into account
any consideration the Corporation receives for such rights, warrants, options, other securities or convertible securities and any
amount payable on exercise or conversion thereof, with the value of such consideration, if other than cash, to be determined in
good faith by the Board of Directors. If any right, warrant, option, other security or convertible security described in this clause
(ii) is not exercised or converted prior to the expiration of the exercisability or convertibility thereof, the new Conversion
Rate shall be readjusted to the Conversion Rate that would then be in effect if such right, warrant, option, other security or
convertible security had not been so issued.

 

Any adjustment made pursuant to this clause (ii) shall become
effective on the date that is immediately after the Record Date.

 

(iii)       Debt
or Asset Distributions.

 

(A)         If
the Corporation distributes capital stock (other than Common Stock), evidences of indebtedness or other assets or property of the
Corporation to all holders of the Common Stock, excluding: (x) dividends, distributions, rights, warrants, options, other securities
or convertible securities referred to in clause (i) or (ii) above, (y) dividends or distributions paid exclusively in cash, and
(z) Spin-Offs (as described below), then the Conversion Rate will be adjusted based on the
following formula: 

 

	CR1	 	=	 	CR0 × [SP0 /(SP0 - FMV)]
	 	 	 	 	 
	where	 	 	 	 
	 	 	 	 	 
	CR0	 	=	 	the Conversion Rate in effect at the close of business on the Record Date
	 	 	 	 	 
	CR1	 	=	 	the new Conversion Rate in effect immediately after the Record Date
	 	 	 	 	 
	SP0	 	=	 	the Current Market Price of the Common Stock on the Record Date
	 	 	 	 	 
	FMV	 	=	 	the fair market value (as determined in good faith by the Board of Directors) of the capital stock, evidences of indebtedness, assets or property distributed with respect to each outstanding share of Common Stock on the Record Date.

 

    	A-8

    	 

    

 

Notwithstanding the immediately preceding sentence, if “FMV”
with respect to any distribution of shares of capital stock, evidences of indebtedness or other assets or property of the Corporation
is equal to or greater than “SP0” with respect to such distribution, then in lieu of the foregoing adjustment,
adequate provision shall be made so that each holder of Series A Preferred Stock shall have the right to receive on the date such
shares of capital stock, evidences of indebtedness or other assets or property of the Corporation are distributed to holders of
Common Stock, for each share of Series A Preferred Stock, the amount of shares of capital stock, evidences of indebtedness or other
assets or property of the Corporation such holder of Series A Preferred Stock would have received had such holder of Series A Preferred
Stock owned a number of shares of Common Stock into which such Series A Preferred Stock is then convertible at the conversion rate
in effect on the Record Date for such distribution.

 

An adjustment to the Conversion Rate made pursuant to this clause
(iii)(A) shall be made successively whenever any such distribution is made and shall become effective on the Record Date.

 

(B)         If
the Corporation distributes to all holders of the Common Stock, capital stock of any class or series, or similar equity interest,
of or relating to a subsidiary or other business unit of the Corporation (a “Spin-Off”), the Conversion Rate
will be adjusted based on the following formula:

  

	CR1	 	=	 	CR0 × [(FMV0 + MP0) /MP0]
	 	 	 	 	 
	where:	 	 	 	 
	 	 	 	 	 
	CR0	 	=	 	the Conversion Rate in effect at the close of business on the Record Date
	 	 	 	 	 
	CR1	 	=	 	the new Conversion Rate in effect immediately after the Record Date
	 	 	 	 	 
	FMV0	 	=	 	the average volume weighted average price of the capital stock or similar equity interest distributed to holders of the Common Stock applicable to one share of Common Stock for the 10 consecutive Trading Days commencing on, and including, the third Trading Day after the date on which “ex-distribution trading” commences for such dividend or distribution with respect to the Common Stock on the Nasdaq or such other national or regional exchange or association or over-the-counter market or if not so traded or quoted, the fair market value (as determined in good faith by the Board of Directors) of the capital stock or similar equity interests distributed to holders of the Common Stock applicable to one share of the Common Stock
	 	 	 	 	 
	MP0	 	=	 	the Average VWAP of the Common Stock for the 10 consecutive Trading Days commencing on, and including, the third Trading Day after the date on which “ex-distribution trading” commences for such dividend or distribution with respect to the Common Stock on the Nasdaq or such other U.S. national or regional exchange or market that is at that time the principal exchange or market for the Common Stock.

 

An adjustment to the Conversion Rate made pursuant to this clause
(iii)(B) will occur on the 10th Trading Day from and including the effective date of the Spin-Off; provided that if a Conversion
occurs within the 10 Trading Days immediately following and including the date of the Spin-Off, references with respect to the
Spin-Off to “the 10 consecutive Trading Days” shall be deemed replaced with a period of consecutive Trading Days containing
such lesser number of Trading Days as have elapsed between the effective date of such Spin-Off and the Conversion Date and the
adjustment in respect of such conversion shall occur immediately prior to the conversion.

 

If any such dividend or distribution described in this clause
(iii) is declared but not paid or made, the new Conversion Rate shall be readjusted to be the Conversion Rate that would then be
in effect if such dividend or distribution had not been declared.

 

    	A-9

    	 

    

 

(iv)         Cash
Distributions. If the Corporation pays or makes any dividend or distribution consisting exclusively of cash to all holders
of Common Stock, excluding (a) any cash dividend or distribution on the Common Stock to the extent a corresponding cash dividend
or distribution pursuant to Section 4 is paid on the Series A Preferred Stock and (b) any dividend or distribution in connection
with the Corporation’s liquidation, dissolution or winding up, then the Conversion Rate will be adjusted based on the following
formula:

 

	CR1	 	=	 	CR0 × [SP0 /(SP0 - C)]
	 	 	 	 	 
	where:	 	 	 	 
	 	 	 	 	 
	CR0	 	=	 	the Conversion Rate in effect at the close of business on the Record Date
	 	 	 	 	 
	CR1	 	=	 	the new Conversion Rate in effect immediately after the Record Date
	 	 	 	 	 
	SP0	 	=	 	the Current Market Price of the Common Stock as of the Record Date
	 	 	 	 	 
	C	 	=	 	the amount in cash per share that the Corporation distributes to holders of the Common Stock.

 

An adjustment to the Conversion Rate made pursuant to this clause
(iv) shall become effective on the date fixed for determination of the holders of Common Stock entitled to receive such dividend
or distribution. If any dividend or distribution described in this clause (iv) is declared but not so paid or made, the new Conversion
Rate shall be readjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

 

(v)          Self
Tender Offers and Exchange Offers. If the Corporation or any of its subsidiaries makes a payment in respect of a tender offer
or exchange offer for the Common Stock to the extent that the cash and value of any other consideration included in the payment
per share of Common Stock exceeds the Current Market Price per share of Common Stock on the Trading Day next succeeding the last
date on which tenders or exchanges may be made pursuant to such tender or exchange offer (the “Expiration Date”),
the Conversion Rate will be adjusted based on the following formula:

 

	CR1	 	=	 	CR0 × [(FMV + (SP1 × OS1)) / (SP1 × OS0)]
	 	 	 	 	 
	where:	 	 	 	 
	 	 	 	 	 
	CR0	 	=	 	the Conversion Rate in effect at the close of business on the Expiration Date
	 	 	 	 	 
	CR1	 	=	 	the new Conversion Rate in effect immediately after the Expiration Date
	 	 	 	 	 
	FMV	 	=	 	The fair market value (as determined in good faith by the Board of Directors) on the Expiration Date, of the aggregate value of all cash and any other consideration paid or payable for the Common Stock validly tendered or exchanged and not withdrawn as of the Expiration Date (the “Purchased Shares”)
	 	 	 	 	 
	OS0	 	=	 	the number of shares of Common Stock outstanding on the Expiration Date, including any Purchased Shares
	 	 	 	 	 
	OS1	 	=	 	the number of shares of Common Stock outstanding on the Expiration Date, excluding any Purchased Shares
	 	 	 	 	 
	SP1	 	=	 	the Average VWAP of the Common Stock for the 10 consecutive Trading-Day period commencing on the Trading Day next succeeding the Expiration Date.

 

If the application of the foregoing formula would result in
a decrease in the Conversion Rate, no adjustment to such Conversion Rate will be made. Any adjustment to a Conversion Rate made
pursuant to this clause (v) shall become effective on the date immediately following the last Trading Day included in the determination
of the Average VWAP of the Common Stock for purposes of SP1 above; provided that if the Conversion occurs within the 10
Trading Days commencing on the Trading Day next succeeding the Expiration Date, references to the “10 consecutive Trading
Days” with respect to this clause (v) shall be deemed replaced with a period of consecutive Trading Days containing such
lesser number of Trading Days as have elapsed between the Expiration Date and the Conversion Date, and the adjustment in respect
of such conversion shall occur immediately prior to the conversion. If the Corporation or one of its subsidiaries is obligated
to purchase Common Stock pursuant to any such tender or exchange offer but is permanently prevented by applicable law from effecting
any such purchase or all such purchases are rescinded, the new Conversion Rate shall be readjusted to be the Conversion Rate that
would be in effect if such tender or exchange offer had not been made.

 

    	A-10

    	 

    

 

(vi)         Rights
Plans. If the Corporation has in effect a shareholder rights plan while any shares of Series A Preferred Stock remain outstanding,
Holders of Series A Preferred Stock will receive, upon any Conversion of Series A Preferred Stock, in addition to Common Stock
and, if applicable, Nonvoting Common Stock, rights under the Corporation’s shareholder rights agreement unless, prior to
such conversion, the rights have expired, terminated or been redeemed or unless the rights have separated from the Common Stock.
If the rights provided for in the shareholder rights plan have separated from the Common Stock in accordance with the provisions
of the applicable shareholder rights agreement so that Holders of Series A Preferred Stock would not be entitled to receive any
rights in respect of the Common Stock, if any, that the Corporation is required to deliver upon conversion of Series A Preferred
Stock, the Conversion Rate will be adjusted at the time of separation as if the Corporation had distributed to all holders of the
Common Stock, capital stock, evidences of indebtedness or other assets or property pursuant to clause (iii) above, subject to readjustment
upon the subsequent expiration, termination or redemption of the rights. A distribution of rights pursuant to a shareholder rights
plan will not trigger an adjustment to the Conversion Rates pursuant to clauses (ii) or (iii) above.

 

(e)          With
the approval of the Holders of at least 66 2/3% of the shares of Series A Preferred Stock at the time outstanding, the Corporation
may make such increases in the Conversion Rate, in addition to any other increases required by this Section 6, if the Board of
Directors deems it advisable in order to avoid or diminish any income tax to holders of the Common Stock resulting from any dividend
or distribution of the Corporation’s shares (or issuance of rights or warrants to acquire shares) or from any event treated
as such for income tax purposes or for any other reasons. If any adjustment to the Conversion Rate is treated as a distribution
to any U.S. Alien Holder which is subject to withholding tax, the Corporation (or the Transfer Agent or any paying agent on behalf
of the Corporation) may set off any withholding tax that is required to be collected with respect to such deemed distribution against
cash payments and other distributions otherwise deliverable to such Holder.

 

(f)          No
adjustment in any Conversion Rate will be required unless the adjustment would require an increase or decrease of at least 1% of
the Conversion Rate. If the adjustment is not made because the adjustment does not change the Conversion Rate by at least 1%, then
the adjustment that is not made will be carried forward and taken into account and included in any future adjustment. All required
calculations will be made to the nearest cent or 1/10,000th of a share. Notwithstanding the foregoing, all adjustments not previously
made shall have effect with respect to any Conversion. No adjustment to the Conversion Rate need be made if Holders may participate
in the transaction that would otherwise give rise to such adjustment, so long as the distributed assets or securities the Holders
would receive upon conversion of shares of Series A Preferred Stock—if such assets or securities are convertible, exchangeable
or exercisable—are convertible, exchangeable or exercisable, as applicable, without any loss of rights or privileges for
a period of at least 45 days following conversion of shares of Series A Preferred Stock.

 

(g)          The
applicable Conversion Rate shall not be adjusted:

 

(i)          upon
the issuance of any shares of Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or
interest payable on the Corporation’s securities and the investment of additional optional amounts in the Common Stock under
any plan;

 

(ii)         upon
the issuance of any shares of Common Stock or options or rights to purchase those shares pursuant to any present or future employee,
director or consultant benefit plan, employee agreement or arrangement or program of the Corporation;

 

(iii)        upon
the issuance of any shares of Common Stock pursuant to any option, warrant, right, or exercisable, exchangeable or convertible
security outstanding as of the Issue Date; or

 

(iv)         for
a change in the par value of the Common Stock.

 

    	A-11

    	 

    

 

(h)          The
Corporation shall have the power to resolve any ambiguity and its action in so doing, as evidenced by a resolution of the Board,
shall be final and conclusive unless clearly inconsistent with the intent hereof.

 

(i)          Whenever
the Conversion Rate is to be adjusted, the Corporation shall: (i) compute such adjusted Conversion Rate and prepare and transmit
to the Transfer Agent an Officers’ Certificate setting forth such adjusted Conversion Rate, the method of calculating the
adjusted Conversion Rate in reasonable detail and the facts requiring such adjustment; and (ii) as soon as practicable following
the determination of a revised Conversion Rate, provide, or cause to be provided, a written notice to the Holders of shares of
Series A Preferred Stock of the occurrence of such event, a statement setting forth such revised Conversion Rate, the method of
calculating the adjusted Conversion Rate in reasonable detail and the facts requiring such adjustment. Failure to deliver such
notice shall not affect the legality or validity of any such adjustment.

 

(j)          Nothing
in this Section 6 shall amend any other section of this Article III Section E or permit any transaction, action or event prohibited
or restricted by any other provision in this Article III Section E.

 

7.           Reorganization
Events. 

 

(a)          In
the event that any of the following events occurs prior to any Conversion Date: (i) any consolidation or merger of the Corporation
with or into another Person (other than a merger or consolidation in which the Corporation is the continuing corporation and in
which the shares of Common Stock outstanding immediately prior to the merger or consolidation are not exchanged for cash, securities
or other property of the Corporation or another Person), (ii) any sale, transfer, lease or conveyance to another Person of all
or substantially all of the Corporation’s property and assets, or (iii) any reclassification of the Common Stock into securities
including securities other than the Common Stock (any such event specified in clause (i) through (iii), a “Reorganization
Event”), then each share of Series A Preferred Stock outstanding immediately prior to such Reorganization Event shall,
without the consent of the Holders thereof, remain outstanding but shall at each Holder’s option, upon the effective date
and time (“Reorganization Effective Time”) of such Reorganization Event, be convertible into the kind of securities,
cash and other property receivable in such Reorganization Event (without any interest thereon and without any right to dividends
or distributions thereon which have a record date that is prior to the Reorganization Event) per share of Common Stock (the “Exchange
Property”) as if the Holder of such share of Series A Preferred Stock had converted such share into common equity (voting
and nonvoting) immediately prior to such Reorganization Event and exercised his rights of election, if any, as to the kind or amount
of securities, cash and other property receivable upon such Reorganization Event (provided that if the kind or amount of
securities, cash and other property receivable upon such Reorganization Event is not the same for each share of Common Stock held
immediately prior to such Reorganization Event and in respect of which such rights of election shall have been exercised (“Electing
Share”), then, for the purpose of this Section 7(a) the kind and amount of securities, cash and other property receivable
upon such Reorganization Event by the holder of each Electing Share shall be deemed to be the weighted average of the kinds and
amounts so receivable per share by the holders of the Electing Shares; provided further that to the extent elected by the
Holder, any securities issued with respect to the underlying Nonvoting Common Stock shall be nonvoting under the resulting institution’s
organizational documents to the same extent as the Nonvoting Common Stock is nonvoting and the Corporation shall make appropriate
provisions and take such other actions necessary to ensure that such nonvoting securities will have substantially the same rights
and benefits as the Nonvoting Common Stock, including the right to convert nonvoting common stock into common stock). The amount
of Exchange Property receivable upon any Reorganization Event shall be determined based upon the Conversion Rate in effect on such
Reorganization Effective Time.

 

(b)          The
above provisions of Section 7(a) shall similarly apply to successive Reorganization Events and the provisions of Section 8 shall
apply to any shares of capital stock of the Corporation (or any successor) received by the holders of Common Stock in any such
Reorganization Event.

 

(c)          The
Corporation (or any successor) shall, within 20 days of the Reorganization Effective Time of any Reorganization Event, provide
written notice to the Holders of the occurrence of such event and of the kind and amount of the cash, securities or other property
that constitute the Exchange Property. Failure to deliver such notice shall not affect the operation or effect of Section 7(a).

 

    	A-12

    	 

    

 

(d)          The
Corporation shall not enter into any agreement for a transaction constituting a Reorganization Event unless such agreement provides
for or does not interfere with or prevent (as applicable) conversion of the Series A Preferred Stock into the Exchange Property
in a manner that is consistent with and gives effect to Section 7(a).

 

8.           Reservation
of Common Stock. 

 

(a)          The
Corporation shall at all times reserve and keep available out of its authorized and unissued Common Stock and Nonvoting Common
Stock or shares of either held in the treasury of the Corporation, solely for issuance upon the conversion of shares of Series
A Preferred Stock as herein provided, free from any preemptive or other similar rights, such number of shares of Common Stock and
Nonvoting Common Stock as shall from time to time be issuable upon the conversion of all the shares of Series A Preferred Stock
then outstanding. For purposes of this Section 8(a), the number of shares of Common Stock and Nonvoting Common Stock that shall
be deliverable upon the conversion of all outstanding shares of Series A Preferred Stock shall be computed as if at the time of
computation all such outstanding shares were held by a single Holder.

 

(b)          Notwithstanding
the foregoing Section 8(a), the Corporation shall be entitled to deliver upon conversion of shares of Series A Preferred Stock,
as herein provided, shares of Common Stock and/or Nonvoting Common Stock reacquired and held in the treasury of the Corporation
(in lieu of the issuance of authorized and unissued shares of Common Stock or Nonvoting Common Stock), so long as any such treasury
shares are free and clear of all liens, claims, charges, security interests or encumbrances (other than liens, claims, charges,
security interests and other encumbrances, if any, created by the Holders) (“Liens”).

 

(c)          All
shares of Common Stock and Nonvoting Common Stock delivered upon conversion of the Series A Preferred Stock shall, upon issuance,
be duly authorized, validly issued, fully paid and non-assessable, free and clear of all Liens.

 

(d)          Prior
to the delivery of any securities that the Corporation shall be obligated to deliver upon conversion of the Series A Preferred
Stock, the Corporation shall use its reasonable best efforts to comply with all federal and state laws and regulations thereunder
requiring the registration of such securities with, or any approval of or consent to the delivery thereof by, any governmental
or regulatory authority.

 

(e)          The
Corporation hereby covenants and agrees that, if at any time the Common Stock shall be listed on Nasdaq or any other national securities
exchange or automated quotation system, the Corporation shall, if permitted by the rules of such exchange or automated quotation
system, list and keep listed, so long as the Common Stock shall be so listed on such exchange or automated quotation system, all
Common Stock issuable upon conversion of the Series A Preferred Stock; provided, however, that if the rules of such exchange
or automated quotation system permit the Corporation to defer the listing of such Common Stock until the Conversion of shares of
Series A Preferred Stock into Common Stock in accordance with the provisions hereof, the Corporation covenants to list such Common
Stock issuable upon conversion of shares of Series A Preferred Stock in accordance with the requirements of such exchange or automated
quotation system at such time.

 

9.           Fractional
Shares. 

 

(a)          No
fractional shares of Common Stock or Nonvoting Common Stock shall be issued as a result of the Conversion of shares of Series A
Preferred Stock.

 

(b)          In
lieu of any fractional share of Common Stock or Nonvoting Common Stock otherwise issuable in respect of any Conversion, the Corporation
shall at its option either (i) issue to such Holder an amount of shares rounded up to the next whole share of Common Stock or Nonvoting
Common Stock or (ii) pay an amount in cash (computed to the nearest cent) equal to the same fraction of the Current Market Price
of the Common Stock as of the end of the Trading Day preceding the Conversion Date.

 

(c)          If
more than one share of the Series A Preferred Stock is surrendered for conversion at one time by or for the same Holder, the number
of full shares of Common Stock or Nonvoting Common Stock issuable upon conversion thereof shall be computed on the basis of the
aggregate number of shares of the Series A Preferred Stock so surrendered.

 

    	A-13

    	 

    

 

10.         Liquidation
Rights. 

 

(a)          Voluntary
or Involuntary Liquidation. In the event of any liquidation, dissolution or winding up of the affairs of the Corporation, whether
voluntary or involuntary, prior to the Conversion Date, each Holder of shares of Series A Preferred Stock shall be entitled to
receive for each share of Series A Preferred Stock, out of the assets of the Corporation or proceeds thereof (whether capital,
surplus or other) available for distribution to shareholders of the Corporation, subject to the rights of any creditors of the
Corporation, before any distribution of such assets or proceeds is made to or set aside for the holders of Common Stock and any
other Junior Stock of the Corporation, payment in full in an amount equal to the sum of (i) Liquidation Amount per share of Series
A Preferred Stock and (ii) any declared and unpaid dividends on such share to the extent provided in Section 4 (all such amounts
collectively, the “Liquidation Preference”).

 

(b)          Partial
Payment. If any distribution described in Section 10(a) of the Corporation’s assets or the proceeds thereof are not sufficient
to pay in full the amounts payable with respect to all outstanding shares of Series A Preferred Stock and the corresponding amounts
payable with respect of any other Corporation capital stock ranking equally with Series A Preferred Stock as to such distribution,
Holders of Series A Preferred Stock and the holders of such other stock shall share ratably in any such distribution in proportion
to the full respective distributions (including, if applicable, dividends on such amount) to which they are entitled.

 

(c)          Residual
Distributions. If the Liquidation Preference has been paid in full to all Holders of Series A Preferred Stock and the corresponding
amounts payable with respect of any other Corporation capital stock ranking equally with Series A Preferred Stock as to such distribution
has been paid in full, the Holders of the Series A Preferred Stock will have no right or claim to any of the remaining assets of
the Corporation (or the proceeds thereof).

 

(d)          Merger,
Consolidation and Sale of Assets Not a Liquidation. For purposes of this Section 10, a Reorganization Event, including, without
limitation, the merger or consolidation of the Corporation with any other corporation or other entity, including a merger or consolidation
in which the Holders of shares of Series A Preferred Stock receive cash, securities or other property for their shares, or the
sale, lease, or exchange (for cash, securities or other property) or pledge of all or substantially all of the assets of the Corporation,
shall not constitute a liquidation, dissolution or winding up of the Corporation.

 

11.         No
Sinking Fund, etc. The shares of Series A Preferred Stock will not be subject to any mandatory redemption, sinking fund or
other similar provisions. Holders of shares of Series A Preferred Stock will have no right to require the Corporation to redeem
or repurchase any shares of Series A Preferred Stock.

 

12.         Status
of Repurchased Shares. Shares of Series A Preferred Stock that are converted into Common Stock or repurchased or otherwise
acquired by the Corporation shall revert to authorized but unissued shares of Preferred Stock undesignated as to series (provided
that any such cancelled shares of Series A Preferred Stock may be reissued only as shares of any series of Preferred Stock
other than Series A Preferred Stock).

 

13.         Voting
Rights. 

 

(a)          General.
The Holders of shares of Series A Preferred Stock shall not have any voting rights except as set forth below or as otherwise from
time to time required by law. Holders of shares of Series A Preferred Stock will be entitled to one vote for each such share on
any matter on which Holders of shares of Series A Preferred Stock are entitled to vote, including any action by written consent.

 

(b)          Voting
Rights as to Particular Matters. So long as any shares of Series A Preferred Stock are outstanding, in addition to any other
vote or consent of shareholders required by law or by the Articles, the affirmative vote or consent of the Holders of at least
66 2/3% of the shares of Series A Preferred Stock at the time outstanding, voting as a separate class, given in person or by proxy,
by vote at any meeting called for the purpose, shall be necessary for effecting or validating:

 

(i)          Authorization
of Senior Stock. Any amendment or alteration of the Articles or any articles of amendment thereto to authorize or create or
increase the authorized amount of, or any issuance of, any shares of, or any securities convertible into or exchangeable or exercisable
for shares of, any class or series of capital stock of the Corporation ranking senior to the Series A Preferred Stock with respect
to either or both the payment of dividends and/or the distribution of assets on any liquidation, dissolution or winding up of the
Corporation; or

 

    	A-14

    	 

    

 

(ii)         Amendment
of Series A Preferred Stock. Any amendment, alteration or repeal of any provision of the Articles or these Articles of Amendment
thereto (including, unless no vote on such merger, consolidation or other transaction is required by clause (iii) below, any amendment,
alteration or repeal by means of a merger, consolidation or otherwise) so as to adversely affect the rights, preferences, privileges
or voting powers of shares of Series A Preferred Stock;

 

provided further, however, that for all purposes of this
Section 13(b), the creation and issuance, or an increase in the authorized or issued amount, whether pursuant to preemptive or
similar rights or otherwise, of any other series of Preferred Stock, or any securities convertible into or exchangeable or exercisable
for any other series of Preferred Stock, ranking equally with and/or junior to Series A Preferred Stock with respect to the payment
of dividends (whether such dividends are cumulative or noncumulative) and the distribution of assets upon liquidation, dissolution
or winding up of the Corporation will not be deemed to adversely affect the rights, preferences, privileges or voting powers, and
shall not require the affirmative vote or consent of, the Holders of outstanding shares of the Series A Preferred Stock.

 

(c)          Procedures
for Voting and Consents. The rules and procedures for calling and conducting any meeting of the Holders of Series A Preferred
Stock (including, without limitation, the fixing of a record date in connection therewith), the solicitation and use of proxies
at such a meeting, the obtaining of written consents and any other aspect or matter with regard to such a meeting or such consents
shall be governed by any rules of the Board of Directors, in its discretion, may adopt from time to time, which rules and procedures
shall conform to the requirements of the Corporation’s Articles, the Corporation’s Bylaws and applicable law and the
rules of Nasdaq or any national securities exchange or other trading facility, if any, on which Series A Preferred Stock is listed
or traded at the time.

 

14.         Record
Holders. To the fullest extent permitted by applicable law, the Corporation and the Transfer Agent may deem and treat the Record
Holder of any share of Series A Preferred Stock as the true and lawful owner thereof for all purposes, and neither the Corporation
nor such transfer agent shall be affected by any notice to the contrary.

 

15.         Notices.
All notices or communications in respect of Series A Preferred Stock shall be sufficiently given if given in writing and delivered
in person, by overnight courier, or by first class mail, postage prepaid, or if given in such other manner as may be permitted
in these Articles of Amendment, in the Articles or Bylaws or by applicable law. Notwithstanding the foregoing, if shares of Series
A Preferred Stock are issued in book-entry form through DTC or any similar facility, such notices may be given to the Holders of
Series A Preferred Stock in any manner permitted by or customarily used by such facility and its participants.

 

16.         No
Preemptive Rights; No Redemption Rights. No share of Series A Preferred Stock shall have any preemptive rights whatsoever under
the Articles and these Articles of Amendment as to any securities of the Corporation, or any warrants, rights or options issued
or granted with respect thereto, regardless of how such securities, or such warrants, rights or options, may be designated, issued
or granted. No holder of shares of Series A Preferred Stock shall have at any time the right to put such shares of Series A Preferred
Stock to the Corporation or to have the Corporation redeem any shares of Series A Preferred Stock.

 

17.         Redemption
by the Corporation. The Series A Preferred Stock shall not be redeemable by the Corporation. In all events, any repurchase
or redemption of Series A Preferred Stock shall be subject to the prior approval of the Corporation’s primary federal banking
regulator, if required by applicable law or regulation or if such approval is a requirement to the Series A Preferred Stock being
classified as Tier 1 capital (or the equivalent) for bank regulatory purposes, together with any other required regulatory approvals.

 

18.         Replacement
Stock Certificates. If any of the Series A Preferred Stock Certificates shall be mutilated, lost, stolen or destroyed, the
Corporation shall, at the expense of the Holder, issue, in exchange and in substitution for and upon cancellation of the mutilated
Series A Preferred Stock Certificate, or in lieu of and substitution for the Series A Preferred Stock Certificate lost, stolen
or destroyed, a new Series A Preferred Stock Certificate of like tenor and representing an equivalent amount of shares of Series
A Preferred Stock, but only upon receipt of evidence of such loss, theft or destruction of such Series A Preferred Stock Certificate
and indemnity, if requested, satisfactory to the Corporation and the Transfer Agent.

 

    	A-15

    	 

    

  

19.         Transfer
Agent, Registrar, Conversion and Dividend Paying Agent. The duly appointed transfer agent, registrar, conversion and dividend
paying agent for shares of Series A Preferred Stock shall be the Transfer Agent. The Corporation may, in its sole discretion, remove
the Transfer Agent in accordance with the agreement between the Corporation and the Transfer Agent; provided that the Corporation
shall appoint a successor transfer agent who shall accept such appointment prior to the effectiveness of such removal. Upon any
such removal or appointment, the Corporation shall send notice thereof by first-class mail, postage prepaid, to the Holders of
shares of Series A Preferred Stock.

 

20.         Form.
The Series A Preferred Stock shall be issued in the form of one or more definitive shares in fully registered form (each, a “Series
A Preferred Stock Certificate”). Each Series A Preferred Stock Certificate shall reflect the number of shares of Series
A Preferred Stock represented thereby, and may have notations, legends or endorsements required by applicable law, applicable Nasdaq
or other securities exchange or DTC rules and arrangements, agreements to which the Corporation is subject, if any, (provided that
any such notation, legend or endorsement is in a form acceptable to the Corporation). Each Series A Preferred Stock Certificate
shall be registered in the name or names of the Person or Persons specified by the Corporation in a written instrument to the Transfer
Agent.

 

21.         Stock
Transfer and Stamp Taxes. The Corporation shall pay any and all stock transfer and documentary stamp taxes that may be payable
in respect of any initial issuance or delivery of shares of Series A Preferred Stock or shares of Common Stock or other securities
issued on account of Series A Preferred Stock pursuant hereto or certificates representing such shares or securities. The Corporation
shall not, however, be required to pay any such tax that may be payable in respect of any transfer involved in the issuance or
delivery of shares of Series A Preferred Stock or Common Stock or other securities in a name other than that in which the shares
of Series A Preferred Stock with respect to which such shares or other securities are issued or delivered were registered, or in
respect of any payment to any person other than a payment to the Holder thereof, and shall not be required to make any such issuance,
delivery or payment unless and until the person otherwise entitled to such issuance, delivery or payment has paid to the Corporation
the amount of any such tax or has established, to the satisfaction of the Corporation, that such tax has been paid or is not payable.

 

22.         Other
Rights. The shares of Series A Preferred Stock shall not have any rights, preferences, privileges or voting powers or relative,
participating, optional or other special rights, or qualifications, limitations or restrictions thereof, other than as set forth
herein, or in the Articles or as provided by applicable law.

 

    	A-16

    	 

    

 

EXHIBIT B 

Non-Voting Articles of Amendment

 

Article III 

Section B, subsection 5    Nonvoting
Common Stock 

 

Except as set forth in this subsection 5,
the Common Stock and the Nonvoting Common Stock shall have the same rights and privileges, share ratably in all assets of the Corporation
upon its liquidation, dissolution or winding-up, be entitled to receive dividends in the same amount per share and at the same
time when, as and if declared by the Corporation’s board of directors, and be identical in all other respects as to all other
matters, except voting.

 

(a)          The
holders of Nonvoting Common Stock shall have no voting rights except as required by the Virginia Stock Corporation Act. Notwithstanding
the foregoing, and in addition to any other vote required by law, the affirmative vote of the holders of a majority of the outstanding
shares of Nonvoting Common Stock, voting separately as a class, shall be required to amend the Corporation’s Articles of
Incorporation, as amended, to adversely affect the designation, preferences, limitations or relative rights of all or part of the
shares of Nonvoting Common Stock. Where shares of Nonvoting Common Stock are entitled to vote, each holder of Nonvoting Common
Stock shall have one vote in respect of each share of Nonvoting Common Stock held of record solely on the matters as to which such
shares are entitled to vote and subject to the rights and limitations specified by the Virginia Stock Corporation Act.

 

(b)          In
the event of any stock split, combination or other reclassification of shares of either the Common Stock or the Nonvoting Common
Stock, the outstanding shares of the other class shall be proportionately split, combined or reclassified in a similar manner;
provided, however, that in any such transaction, holders of Common Stock shall receive only shares of Common Stock in respect of
their shares of Common Stock and holders of Nonvoting Common Stock shall receive only shares of Nonvoting Common Stock in respect
of their shares of Nonvoting Common Stock.

 

(c)          No
transfer of shares of Nonvoting Common Stock by the initial holder thereof shall be permitted, except (i) in a Permitted Transfer,
(ii) to an Affiliate of the initial holder of the Nonvoting Common Stock to be transferred or (iii) to the Corporation. A “Permitted
Transfer” means a transfer by a holder of Nonvoting Common Stock (i) in a widespread public distribution; (ii) in which no
transferee (or group of associated transferees) would receive two percent (2%) or more of any class of voting securities of the
Corporation; or (iii) to a transferee that would control more than fifty percent (50%) of the voting securities of the Corporation
without any transfer from such holder of Nonvoting Common Stock. “Affiliate” means, with respect to any person, any
person directly or indirectly, controlling, controlled by or under common control with, such other person. Each share of Nonvoting
Common Stock shall be converted automatically into one share of Common Stock incident to a transfer of such share of Nonvoting
Common Stock to a transferee in a Permitted Transfer. The issuance of certificates, if any, for shares of Common Stock upon conversion
of Nonvoting Common Stock shall be made without charge to the holders of such shares for any issuance tax in respect thereof or
other cost incurred by the Corporation in connection with such conversion and the related issuance. The Corporation shall cooperate
with the timely conversion of Nonvoting Common Stock subject to compliance with applicable law and regulations.

 

(d)          The
Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock or shares held
in treasury for the Corporation, such number of its shares of Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of Nonvoting Common Stock.

 

    	B-1

    	 

    

 

(e)          In
the event of any merger, consolidation, reclassification or other transaction in which the shares of Common Stock are exchanged
for or changed into other stock or securities, cash and/or any other property, each share of Nonvoting Common Stock will at the
same time be similarly exchanged or changed in an amount per whole share equal to the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be, that each share of Common Stock would be entitled to receive as
a result of such transaction, provided that at the election of the holder of shares of Nonvoting Common Stock, any securities issued
with respect to the Nonvoting Common Stock shall be nonvoting under the resulting institution’s organizational documents
to the same extent as the Nonvoting Common Stock is nonvoting and the Corporation shall make appropriate provisions (in form and
substance reasonably satisfactory to the holders of a majority of the Nonvoting Common Stock then outstanding) and take such other
actions necessary to ensure that the holders of the Nonvoting Common Stock shall retain securities with substantially the same
rights and benefits, including the right to convert nonvoting common stock into common stock, as the Nonvoting Common Stock. Subject
to the immediately preceding sentence, in the event the holders of Common Stock are provided the right to convert or exchange Common
Stock for stock or securities, cash and/or any other property, then the holders of the Nonvoting Common Stock shall be provided
the same right based upon the number of shares of Common Stock such holders would be entitled to receive if such shares of Nonvoting
Common Stock were converted into shares of Common Stock immediately prior to such offering. In the event that the Corporation offers
to repurchase shares of Common Stock from its shareholders generally, the Corporation shall offer to repurchase Nonvoting Common
Stock pro rata based upon the number of shares of Common Stock such holders would be entitled to receive if such shares were converted
into shares of Common Stock immediately prior to such repurchase. In the event of any pro rata subscription offer, rights offer
or similar offer to holders of Common Stock, the Corporation shall provide the holders of the Nonvoting Common Stock the right
to participate based upon the number of shares of Common Stock such holders would be entitled to receive if such shares were converted
into shares of Common Stock immediately prior to such offering; provided that at the election of such holder, any shares issued
with respect to the Nonvoting Common Stock shall be issued in the form of Nonvoting Common Stock rather than Common Stock.

 

    	B-2

    	 

    

 

EXHIBIT C

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (this
“Agreement”) is made and entered into as of ___________________, by and among Cordia Bancorp Inc., a Virginia
corporation (the “Company”), and the several purchasers signatory hereto (each a “Purchaser”
and collectively, the “Purchasers”).

 

This Agreement is made pursuant to the Securities
Purchase Agreement, dated as of the date hereof between the Company and each Purchaser (the “Purchase Agreement”).

 

NOW, THEREFORE, IN CONSIDERATION of the
mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Company and each of the Purchasers agree as follows:

 

 

1.          Definitions.  Capitalized
terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms
in the Purchase Agreement.  As used in this Agreement, the following terms shall have the following meanings:

“Advice” shall have the
meaning set forth in Section 7(d).

 

“Affiliate” means, with
respect to any person, any other person which directly or indirectly controls, is controlled by, or is under common control with,
such person.

 

“Agreement” shall have
the meaning set forth in the Preamble.

 

“Allowable Grace Period”
shall have the meaning set forth in the Section 2(e).

 

“Business Day” means
a day, other than a Saturday or Sunday, on which banks in Virginia are open for the general transaction of business.

 

“Closing Date” has the
meaning set forth in the Purchase Agreement.

 

“Commission” means the
Securities and Exchange Commission.

 

“Common Shares” means
the common stock of the Company, $0.01 par value per share, and any securities into which such Common Shares may hereinafter be
reclassified.

 

“Company” shall have
the meaning set forth in the Preamble.

 

“Effective Date” means
the date that the Registration Statement filed pursuant to Section 2(a) is first declared effective by the Commission.

 

    	 

    	 

    

 

“Effectiveness Deadline”
means, with respect to the Initial Registration Statement or the New Registration Statement, the earlier of (i) the 90th calendar
day following the date that the Company’s stockholders approve the transactions contemplated by the Purchase Agreement (or
the 120th calendar day following the date that the Company’s stockholders approve the transactions contemplated by the Purchase
Agreement in the event that such registration statement is subject to review by the Commission) and (ii) the 5th Trading Day after
the date the Company is notified (orally or in writing, whichever is earlier) by the Commission that such Registration Statement
will not be “reviewed” or will not be subject to further review; provided, that if the Effectiveness Deadline
falls on a Saturday, Sunday or other day that the Commission is closed for business, the Effectiveness Deadline shall be extended
to the next Business Day on which the Commission is open for business.

 

“Effectiveness Period”
shall have the meaning set forth in Section 2(c).

 

“Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Filing Deadline” means,
with respect to the Initial Registration Statement required to be filed pursuant to Section 2(a), the 20th calendar day following
the date that the Company’s stockholders approve the transactions contemplated by the Purchase Agreement, provided, however,
that if the Filing Deadline falls on a Saturday, Sunday or other day that the Commission is closed for business, the Filing Deadline
shall be extended to the next business day on which the Commission is open for business.

 

“Grace Period” shall
have the meaning set forth in the Section 2(e).

 

“Holder” or “Holders”
means the holder or holders, as the case may be, from time to time of Registrable Securities.

 

“Indemnified Party” shall
have the meaning set forth in Section 6(c).

 

“Indemnifying Party”
shall have the meaning set forth in Section 6(c).

 

“Initial Registration Statement”
means the initial Registration Statement filed pursuant to Section 2(a) of this Agreement.

 

“Losses” shall have the
meaning set forth in Section 6(a).

 

“New Registration Statement”
shall have the meaning set forth in Section 2(a).

 

“Person” means an individual
or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Principal Market” means
the Trading Market on which the Common Shares are primarily listed on and quoted for trading, which, as of the Closing Date, shall
be the NASDAQ Capital Market.

 

    	C-2

    	 

    

 

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

 

“Prospectus” means the
prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously
omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion
of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such
Prospectus.

 

“Purchase Agreement”
shall have the meaning set forth in the Recitals.

 

“Purchaser” or “Purchasers”
shall have the meaning set forth in the Preamble.

 

“Registrable Securities”
means all of the “Underlying Shares” (as defined in the Purchase Agreement) and any securities issued or issuable upon
any stock split, dividend or other distribution, recapitalization or similar event with respect to the such securities, provided,
that the Holder has completed and delivered to the Company a Selling Stockholder Questionnaire; and provided, further, that
such securities shall cease to be Registrable Securities upon the earliest to occur of the following: (A) a sale pursuant to a
Registration Statement or Rule 144 under the Securities Act (in which case, only such security sold shall cease to be a Registrable
Security); or (B) becoming eligible for sale without the requirement for the Company to be in compliance with the current public
information required under Rule 144(c)(1) (or Rule 144(i)(2), if applicable) and without volume or manner of sale restrictions
by Holders who are not Affiliates of the Company.

 

“Registration Statements”
means any one or more registration statements of the Company filed under the Securities Act that covers the resale of any of the
Registrable Securities pursuant to the provisions of this Agreement (including without limitation the Initial Registration Statement,
the New Registration Statement and any Remainder Registration Statement), amendments and supplements to such Registration Statements,
including post-effective amendments, all exhibits and all material incorporated by reference or deemed to be incorporated by reference
in such Registration Statements.

 

“Remainder Registration Statement”
shall have the meaning set forth in Section 2(b).

 

“Rule 144” means Rule
144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“Rule 415” means Rule
415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

    	C-3

    	 

    

 

“Rule 424” means Rule
424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“SEC Guidance” means
(i) any publicly-available written or oral guidance, comments, requirements or requests of the Commission staff and (ii) the Securities
Act.

 

“Securities” means (i)
the common stock of the Company, $0.01 par value per share, (ii) shares of the Company’s non-voting common stock, $0.01 par
value per share, and (iii) any securities into which such Common Shares or shares of non-voting common stock may hereinafter be
reclassified.

 

“Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Selling Stockholder Questionnaire”
means a questionnaire in the form attached as Annex B hereto, or such other form of questionnaire as may reasonably be adopted
by the Company from time to time.

 

“Trading Day” means (i)
a day on which the Common Shares are listed or quoted and traded on its Principal Market (other than the OTC Bulletin Board), or
(ii) if the Common Shares are not listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common Shares
are traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Shares are not quoted
on any Trading Market or over-the-counter market, a day on which the Common Shares are quoted in the over-the-counter market as
reported in the “pink sheets” by Pink Sheets LLC (or any similar organization or agency succeeding to its functions
of reporting prices); provided, that in the event that the Common Shares are not listed or quoted as set forth in (i), (ii)
and (iii) hereof, then Trading Day shall mean a Business Day.

 

“Trading Market” means
whichever of the New York Stock Exchange, the NYSE Amex, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ
Capital Market or OTC Bulletin Board on which the Common Shares are listed or quoted for trading on the date in question.

 

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

 

    	C-4

    	 

    

 

2.           Initial
Registration.

 

(a)          On
or prior to the Filing Deadline, the Company shall prepare and file with the Commission a Registration Statement covering the resale
of all of the Registrable Securities not already covered by an existing and effective Registration Statement for an offering to
be made on a continuous basis pursuant to Rule 415 or, if Rule 415 is not available for offers and sales of the Registrable Securities,
by such other means of distribution of Registrable Securities as the Company may reasonably determine (the “Initial Registration
Statement”).  The Initial Registration Statement shall be on Form S-3 (except if the Company is then ineligible
to register for resale of the Registrable Securities on Form S-3, in which case such registration shall be on such other form available
to the Company to register for resale of the Registrable Securities as a secondary offering) subject to the provisions of Section
2(f) and shall contain (except if otherwise required pursuant to written comments received from the Commission upon a review of
such Registration Statement) the “Plan of Distribution” section substantially in the form attached hereto as Annex
A.  Notwithstanding the registration obligations set forth in this Section 2, in the event the Commission informs
the Company that all of the Registrable Securities cannot, as a result of the application of Rule 415, be registered for resale
as a secondary offering on a single registration statement, the Company agrees to promptly (i) inform each of the Holders thereof
and use its commercially reasonable best efforts to file amendments to the Initial Registration Statement as required by the Commission
and/or (ii) withdraw the Initial Registration Statement and file a new registration statement (a “New Registration Statement”),
in either case covering the maximum number of Registrable Securities permitted to be registered by the Commission, on Form S-3
or such other form available to the Company to register for resale the Registrable Securities as a secondary offering; provided,
however, that prior to filing such amendment or New Registration Statement, the Company shall be obligated to use its commercially
reasonable best efforts to advocate with the Commission for the registration of all of the Registrable Securities in accordance
with the SEC Guidance, including without limitation, Securities Act Rules Compliance and Disclosure Interpretation 612.09.  Notwithstanding
any other provision of this Agreement, if any SEC Guidance sets forth a limitation of the number of Registrable Securities or other
Securities permitted to be registered on a particular Registration Statement as a secondary offering (and notwithstanding that
the Company used commercially reasonable best efforts to advocate with the Commission for the registration of all or a greater
number of Registrable Securities), the number of Registrable Securities or other Securities to be registered on such Registration
Statement will be reduced as follows: first, the Company shall reduce or eliminate the Securities to be included by any person
other than a Holder; second, the Company shall reduce or eliminate any Securities to be included by any Affiliate of the Company
(other than any Affiliate that is a Purchaser); and third, the Company shall reduce the number of Registrable Securities to be
included by all other Holders on a pro rata basis based on the total number of unregistered Registrable Securities held by such
Holders, subject to a determination by the Commission that certain Holders must be reduced before other Holders based on the number
of Registrable Securities held by such Holders.  

 

(b)          In
the event the Company amends the Initial Registration Statement or files a New Registration Statement, as the case may be, under
clauses (i) or (ii) above, the Company will use its commercially reasonable best efforts to file with the Commission, as promptly
as allowed by Commission or SEC Guidance provided to the Company or to registrants of securities in general, one or more registration
statements on Form S-3 or such other form available to the Company to register for resale those Registrable Securities that were
not registered for resale on the Initial Registration Statement, as amended, or the New Registration Statement (the “Remainder
Registration Statement”).  No Holder shall be named as an “underwriter” in any Registration Statement
without such Holder’s prior written consent.

 

    	C-5

    	 

    

 

(c)          The
Company shall use its commercially reasonable best efforts to cause each Registration Statement to be declared effective by the
Commission as soon as practicable and, with respect to the Initial Registration Statement or the New Registration Statement, as
applicable, no later than the Effectiveness Deadline, and shall use its commercially reasonable best efforts to keep each Registration
Statement continuously effective and in compliance with the Securities Act and usable for resale of such Registrable Securities
for a period from the Effective Date until such time as there are no Registrable Securities remaining (including by refiling such
Initial Registration Statement (or a new Registration Statement or a Remainder Registration Statement) if the Initial Registration
Statement expires) (the “Effectiveness Period”).  The Company shall request effectiveness of a Registration
Statement as of 5:00 p.m. New York City time on a Trading Day.  The Company shall promptly notify the Holders via facsimile
or electronic mail of a “.pdf” format data file of the effectiveness of a Registration Statement within one (1) Business
Day of the Effective Date. The Company shall, by 9:30 a.m. New York City time on the first Trading Day after the Effective Date,
file a final Prospectus with the Commission, as required by Rule 424(b).

 

(d)          Each
Holder agrees to furnish to the Company a completed Selling Stockholder Questionnaire not more than ten (10) Trading Days following
the date of this Agreement. At least five (5) Trading Days prior to the first anticipated filing date of a Registration Statement
for any registration under this Agreement, the Company will notify each Holder of the information the Company requires from that
Holder other than the information contained in the Selling Stockholder Questionnaire, if any, which shall be completed and delivered
to the Company promptly upon request and, in any event, within two (2) Trading Days prior to the applicable anticipated filing
date.  Each Holder further agrees that it shall not be entitled to be named as a selling securityholder in the Registration
Statement or use the Prospectus for offers and resales of Registrable Securities at any time, unless such Holder has returned to
the Company a completed and signed Selling Stockholder Questionnaire and a response to any requests for further information as
described in the previous sentence. If a Holder of Registrable Securities returns a Selling Stockholder Questionnaire or a request
for further information, in either case, after its respective deadline, the Company shall use its commercially reasonable best
efforts at the expense of the Holder who failed to return the Selling Stockholder Questionnaire or to respond for further information
to take such actions as are required to name such Holder as a selling security holder in the Registration Statement or any pre-effective
or post-effective amendment thereto and to include (to the extent not theretofore included) in the Registration Statement the Registrable
Securities identified in such late Selling Stockholder Questionnaire or request for further information. Each Holder acknowledges
and agrees that the information in the Selling Stockholder Questionnaire or request for further information as described in this
Section 2(d) will be used by the Company in the preparation of the Registration Statement and hereby consents to the inclusion
of such information in the Registration Statement.

 

    	C-6

    	 

    

 

(e)          Notwithstanding
anything to the contrary herein, at any time after the Registration Statement has been declared effective by the Commission, the
Company may delay the disclosure of material non-public information concerning the Company if the disclosure of such information
at the time is not, in the good faith judgment of the Company, in the best interests of the Company (such delay, a “Grace
Period”); provided, however, the Company shall promptly (i) notify the Holders in writing of the existence of
material non-public information giving rise to a Grace Period (provided that the Company shall not disclose the content of such
material non-public information to the Holders) or the need to file a post-effective amendment, as applicable, and the date on
which such Grace Period will begin, (ii) use commercially reasonable best efforts to terminate a Grace Period as promptly as practicable
and (iii) notify the Holders in writing of the date on which the Grace Period ends; provided, further, that no single Grace
Period shall exceed thirty (30) consecutive days, and during any three hundred sixty-five (365) day period, the aggregate of all
Grace Periods shall not exceed an aggregate of sixty (60) days (each Grace Period complying with this provision being an “Allowable
Grace Period”).   For purposes of determining the length of a Grace Period, the Grace Period shall be
deemed to begin on and include the date the Holders receive the notice referred to in clause (i) above and shall end on and include
the later of the date the Holders receive the notice referred to in clause (iii) above and the date referred to in such notice;
provided, however, that no Grace Period shall be longer than an Allowable Grace Period. Notwithstanding anything to the contrary,
the Company shall cause the Transfer Agent to deliver unlegended Securities to a transferee of a Holder in accordance with the
terms of the Purchase Agreement in connection with any sale of Registrable Securities with respect to which a Holder has entered
into a contract for sale prior to the Holder’s receipt of the notice of a Grace Period and for which the Holder has not yet
settled.

 

(f)          In
the event that Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company
shall (i) register the resale of the Registrable Securities on another appropriate form and (ii) undertake to register the Registrable
Securities on Form S-3 promptly after such form is available, provided that the Company shall maintain the effectiveness
of the Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities
has been declared effective by the Commission.

 

3.           Demand
Registration.

 

(a)          If
at any time after the filing of the Initial Registration Statement, the Company receives a request from Holder of Registrable Securities
then outstanding (an “Initiating Holder”) that the Company file a Registration Statement with respect to outstanding
Registrable Securities of such Initiating Holder not already covered by an existing Registration Statement, then the Company shall,
(i) within ten (10) days after the date such request is given, give notice to all Holders other than the Initiating Holder, and
(ii) as soon as practicable, and in any event within sixty (60) days after the date such request is given, file a Form S-3 registration
statement under the Securities Act (except if the Company is then ineligible to register for resale of the Registrable Securities
on Form S-3, in which case such registration shall be on such other form available to the Company to register for resale of the
Registrable Securities as a secondary offering) subject to the provisions of Section 3(d) covering all Registrable Securities requested
to be included in such registration by the Initiating Holder and any other Holders, as specified by notice given by each such Holder
to the Company within twenty (20) days of the date the notice pursuant to clause (i) above is given, and in each case, subject
to the limitations of Sections 3(b) and (c). The Company shall use its commercially reasonable best efforts to cause such Registration
to be declared effective under the Securities Act as promptly as practicable after the filing thereof. Upon the request of any
Holder that Registrable Securities be registered pursuant to this Section 3(a), all such Registrable Securities shall thereafter
be Registrable Securities for all purposes under this Agreement.

 

    	C-7

    	 

    

 

(b)          If
Tricadia Capital Management, LLC (“Tricadia”) intends to distribute the Registrable Securities registered pursuant
to Section 3(a) by means of an underwriting, it shall so advise the Company as a part of its request made pursuant to this Section
3 and the Company shall include such information in the written notice referred to in subsection 1.2(a). The underwriter will be
selected by Tricadia and shall be reasonably acceptable to the Company. In such event, the right of any other Holder to include
its, his or her Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such
underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting (unless otherwise mutually agreed
by the Initiating Holders and such Holder) to the extent provided herein. All Holders proposing to distribute their securities
through such underwriting shall (together with the Company) enter into an underwriting agreement in customary form with the underwriter
or underwriters selected for such underwriting. Notwithstanding any other provision of this Section 3, if the managing underwriter(s)
advises Tricadia and the Company in writing that marketing factors require a limitation of the number of shares to be underwritten,
then the Company shall so advise all Holders of Registrable Securities which would otherwise be underwritten pursuant hereto, and
the number of shares of Registrable Securities of Holders other than the Initiating Holder that may be included in the underwriting
shall be allocated among all such Holders, in proportion (as nearly as practicable) to the amount of Registrable Securities of
the Company owned by each such Holder.

 

(c)          Notwithstanding
the foregoing obligations, if the Company furnishes to Holders requesting a registration pursuant to this Section 3 a certificate
signed by the Company’s chief executive officer stating that in the good faith judgment of the Company’s Board of Directors
it would be materially detrimental to the Company and its stockholders for such Registration Statement to either become effective
or remain effective for as long as such Registration Statement otherwise would be required to remain effective, because such action
would (i) materially interfere with a significant acquisition, corporate reorganization, or other similar transaction involving
the Company; (ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving
as confidential; or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act, then
the Company shall have the right to defer taking action with respect to such filing, and any time periods with respect to filing
or effectiveness thereof shall be tolled correspondingly, for a period of not more than ninety (90) days after the request of the
Initiating Holder is given; provided, however, that the Company may not invoke this right more than once in any twelve (12)
month period; and provided further that (x) the Company shall not register any securities for its own account or that of any other
stockholder during such ninety (90) day period other than pursuant to a registration relating to the sale of securities to employees
of the Company or a subsidiary pursuant to a stock option, stock purchase, or similar plan; (y) a registration on any form that
does not include substantially the same information as would be required to be included in a registration statement covering the
sale of the Registrable Securities; or (z) a registration in which the only Common Stock being registered is Common Stock issuable
upon conversion of debt securities that are also being registered.

 

    	C-8

    	 

    

 

(d)          The
Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 3(a) (i) during
the period that is thirty (30) days before the Company’s good faith estimate of the date of filing of, and ending on a date
that is ninety (90) days after the effective date of, a Company-initiated registration, provided, that the Company is actively
employing in good faith commercially reasonable best efforts to cause such registration statement to become effective or (ii) prior
to January 1, 2015 with respect to a distribution of Registrable Securities by means of an underwriting .

 

(e)          In
the event that Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company
shall (i) register the resale of the Registrable Securities on another appropriate form and (ii) undertake to register the Registrable
Securities on Form S-3 promptly after such form is available, provided that the Company shall maintain the effectiveness
of the Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities
has been declared effective by the Commission.

 

4.           Registration
Procedures.

 

In connection with the
Company’s registration obligations hereunder:

 

(a)          the
Company shall not less than three (3) Trading Days prior to the filing of a Registration Statement and not less than one (1) Trading
Day prior to the filing of any related Prospectus or any amendment or supplement thereto (except for Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and any similar or successor reports), the Company shall, furnish
to the Holder copies of such Registration Statement, Prospectus or amendment or supplement thereto, as proposed to be filed, which
documents will be subject to the review of such Holder (it being acknowledged and agreed that if a Holder does not object to or
comment on the aforementioned documents within such three (3) Trading Day or one (1) Trading Day period, as the case may be, then
the Holder shall be deemed to have consented to and approved the use of such documents).  The Company shall not file
any Registration Statement or amendment or supplement thereto in a form to which a Holder reasonably objects in good faith, provided
that, the Company is notified of such objection in writing within the three (3) Trading Day or one (1) Trading Day period described
above, as applicable.

 

    	C-9

    	 

    

 

(b)          (i)  the
Company shall prepare and file with the Commission such amendments (including post-effective amendments) and supplements, to each
Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement
continuously effective as to the applicable Registrable Securities for its Effectiveness Period (except during an Allowable Grace
Period); (ii) the Company shall cause the related Prospectus to be amended or supplemented by any required Prospectus supplement
(subject to the terms of this Agreement), and, as so supplemented or amended, to be filed pursuant to Rule 424 (except during an
Allowable Grace Period); (iii) the Company shall respond as promptly as reasonably practicable to any comments received from the
Commission with respect to each Registration Statement or any amendment thereto and, as promptly as reasonably possible, provide
the Holders true and complete copies of all correspondence from and to the Commission relating to such Registration Statement that
pertains to the Holders as “Selling Stockholders” but not any comments that would result in the disclosure to the Holders
of material and non-public information concerning the Company; and (iv) the Company shall comply with the provisions of the Securities
Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement until
such time as all of such Registrable Securities shall have been disposed of (subject to the terms of this Agreement) in accordance
with the intended methods of disposition by the Holders thereof as set forth in such Registration Statement as so amended or in
such Prospectus as so supplemented; provided, however, that each Purchaser shall be responsible for the delivery of the
Prospectus to the Persons to whom such Purchaser sells any of the Registrable Securities (including in accordance with Rule 172
under the Securities Act), and each Purchaser agrees to dispose of Registrable Securities in compliance with the plan of distribution
described in the Registration Statement and otherwise in compliance with applicable federal and state securities laws. In the case
of amendments and supplements to a Registration Statement which are required to be filed pursuant to this Agreement (including
pursuant to this Section 4(b)) by reason of the Company filing a report on Form 10-K, Form 10-Q or Form 8-K or any analogous report
under the Exchange Act, the Company shall have incorporated such report by reference into such Registration Statement, if applicable,
or shall file such amendments or supplements with the Commission on the same day on which the Exchange Act report which created
the requirement for the Company to amend or supplement such Registration Statement was filed.

 

(c)          the
Company shall notify the Holders (which notice shall, pursuant to clauses (iii) through (v) hereof, be accompanied by an instruction
to suspend the use of the Prospectus until the requisite changes have been made, but which notice shall not contain any material
non-public information regarding the Company) as promptly as reasonably practicable (and, in the case of (i)(A) below, not less
than two Trading Days prior to such filing, in the case of (iii) and (iv) below, not more than one Trading Day after such issuance
or receipt, and in the case of (v) below, not more than one Trading Day after the occurrence or existence of such development)
and (if requested by any such Person) confirm such notice in writing no later than one Trading Day following the day: (i)(A) when
a Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed; (B)
when the Commission notifies the Company whether there will be a “review” of such Registration Statement and whenever
the Commission comments in writing on any Registration Statement (in which case the Company shall provide to each of the Holders
true and complete copies of all comments that pertain to the Holders as a “Selling Stockholder” or to the “Plan
of Distribution” and all written responses thereto, but not information that the Company believes would constitute material
and non-public information); and (C) with respect to each Registration Statement or any post-effective amendment, when the same
has become effective; (ii) of any request by the Commission or any other federal or state governmental authority for amendments
or supplements to a Registration Statement or Prospectus or for additional information that pertains to the Holders as “Selling
Stockholders” or the “Plan of Distribution”; (iii) of the issuance by the Commission or any other federal or
state governmental authority of any stop order suspending the effectiveness of a Registration Statement covering any or all of
the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any notification
with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale
in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; and (v) of the occurrence of any event
or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or
any statement made in such Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein
by reference untrue in any material respect or that requires any revisions to such Registration Statement, Prospectus or other
documents so that, in the case of such Registration Statement or the Prospectus, as the case may be, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements
therein (in the case of any Prospectus, form of prospectus or supplement thereto, in light of the circumstances under which they
were made), not misleading.

 

    	C-10

    	 

    

 

(d)          the
Company shall use commercially reasonable best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any
order suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any jurisdiction, as soon as practicable.

 

(e)          the
Company shall, if requested by a Holder, furnish to such Holder, without charge, at least one conformed copy of each Registration
Statement and each amendment thereto and all exhibits to the extent requested by such Person (including those previously furnished
or incorporated by reference) promptly after the filing of such documents with the Commission; provided, that the Company
shall have no obligation to provide any document pursuant to this clause that is available on the Commission’s Electronic
Data-Gathering, Analysis, and Retrieval system.

 

(f)          the
Company shall, prior to any resale of Registrable Securities by a Holder, use its commercially reasonable best efforts to register
or qualify or cooperate with the selling Holders in connection with the registration or qualification (or exemption from the registration
or qualification) of such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions
within the United States as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption
therefrom) effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable
the disposition in such jurisdictions of the Registrable Securities covered by each Registration Statement; provided, that
the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject
the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service of
process in any such jurisdiction.

 

(g)          the
Company shall cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable
Securities to be delivered to a transferee pursuant to the Registration Statement, which certificates shall be free, to the extent
permitted by the Purchase Agreement and under law, of all restrictive legends, and to enable such Registrable Securities to be
in such denominations and registered in such names as any such Holders may reasonably request.  Certificates for Registrable
Securities free from all restrictive legends may be transmitted by the transfer agent to a Holder by crediting the account of such
Holder’s prime broker with DTC as directed by such Holder.

 

    	C-11

    	 

    

 

(h)          the
Company shall following the occurrence of any event contemplated by Section 4(c)(iii)-(v), as promptly as reasonably practicable,
prepare and file a supplement or amendment, including a post-effective amendment, to the affected Registration Statements or a
supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any
other required document so that, as thereafter delivered, no Registration Statement nor any Prospectus will contain an untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein (in
the case of any Prospectus, form of prospectus or supplement thereto, in light of the circumstances under which they were made),
not misleading.

 

(i)          the
Company may require each selling Holder to furnish to the Company a certified statement as to (i) the number of Securities beneficially
owned by such Holder and any Affiliate thereof, (ii) any Financial Industry Regulatory Authority (“FINRA”) affiliations,
(iii) any natural persons who have the power to vote or dispose of the Registrable Securities and (iv) any other information as
may be requested by the Commission, FINRA or any state securities commission.

 

(j)          the
Company shall cooperate with any registered broker through which a Holder proposes to resell its Registrable Securities in effecting
a filing with FINRA pursuant to FINRA Rule 5110 as requested by any such Holder and the Company shall pay the filing fee required
for the first such filing within two (2) Business Days of the request therefor.

 

(k)          the
Company shall use its commercially reasonable best efforts to maintain eligibility for use of Form S-3 (or any successor form thereto)
for the registration of the resale of Registrable Securities.

 

(l)          if
requested by a Holder, the Company shall (i) promptly incorporate in a Prospectus supplement or post-effective amendment to the
Registration Statement such information necessary to facilitate the resale of Registrable Securities and (ii) make all required
filings of such Prospectus supplement or such post-effective amendment as soon as reasonably practicable after the Company has
received notification of the matters to be incorporated in such Prospectus supplement or post-effective amendment.

 

(m)          the
Company shall otherwise use commercially reasonable best efforts to comply with all applicable rules and regulations of the Commission
under the Securities Act and the Exchange Act, including Rule 172, notify the Holders promptly if the Company no longer satisfies
the conditions of Rule 172 and take such other actions as may be reasonably necessary to facilitate the registration of the Registrable
Securities hereunder; and make available to its security holders, as soon as reasonably practicable, but not later than the Availability
Date (as defined below), an earnings statement covering a period of at least twelve (12) months, beginning after the effective
date of each Registration Statement, which earning statement shall satisfy the provisions of Section 11(a) of the Securities Act,
including Rule 158 promulgated thereunder (for the purpose of this Section 4(m), “Availability Date” means the 45th
day following the end of the fourth fiscal quarter that includes the effective date of such Registration Statement, except that,
if such fourth fiscal quarter is the last quarter of the Company’s fiscal year, “Availability Date” means the
90th day after the end of such fourth fiscal quarter).

 

    	C-12

    	 

    

 

5.           Registration
Expenses.  All fees and expenses incident to the Company’s performance of or compliance with its obligations
under this Agreement (excluding any underwriting discounts and selling commissions and all legal fees and expenses of legal counsel
for any Holder (except as set forth below)) shall be borne by the Company whether or not any Registrable Securities are sold pursuant
to a Registration Statement.  The fees and expenses referred to in the foregoing sentence shall include, without limitation,
(i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to
be made with any Trading Market on which the Common Shares are then listed for trading, (B) with respect to compliance with applicable
state securities or Blue Sky laws (including, without limitation, fees and disbursements of counsel for the Company in connection
with Blue Sky qualifications or exemptions of the Registrable Securities and determination of the eligibility of the Registrable
Securities for investment under the laws of such jurisdictions as requested by the Holders) and (C) if not previously paid by the
Company in connection with a filing by the issuer, with respect to any filing that may be required to be made by any broker through
which a Holder intends to make sales of Registrable Securities with FINRA pursuant to FINRA Rule 5110, so long as the broker is
receiving no more than a customary brokerage commission in connection with such sale, (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses if the printing of prospectuses
is reasonably requested by the Holders of a majority of the Registrable Securities included in the Registration Statement), (iii)
messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company and a single counsel for the
Holders, chosen by Holders holding a majority interest in the Registrable Securities being registered, (v) Securities Act liability
insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in
connection with the consummation of the transactions contemplated by this Agreement.  In addition, the Company shall
be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by
this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting
duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities
on any securities exchange as required hereunder.  In no event shall the Company be responsible for any underwriting,
broker or similar fees or commissions of any Holder or, except to the extent provided for in the Transaction Documents or as provided
above, any legal fees or other costs of the Holders.

 

    	C-13

    	 

    

 

 

6.           Indemnification.

 

(a)          Indemnification
by the Company.  The Company shall, notwithstanding any termination of this Agreement, indemnify, defend and hold
harmless each Holder, the officers, directors, agents, partners, members, managers, stockholders, Affiliates, representatives and
employees of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) and the officers, directors, partners, members, managers, stockholders, agents and employees of
each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, actions,
judgments, damages, liabilities, costs (including, without limitation, reasonable costs of preparation and investigation and reasonable
attorneys’ fees) and expenses (collectively, “Losses”), as incurred, that arise out of or are based upon
(i) any violation or alleged violation by the Company of any rule or regulation promulgated under the Exchange Act, the Securities
Act, the Financial Industry Regulatory Authority, Inc. or any state securities laws applicable to the Company and relating to action
or inaction required of the Company in connection with any registration, (ii) any untrue or alleged untrue statement of a material
fact contained in any Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or (iii) any omission or alleged omission to state a material fact required to be stated therein
or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in light
of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that such untrue
statements, alleged untrue statements, omissions or alleged omissions are based solely upon information regarding such Holder (including
such Holder’s proposed method of distribution of Registrable Securities) furnished in writing to the Company by such Holder
expressly for use therein.  The Company shall notify the Holders promptly of the institution, threat or assertion of
any Proceeding arising from or in connection with the transactions contemplated by this Agreement of which the Company is aware.  Such
indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of an Indemnified Party (as
defined in Section 6(c)) and shall survive the transfer of the Registrable Securities by the Holders.

 

(b)          Indemnification
by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted
by applicable law, from and against all Losses, as incurred, arising out of or are based upon any untrue or alleged untrue statement
of a material fact contained in any Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement
thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein (in the case of any Prospectus, or any form of prospectus
or supplement thereto, in light of the circumstances under which they were made) not misleading to the extent, but only to the
extent, that such untrue statements or omissions are based solely upon information regarding such Holder (including such Holder’s
proposed method of distribution of Registrable Securities) furnished in writing to the Company by such Holder expressly for use
therein. In no event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the net
proceeds received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation.

 

(c)          Conduct
of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder
(an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought
(the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense
thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all reasonable
fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give
such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and
only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject
to appeal or further review) that such failure shall have materially and adversely prejudiced the Indemnifying Party.

 

    	C-14

    	 

    

 

An Indemnified Party shall have the right
to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Party or Parties unless:  (1) the Indemnifying Party has agreed in
writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding
and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any
such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified
Party shall have been advised by counsel that a conflict of interest exists if the same counsel were to represent such Indemnified
Party and the Indemnifying Party.  The Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably withheld, delayed or conditioned.  No Indemnifying
Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect
of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.

 

Subject to the terms of this Agreement, all
fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating
or preparing to defend such Proceeding in a manner not inconsistent with this Section 6(c)) shall be paid to the Indemnified Party,
as incurred, within twenty Trading Days of written notice thereof to the Indemnifying Party; provided, that the Indemnified
Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to such actions for
which such Indemnified Party is finally judicially determined to not be entitled to indemnification hereunder). The failure to
deliver written notice to the Indemnifying Party within a reasonable time of the commencement of any such action shall not relieve
such Indemnifying Party of any liability to the Indemnified Party under this Section 6, except to the extent that the Indemnifying
Party is materially and adversely prejudiced in its ability to defend such action.

 

 

(d)          Contribution.  If
a claim for indemnification under Section 6(a) or 6(b) is unavailable to an Indemnified Party or insufficient to hold an Indemnified
Party harmless for any Losses, then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to
the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect
the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.  The relative fault of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including
any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or
made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such action, statement or omission.  The amount
paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement,
any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any Proceeding to
the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section
6(d) was available to such party in accordance with its terms.

 

    	C-15

    	 

    

 

The parties hereto agree that it would not
be just and equitable if contribution pursuant to this Section 6(d) were determined by pro rata allocation or by any other method
of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph.  Notwithstanding
the provisions of this Section 6(d), no Holder shall be required to contribute, in the aggregate, any amount in excess of the amount
by which the net proceeds actually received by such Holder from the sale of the Registrable Securities subject to the Proceeding
exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

 

The indemnity and contribution agreements
contained in this Section 6 are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties
and are not in diminution, limitation or in lieu of the indemnification provisions under the Purchase Agreement.

 

 

7.           Miscellaneous.

 

(a)          Remedies.  In
the event of a breach by the Company or by a Holder of any of their obligations under this Agreement, each Holder or the Company,
as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery
of damages, will be entitled to specific performance of its rights under this Agreement.  The Company and each Holder
agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any
of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect
of such breach, it shall waive the defense that a remedy at law would be adequate.

 

(b)          No
Piggyback on Registrations; Prohibition on Filing Other Registration Statements.  Neither the Company nor any of
its security holders may include securities of the Company in a Registration Statement hereunder and the Company shall not prior
to the Effective Date enter into any agreement providing any such right to any of its security holders. The Company shall not,
from the date hereof until the date that is 60 days after the Effective Date of the Initial Registration Statement, prepare and
file with the Commission a registration statement relating to an offering for its own account under the Securities Act of any of
its equity securities, other than (i) a registration statement on Form S-8, (ii) in connection with an acquisition, on Form S-4
or (iii) a registration statement to register for resale securities issued by the Company pursuant to acquisitions or strategic
transactions approved by a majority of the disinterested directors of the Company, provided that any such issuance shall only be
to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the
Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction
in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business
is investing in securities.  For the avoidance of doubt, the Company shall not be prohibited from preparing and filing
with the Commission a registration statement relating to an offering of Securities by existing stockholders of the Company under
the Securities Act pursuant to the terms of registration rights held by such stockholder or from filing amendments to registration
statements filed prior to the date of this Agreement.

 

    	C-16

    	 

    

 

(c)          Compliance.  Each
Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to
it (unless an exemption therefrom is available) in connection with sales of Registrable Securities pursuant to the Registration
Statement and shall sell the Registrable Securities only in accordance with a method of distribution described in the Registration
Statement.

 

(d)          Discontinued
Disposition.  By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of a notice from
the Company of the occurrence of any event of the kind described in Section 4(c)(iii)-(v), such Holder will forthwith discontinue
disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the “Advice”)
by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company
may provide appropriate stop orders to enforce the provisions of this paragraph.

 

(e)          No
Inconsistent Agreements.  Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor
shall the Company or any of its Subsidiaries, on or after the date hereof, enter into any agreement with respect to its securities,
that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions
hereof.

 

(f)          Amendments
and Waivers.  The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified
or supplemented, or waived unless the same shall be in writing and signed by the Company and Holders holding at least two-thirds
of the then outstanding Registrable Securities, provided that any party may give a waiver as to itself.  Notwithstanding
the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively
to the rights of Holders and that does not directly or indirectly affect the rights of other Holders may be given by Holders of
all of the Registrable Securities to which such waiver or consent relates; provided, however, that the provisions
of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding
sentence. Notwithstanding the foregoing, if any such amendment, modification or waiver would adversely affect in any material respect
any Holder or group of Holders who have comparable rights under this Agreement disproportionately to the other Holders having such
comparable rights, such amendment, modification, or waiver shall also require the written consent of the Holder(s) so adversely
affected.

 

    	C-17

    	 

    

 

(g)          Notices.  Any
and all notices or other communications or deliveries required or permitted to be provided hereunder shall be delivered as set
forth in the Purchase Agreement; provided that the Company may deliver to each Holder the documents required to be delivered to
such Holder under Section 6(a) of this Agreement by e-mail to the e-mail addresses provided by such Holder to the Company solely
for such specific purpose.

 

(h)          Successors
and Assigns.  This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns
of each of the parties and shall inure to the benefit of each Holder.  Nothing in this Agreement, express or implied,
is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.  The
Company may not assign its rights (except by merger or in connection with another entity acquiring all or substantially all of
the Company’s assets) or obligations hereunder without the prior written consent of all the Holders of the then outstanding
Registrable Securities.  Each Holder may assign its respective rights hereunder in the manner and to the Persons as permitted
under the Purchase Agreement.

 

(i)          Execution
and Counterparts.  This Agreement may be executed in two or more counterparts, each of which when so executed shall
be deemed to be an original and, all of which taken together shall constitute one and the same Agreement and shall become effective
when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not
sign the same counterpart.  In the event that any signature is delivered by facsimile transmission or by e-mail delivery
of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature
were the original thereof.

 

(j)          Governing
Law.  All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall
be determined in accordance with the provisions of the Purchase Agreement.

 

(k)          Cumulative
Remedies.  The remedies provided herein are cumulative and not exclusive of any other remedies provided by law.

 

(l)           Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their good faith commercially
reasonable best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction.  It is hereby stipulated and declared to be the intention of the parties
that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may
be hereafter declared invalid, illegal, void or unenforceable.

 

    	C-18

    	 

    

 

(m)          Headings.  The
headings in this Agreement are for convenience only and shall not limit or otherwise affect the meaning hereof.

 

(n)          Independent
Nature of Purchasers’ Obligations and Rights.  The obligations of each Purchaser under this Agreement are several
and not joint with the obligations of any other Purchaser hereunder, and no Purchaser shall be responsible in any way for the performance
of the obligations of any other Purchaser hereunder.  The decision of each Purchaser to purchase the Securities pursuant
to the Transaction Documents has been made independently of any other Purchaser. Nothing contained herein or in any other agreement
or document delivered at any closing, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute
the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert with respect to such obligations or the transactions contemplated by this Agreement.  Each
Purchaser acknowledges that no other Purchaser has acted as agent for such Purchaser in connection with making its investment hereunder
and that no Purchaser will be acting as agent of such Purchaser in connection with monitoring its investment in the Securities
or enforcing its rights under the Transaction Documents. Each Purchaser shall be entitled to protect and enforce its rights, including,
without limitation, the rights arising out of this Agreement, and it shall not be necessary for any other Purchaser to be joined
as an additional party in any Proceeding for such purpose.  The Company acknowledges that each of the Purchasers has
been provided with the same Registration Rights Agreement for the purpose of closing a transaction with multiple Purchasers and
not because it was required or requested to do so by any Purchaser.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,

SIGNATURE PAGES TO FOLLOW]

 

    	C-19

    	 

    

 

IN WITNESS WHEREOF, the parties have executed
this Registration Rights Agreement as of the date first written above.

 

	 	 	CORDIA BANCORP INC.
	 	 	 
	 	 	
	 	By:	Jack Zoeller
	 	Its: 	President and Chief Executive Officer

 

[REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK,

SIGNATURE PAGES OF HOLDERS TO FOLLOW]

 

    	C-20

    	 

    

 

IN WITNESS WHEREOF, the parties have executed
this Registration Rights Agreement as of the date first written above.

 

	NAME OF PURCHASER	 
	 	 

 

	AUTHORIZED SIGNATORY	 
	 	 
	 	 
	By:  	   	 
	Its: 	 	 

 

	ADDRESS FOR NOTICE:	 
	 	 
	   	 
	 	 
	 	 
	 	 
	 	 

 

	Attn: 	  	 
	Phone: 	 	 
	E-mail: 	 	 

 

    	C-21

    	 

    

Annex A

 

PLAN OF DISTRIBUTION

 

We are registering the Securities issued
to the selling shareholders to permit the resale of these Securities by the holders of the Securities from time to time after the
date of this prospectus. We will not receive any of the proceeds from the sale by the selling shareholders of the Securities. We
will bear all fees and expenses incident to our obligation to register the Securities.

 

The selling shareholders may sell all or
a portion of the Securities beneficially owned by them and offered hereby from time to time directly or through one or more underwriters,
broker-dealers or agents. If the Securities are sold through underwriters or broker-dealers, the selling shareholders will be responsible
for underwriting discounts or commissions or agent’s commissions. The Securities may be sold on any national securities exchange
or quotation service on which the securities may be listed or quoted at the time of sale, in the over-the-counter market or in
transactions otherwise than on these exchanges or systems or in the over-the-counter market and in one or more transactions at
fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or at negotiated
prices. These sales may be effected in transactions, which may involve crosses or block transactions. The selling shareholders
may use any one or more of the following methods when selling Securities:

 

		·	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

 

		·	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;

 

		·	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

 

		·	an exchange distribution in accordance with the rules of the applicable exchange;

 

		·	privately negotiated transactions;

 

		·	settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a
part;

 

		·	broker-dealers may agree with the selling shareholders to sell a specified number of such securities at a stipulated price
per share;

 

		·	through the writing or settlement of options or other hedging transactions, whether such options are listed on an options exchange
or otherwise;

 

		·	a combination of any such methods of sale; and

 

    	 

    	 

    

 

		·	any other method permitted pursuant to applicable law.

 

The selling shareholders also may resell
all or a portion of the Securities in open market transactions in reliance upon Rule 144 under the Securities Act, as permitted
by that rule, or Section 4(a)(1) under the Securities Act, if available, rather than under this prospectus, provided that
they meet the criteria and conform to the requirements of those provisions.

 

Broker-dealers engaged by the selling shareholders
may arrange for other broker-dealers to participate in sales. If the selling shareholders effect such transactions by selling Securities
to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the
form of discounts, concessions or commissions from the selling shareholders or commissions from purchasers of the Securities for
whom they may act as agent or to whom they may sell as principal. Such commissions will be in amounts to be negotiated, but, except
as set forth in a supplement to this prospectus, in the case of an agency transaction will not be in excess of a customary brokerage
commission in compliance with NASD Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with
NASD IM-2440-1 and IM-2440-2.

 

In connection with sales of the Securities
or otherwise, the selling shareholders may enter into hedging transactions with broker-dealers or other financial institutions,
which may in turn engage in short sales of the Securities in the course of hedging in positions they assume. The selling shareholders
may also sell Securities short and if such short sale shall take place after the date that the registration statement of which
this prospectus is a part is declared effective by the Securities and Exchange Commission (the “SEC”), the selling
shareholders may deliver Securities covered by this prospectus to close out short positions and to return borrowed shares in connection
with such short sales. The selling shareholders may also loan or pledge Securities to broker-dealers that in turn may sell such
shares, to the extent permitted by applicable law. The selling shareholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery
to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other
financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction). Notwithstanding
the foregoing, the selling shareholders have been advised that they may not use shares registered on this registration statement
to cover short sales of our Securities made prior to the date the registration statement, of which this prospectus forms a part,
has been declared effective by the SEC.

 

The selling shareholders may, from time
to time, pledge or grant a security interest in some or all of the Securities owned by them and, if they default in the performance
of their secured obligations, the pledgees or secured parties may offer and sell the Securities from time to time pursuant to this
prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act, amending,
if necessary, the list of selling shareholders to include the pledgee, transferee or other successors in interest as selling shareholders
under this prospectus. The selling shareholders also may transfer and donate the Securities in other circumstances in which case
the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

 

    	 

    	 

    

 

The selling shareholders and any broker-dealer
or agents participating in the distribution of the Securities may be deemed to be “underwriters” within the meaning
of Section 2(11) of the Securities Act in connection with such sales. In such event, any commissions paid, or any discounts
or concessions allowed to, any such broker-dealer or agent and any profit on the resale of the shares purchased by them may be
deemed to be underwriting commissions or discounts under the Securities Act. Selling shareholders who are “underwriters”
within the meaning of Section 2(11) of the Securities Act will be subject to the applicable prospectus delivery requirements
of the Securities Act and may be subject to certain statutory liabilities of, including but not limited to, Sections 11, 12 and
17 of the Securities Act and Rule 10b-5 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

Each selling shareholder has informed us
that it is not a registered broker-dealer and does not have any written or oral agreement or understanding, directly or indirectly,
with any person to distribute the Securities. Upon being notified in writing by a selling shareholder that any material arrangement
has been entered into with a broker-dealer for the sale of Securities through a block trade, special offering, exchange distribution
or secondary distribution or a purchase by a broker or dealer, we will file a supplement to this prospectus, if required, pursuant
to Rule 424(b) under the Securities Act, disclosing (1) the name of each such selling shareholder and of the participating
broker-dealer(s), (2) the number of shares involved, (3) the price at which such Securities were sold, (4) the commissions
paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (5) that such broker-dealer(s) did not
conduct any investigation to verify the information set out or incorporated by reference in this prospectus, and (6) other
facts material to the transaction. In no event shall any broker-dealer receive fees, commissions and markups, which, in the aggregate,
would exceed eight percent.

 

Under the securities laws of some states,
the Securities may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the
Securities may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration
or qualification is available and is complied with.

 

There can be no assurance that any selling
shareholder will sell any or all of the Securities registered pursuant to the shelf registration statement, of which this prospectus
forms a part.

 

Each selling shareholder and any other
person participating in such distribution will be subject to applicable provisions of the Exchange Act and the rules and regulations
thereunder, including, without limitation, to the extent applicable, Regulation M of the Exchange Act, which may limit the timing
of purchases and sales of any of the Securities by the selling shareholder and any other participating person. To the extent applicable,
Regulation M may also restrict the ability of any person engaged in the distribution of the Securities to engage in market-making
activities with respect to the Securities. All of the foregoing may affect the marketability of the Securities and the ability
of any person or entity to engage in market-making activities with respect to the Securities. We will pay all expenses of the registration
of the Securities pursuant to a registration rights agreement, including, without limitation, SEC filing fees and expenses of compliance
with state securities or “blue sky” laws; provided, however, that each selling shareholder will pay all underwriting
discounts and selling commissions, if any and any related legal expenses incurred by it. We will indemnify the selling shareholders
against certain liabilities, including some liabilities under the Securities Act, in accordance with the registration rights agreement,
or the selling shareholders will be entitled to contribution. We may be indemnified by the selling shareholders against civil liabilities,
including liabilities under the Securities Act, that may arise from any written information furnished to us by the selling shareholders
specifically for use in this prospectus, in accordance with the related registration rights agreements, or we may be entitled to
contribution.

 

    	 

    	 

    

 

Annex B

 

SELLING STOCKHOLDER QUESTIONNAIRE

 

The undersigned beneficial
owner (the “Selling Shareholder”) of shares of capital stock (the “Securities”) of Cordia
Bancorp Inc. (the “Company”) understands that the Company has filed or intends to file with the Securities and
Exchange Commission (the “Commission”) a Registration Statement for the registration and resale of Securities
that qualify as Registrable Securities, in accordance with the terms of a Registration Rights Agreement (the “Registration
Rights Agreement”) between the Company and the Purchasers named therein. The undersigned hereby provides the following
information to the Company and represents and warrants that such information is accurate. All capitalized terms used and not otherwise
defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.

 

QUESTIONNAIRE

 

	1.	Name.
	 	 
	(a)	Full legal name of Selling Shareholder:  _______________________________________________________
	 	 
	(b)	Full legal name of Registered Holder (if not the same as (a) above) through which Registrable Securities listed in item 3 below are held:
	 	 
	 	 
	(c)	Full legal name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by the questionnaire):
	 	 
	 	 
	2.	Contact Information.
	 	 
	(a)	Address for Notices to Selling Shareholder:
	 	 
	 	 
	 	 
	 	 
	(b)	Contact Person: ____________________________________________________________________________
	 	 
	(c)	Telephone: ________________________________________________________________________________
	 	 
	(d)	Fax:    ____________________________________________________________________________________

 

    	 

    	 

    

 

	3.	Beneficial Ownership of Registrable Securities.

 

Type
and number of shares of Registrable Securities beneficially owned and purchased pursuant to the Securities Purchase
Agreement[1]:

 

	 	 
	 	 
	4.	Broker-Dealer Status.

 

	(a)	Are you a broker-dealer?

 

Yes:  ̈                    No:
 ̈

 

Note: If yes, the Commission’s staff
has indicated that you should be identified as an underwriter in the Registration Statement.

 

	(b)	Are you an affiliate of a broker-dealer?

 

Yes:  ̈                   No:
 ̈

 

	(c)	If you are an affiliate of a broker-dealer, do you certify that you bought the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities?

 

Yes:  ̈                 No:  ̈

 

Note: If no, the Commission’s staff
has indicated that you should be identified as an underwriter in the Registration Statement.

 

 

1 Securities “beneficially
owned” would include securities held by you for your own benefit, whether in bearer form or registered in your own name or
otherwise (regardless of whether or how they are registered), such as, for example, securities held for you by custodians, brokers,
relatives, executors, administrators or trustees, and securities held for your account by pledgees, securities owned by a partnership
in which you are a member, and securities owned by any corporation which is or should be regarded as a personal holding corporation
of yours. You are also considered to be the beneficial owner of a security if you, directly or indirectly, through any contract,
arrangement, understanding, relationship or otherwise have or share: (1) voting power, which includes the power to vote, or to
direct the voting of, such security or (2) investment power, which includes the power to dispose, or to direct the disposition,
of such security. You are also the beneficial owner of a security if you, directly or indirectly, create or use a trust, proxy,
power of attorney, pooling arrangement or any other contract, arrangement or device with the purpose or effect of divesting yourself
of beneficial ownership of a security or preventing the vesting of such beneficial ownership. Finally, you are deemed to be the
beneficial owner of a security if you have the right to acquire beneficial ownership of such security at any time within sixty
days, including but not limited to any right to acquire (a) through the exercise of any option, warrant or right, (b) through the
conversion of a security, (c) pursuant to the power to revoke a trust, discretionary account or similar arrangement or (d) pursuant
to the automatic termination of a trust, discretionary account or similar arrangement.

 

    	 

    	 

    

 

	5.	Beneficial Ownership of Securities of the Company Other than the Registrable Securities Owned by the Selling Shareholder.

 

Except as set forth
below in this Item 5, the undersigned is not the beneficial or registered owner of any securities of the Company other than the
Registrable Securities listed above in Item 3.

 

Type and amount of other securities beneficially
owned by the Selling Shareholder:

 

	 
	 
	 
	 
	 
	 
	 

 

	6.	Relationships with the Company.

 

Except as set forth
below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more
of the equity securities of the undersigned) has held any position or office or has had any other material relationship with the
Company (or its predecessors or affiliates) during the past three years.

 

State any exceptions here:

 

	 
	 
	 
	 
	 
	 
	 

 

	7.	Registration Statement Information.

 

Please fill in the
table below as you would like it to appear in the Registration Statement. Include footnotes where appropriate.

 

	Name of Selling Shareholder:	 
	Number of Shares of Common Stock Beneficially Owned Prior to Offering:	 
	Maximum Number of Shares of Common Stock (Assuming the Conversion of All Shares of Preferred Stock and Non-Voting Common Stock Purchased Pursuant to the Securities Purchase Agreement) to be Sold Pursuant to the Registration Statement:	 
	Number of Shares of Common Stock Beneficially Owned After Offering:	 

 

    	 

    	 

    

 

The undersigned agrees
to promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the
date hereof and prior to the Effective Date for the Registration Statement.

 

By signing below, the
undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 7 and the inclusion
of such information in the Registration Statement and the related prospectus. The undersigned understands that such information
will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the related
prospectus.

 

[Remainder of page intentionally blank]

 

    	 

    	 

    

 

IN WITNESS WHEREOF,
the undersigned, by authority duly given, has caused this Selling Shareholder Questionnaire to be executed and delivered either
in person or by its duly authorized representative.

 

	 	 
	 	Name of Beneficial Owner
	 	 
	 	 
	 	Signature of Authorized Representative
	 	 
	 	 
	 	Name of Authorized Representative
	 	 
	 	 
	 	Title of Authorized Representative
	 	 
	 	 
	 	Date

 

PLEASE (1) FAX OR EMAIL A COPY OF THE COMPLETED
AND EXECUTED

QUESTIONNAIRE, AND (2) RETURN THE ORIGINAL
BY

OVERNIGHT MAIL, TO:

 

	Attn: _______________________
	 
	Facsimile: _______________________
	 
	Email: ________________________

 

    	 

    	 

       

EXHIBIT D

 

Voting Agreement

 

______________, 2014

 

Cordia Bancorp Inc.

11730 Hull Street Road

Midlothian, Virginia 23112

 

Dear Ladies and Gentlemen:

 

The undersigned (the
“Shareholder”) owns shares, either of record or beneficially, of the common stock of Cordia Bancorp Inc. (“Cordia”).
The Shareholder understands that Cordia intends to enter into a Securities Purchase Agreement with various investors providing
for the sale of Mandatorily Convertible, Noncumulative, Nonvoting, Perpetual Preferred Stock, Series A (“Series A Preferred
Stock”). The Series A Preferred Stock is convertible into common stock and nonvoting common stock of Cordia upon the
approval of Cordia’s shareholders (the “Conversion”).

 

The Shareholder is
entering into this Voting Agreement to induce potential investors to enter into the Securities Purchase Agreement and purchase
the Series A Preferred Stock.

 

The Shareholder confirms
his agreement with Cordia as follows:

 

1.          The
Shareholder agrees to vote (or cause to be voted) all of the shares of Cordia common stock owned by him in favor of the Conversion
at any meeting of shareholders of Cordia called to consider and vote on the Conversion.

 

2.          The
Shareholder represents and warrants to Cordia that (a) the Shareholder has full legal capacity, power and authority to enter into
and perform this Voting Agreement, and (b) this Voting Agreement is the legal, valid and binding agreement of the Shareholder enforceable
against the Shareholder in accordance with its terms, subject to bankruptcy, insolvency and other laws of general applicability
relating to or affecting creditors’ rights and to general equity principles.

 

3.          This
Voting Agreement shall automatically terminate upon the first to occur of (a) termination of the Securities Purchase Agreement
in accordance with its terms; (b) consummation of the Conversion; or (c) mutual agreement in writing of the parties hereto providing
for the termination hereof.

 

4.          This
Voting Agreement may be amended, modified or supplemented at any time by mutual agreement in writing of the parties hereto, subject
to the approval of Purchasers holding (or having a right to purchase) a majority of the outstanding shares of Series A Preferred
Stock

 

    	 

    	 

    

 

5.          This
Voting Agreement evidences the entire agreement between the parties hereto with respect to the matters provided for herein, and
there are no agreements, representations or warranties with respect to the matters provided for herein other than those set forth
herein.

 

6.          The
parties agree that, if any provision of this Voting Agreement shall under any circumstances be deemed invalid or inoperative, this
Voting Agreement shall be construed with the invalid or inoperative provisions deleted, and the rights and obligations of the parties
shall be construed and enforced accordingly.

 

7.          This
Voting Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same agreement.

 

8.          The
validity, construction, enforcement and effect of this Voting Agreement shall be governed by the laws of the Commonwealth of Virginia.

 

9.          This
Voting Agreement shall inure to the benefit of, and shall be binding upon, the parties hereto and upon their respective executors,
personal representatives, administrators, heirs, legatees, guardians, other legal representatives and successors. This Voting Agreement
shall survive the death or incapacity of the Shareholder.

 

10.         Nothing
in this Voting Agreement shall be construed to give Cordia any rights to exercise or direct the exercise of voting power as owner
of the Shares or to vest in Cordia any direct or indirect ownership or incidents of ownership of or with respect to any of the
Shares. All rights, ownership and economic benefits of and relating to the Shares shall remain vested in and belong to the Shareholder,
notwithstanding the provisions of this Voting Agreement, and Cordia shall have no authority to exercise any power or authority
to direct the Shareholder in voting any of the Shares, except as otherwise expressly provided herein.

 

11.         The
Shareholder agrees that, in the event of his, her or its breach of any of the terms of this Voting Agreement, Cordia shall be entitled
to such remedies and relief against the Shareholder as are available at law or in equity. The Shareholder acknowledges that there
is not an adequate remedy at law to compensate Cordia for a violation of this Voting Agreement, and irrevocably waives, to the
extent permitted by law, any defense that he might have based on the adequacy of a remedy at law which might be asserted as a bar
to specific performance, injunctive relief, or other equitable relief. The Shareholder agrees to the granting of injunctive relief,
without the posting of any bond, and further agrees that if any bond shall be required, such bond shall be in a nominal amount.

 

12.         This
Agreement is intended to benefit each of the Purchasers, as defined in the Securities Purchase Agreement, and shall be enforceable
by the Purchasers, or any of them.

 

13.         No
provision of this Agreement shall preclude or in any way limit the Shareholder from exercising his fiduciary duties as a member
of the Board of Directors of Cordia.

 

    	-2-

    	 

    

 

14.         The
Shareholder hereby authorizes Cordia to publish and disclose in any announcement or disclosure required by the Securities and Exchange
Commission and in the Proxy Statement for the meeting of shareholders of Cordia called to consider and vote on the Conversion the
Shareholder’s identity and ownership of the Shares and the nature of the Shareholder’s obligations under this Voting
Agreement.

 

Please confirm that
the foregoing correctly states the understanding between the Shareholder and Cordia by signing and returning to the Shareholder
a counterpart hereof.

 

[Signature
Page Follows.] 

 

    	-3-

    	 

    

 

Signature
of Shareholder:

 

			

	 	Very truly yours,
	 	 
	 	 
	 	(Signature)
	 	 
	 	 
	 	(Print Name of Shareholder)

 

 

	Accepted and Agreed to as of this	 
	_____ day of ____________, 2014:	 
	 	 
	CORDIA BANCORP INC.	 
	 	 
	By:	 	 
	 	Authorized Officer	 

 

    	-4-

    	 

    

 

 

EXHIBIT
E

 

 

FORM OF OPINION OF COMPANY COUNSEL

 

[Intentionally Omitted]

 

    	 

    	 

    

 

 

EXHIBIT F

 

FORM OF

SECRETARY’S CERTIFICATE

OF 

CORDIA BANCORP INC.

 

The undersigned, John P. Wright hereby
certifies that he is the duly elected and acting Secretary of Cordia Bancorp Inc., a Virginia corporation (the “Company”),
and that he makes this certificate on behalf of the Company (and not in his individual capacity) in connection with and pursuant
to Section 2.2(a)(iv) of the Securities Purchase Agreement dated as of ________, 2014 (the “Securities Purchase
Agreement”), by and among the Company and each of the purchasers named therein. Capitalized terms, unless otherwise defined
herein, shall have the meanings assigned to them in the Securities Purchase Agreement.

 

The undersigned hereby certifies on behalf
of the Company that:

 

1.            
The following individuals have been and are now duly elected and qualified officers of the Company and on the date hereof hold
and on the date they executed the Transaction Documents held the offices set forth opposite each name below, the signature appearing
opposite each name is the true and authentic signature of such officer, and such officer was duly authorized to sign the Securities
Purchase Agreement and the other agreements and documents contemplated thereunder and the taking of all actions contemplated thereunder
on behalf of the Company:

 

	Name 	 	Office 	 	Signature 
	 	 	 	 	 
	Jack C. Zoeller 	 	President and Chief Executive Officer 	 	 
	 	 	 	 	 
	Mark A. Severson 	 	Executive Vice President and 

Chief Financial Officer 	 	 
	 	 	 	 	 
	John Wright 	 	Secretary 	 	 

 

2.            
Attached hereto as Exhibit A is a true, complete and correct copy of the Articles of Incorporation of the Company, with
all amendments thereto, and the same has not been further amended, modified or terminated, and is in full force and effect as of
the date hereof.

 

3.            
Attached hereto as Exhibit B is a true, complete and correct copy of the Bylaws of the Company, with all amendments thereto,
and the same has not been further amended, modified or terminated, and is in full force and effect as of the date hereof.

 

    	 

    	 

    

 

4.            
Attached hereto as Exhibit C are true and correct copies of the resolutions duly adopted by the Board of Directors authorizing
the execution, delivery and performance of the Securities Purchase Agreement and other Transaction Documents and the consummation
of the transactions contemplated thereby and therein.  Such resolutions were duly and validly adopted by the board of directors
at a meeting held on January 29, 2014.  The resolutions have not been modified or rescinded as of the date hereof, and are
in full force and effect on the date hereof.

 

[Remainder of page intentionally blank]

 

    	 

    	 

    

 

IN WITNESS WHEREOF, I have hereunto
set my hand this _____ day of _____________________, 2014.

 

	 	 
	 	John P. Wright
	 	Corporate Secretary 

 

 

I, Jack C. Zoeller, President and Chief
Executive Officer of the Company, do hereby certify that John P. Wright is the duly elected or appointed Secretary of the
Company and the signature on the foregoing certificate is his genuine signature.

 

IN WITNESS WHEREOF, I have hereunto
set my hand this _____ day of ____________________, 2014.

 

	 	 
	 	 
	 	Jack C. Zoeller
	 	President and Chief Executive Officer

 

    	 

    	 

    

 

EXHIBIT G

 

OFFICER’S CERTIFICATE

 

___________, 2014

 

In accordance with Section 5.1(g) of
the Securities Purchase Agreement dated as of _______________, 2014 (the “Securities Purchase Agreement”), by and among
Cordia Bancorp Inc., a Virginia corporation (the “Company”), and each of the purchasers named therein, the undersigned
officer of the Company certifies on behalf of the Company (and not in his individual capacity) as follows:

 

1.          The
representations and warranties of the Company contained in the Securities Purchase Agreement are true and correct in all material
respects as of the Closing Date, as though made on and as of the Closing Date, except for such representations and warranties that
speak as of a specific date, which are true and correct in all material respects as of such date; provided, however, that
any representations or warranties of the Company qualified as to materiality or Material Adverse Effect in the Securities Purchase
Agreement are true and correct in all respects.

 

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

 

Capitalized terms used but not otherwise
defined herein shall have the respective meanings set forth in the Securities Purchase Agreement.

 

[Remainder of page
intentionally blank]

 

    	 

    	 

    

 

IN WITNESS WHEREOF, the undersigned have
executed this Officer’s Certificate, solely in his representative capacity on behalf of the Company, as of the date first
written above.

 

	 	CORDIA BANCORP INC.
	 	 
	 	By:	 
	 		Jack C. Zoeller
	 		President and Chief Executive Officer

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