ASSET PURCHASE AGREEMENT

among

CAROLINA FINANCIAL CORPORATION,

CRESCENT MORTGAGE COMPANY,

a Delaware corporation

COMMUNITY FIRSTBANK

and

CRESCENT MORTGAGE SERVICES, INC.,

a Georgia corporation

Dated as of November 3, 2003

TABLE OF CONTENTS

-i-

-ii-

-iii-

SCHEDULES

-iv-

EXHIBITS

-v-

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this Agreement) is made and entered into as of November 3, 2003, among Carolina Financial Corporation, a Delaware corporation (Carolina), and its wholly owned subsidiary that is being organized, Crescent Mortgage Company, a Delaware corporation (Newco, and together with Carolina, Purchaser), Community FirstBank of Charleston, a South Carolina bank (FirstBank), joining in the Agreement solely for the limited purposes set forth in Sections 1.1(a) and 1.1(b), Section 1.3(b) and Section 12.2, and Crescent Mortgage Services, Inc., a Georgia corporation (Seller).

WHEREAS, Seller is engaged in the business of originating, buying, servicing and selling residential first mortgage loans on a wholesale basis with third party originators, sellers and purchasers (the Business);

WHEREAS, Crescent Banking Company, a Georgia corporation (Crescent), and the parent of Seller, has decided to exit the Business as provided herein and Purchaser seeks to acquire and continue the Business;

WHEREAS, Seller desires to sell and Purchaser desires to purchase certain of the assets and assume certain of the liabilities of the Business, as described herein, for the consideration and on the terms set forth in this Agreement; and

WHEREAS, certain capitalized terms used in this Agreement are defined in Section 13.1 of this Agreement;

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

ARTICLE 1 PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES

On and subject to the terms and conditions of this Agreement, at the Closing, Seller shall sell, assign, transfer, convey, and deliver to Purchaser, free and clear of all Liens other than Permitted Encumbrances, and Purchaser shall purchase, acquire and accept from Seller, all of the right, title, and interest of Seller in and to the assets, properties, and rights of Seller relating to or utilized in the Business (other than the Excluded Assets) as of the Closing Date listed below (the Acquired Assets):

(a) by assignment and assumption of leases, all of Sellers rights in, to, and under the Real Property Leases set forth on Schedule 3.12(a) of the Disclosure Schedules, and including security deposits thereon which are not Excluded Assets;

(b) the Equipment and Leasehold Improvements set forth on Schedule 1.1(b) of the Disclosure Schedules as such Schedule shall be updated as of the close of business on the last Business Day prior to the Closing Date, and including security deposits thereon which are not Excluded Assets;

(c) all of the rights relating to the Mortgage Loans (whether or not funds have been disbursed to the customer and whether or not unexercised borrower rights of rescission exist as of such time) owned by Seller and held for sale as of the close of business on the last Business Day prior to the Closing Date, including, in the case of Mortgage Loans held subject to flow agreements with Chase Manhattan Mortgage Corp. or its affiliates or others, the mortgage servicing rights related to such Mortgage Loans, as will be set forth on Schedule 1.1(c) of the Disclosure Schedules on the Closing Date, and including security deposits thereon which are not Excluded Assets;

(d) the rights in, to and under the Pipeline Loans of the Business as of the close of business on the last Business Day prior to the Closing Date, as will be set forth on Schedule 1.1(d) on the Closing Date;

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