FORM OF
SECURITIES PURCHASE AGREEMENT
by and among
THE UNITED STATES DEPARTMENT OF THE TREASURY,
[l]
and, for the purposes of Section 4.02, Section 5.02(D), Section 7.01 and Section
7.04 of this Agreement,
FIRST SECURITY GROUP, INC.
Dated as of [l], 2013

1

--------------------------------------------------------------------------------

Table of Contents
 
 
 
 
Page
I
DEFINITIONS.
 
 
1.01.
 
Definitions of Certain Terms
 
 
1.02.
 
Interpretation
 
 
1.03.
 
Changes Affecting the Shares
 
II
THE SECURITIES PURCHASE.
 
 
2.01.
 
Purchase and Sale of the Shares
 
 
2.02.
 
Closing of the Securities Purchase
 
III
REPRESENTATIONS AND WARRANTIES.
 
 
3.01.
 
Representations and Warranties of the Purchaser
 
IV
COVENANTS.
 
 
4.01.
 
Forbearances of the Seller
 
 
4.02.
 
Further Action
 
 
4.03.
 
Investment Agreement
 
V
CONDITIONS TO THE CLOSING.
 
 
5.01.
 
Conditions to Each Party’s Obligations
 
 
5.02.
 
Condition to Obligations of the Seller
 
VI
TERMINATION.
 
 
6.01.
 
Termination Events
 
 
6.02.
 
Effect of Termination
 
VII
MISCELLANEOUS.
 
 
7.01.
 
Waiver; Amendment
 
 
7.02.
 
Counterparts
 
 
7.03.
 
Governing Law; Choice of Forum; Waiver of Jury Trial.
 
 
7.04.
 
Expenses
 
 
7.05.
 
Notices
 
 
7.06.
 
Entire Understanding; No Third Party Beneficiaries
 
 
7.07.
 
Assignment
 
 
7.08.
 
Severability
 

i

--------------------------------------------------------------------------------

SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (as amended, supplemented or otherwise
modified from time to time, this “Agreement”) is dated as of [l], 2013 by and
among the United States Department of the Treasury (the “Seller”), [l], a [l]
(the “Purchaser”), and, for the purposes of Section 4.02, Section 5.02(D),
Section 7.01 and Section 7.04 of this Agreement, First Security Group, Inc., a
Tennessee corporation (the “Company”).
RECITALS
WHEREAS, the Company and the Seller entered into an exchange agreement (the
“Exchange Agreement”), pursuant to which the Company will issue to the Seller
shares of Common Stock (the “Shares”), in exchange for the Seller’s (i) 33,000
shares of the Company’s preferred stock designated as Fixed Rate Cumulative
Perpetual Preferred Stock, Series A, and (ii) a ten-year warrant to purchase up
to 82,363 shares of Common Stock (the “Exchange”);

WHEREAS, concurrently herewith, the Company is entering into an investment
agreement with the Purchaser (the “Investment Agreement”) pursuant to which,
among other things, the Company will provide to the Purchaser customary
representations, warranties and indemnification with respect to the Company, the
Purchased Shares (as defined below) and the Securities Purchase (as defined
below); and
WHEREAS, conditioned upon the closing of the Exchange, the Company and the
Seller desire that the Seller sell to the Purchaser, and the Purchaser desires
to purchase from the Seller, subject to the terms and conditions contained in
this Agreement, [ν] Shares at a purchase price of $1.50 per Share (the
“Securities Purchase”).
NOW, THEREFORE, in consideration of the premises, and of the various
representations, warranties, covenants and other agreements and undertakings of
the parties hereto, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
AGREEMENT
IDEFINITIONS.
1.01.    Definitions of Certain Terms. For purposes of this Agreement, the
following terms are used with the meanings assigned below (such definitions to
be equally applicable to both the singular and plural forms of the terms herein
defined):
“Affiliate” means, with respect to any person, any person directly or indirectly
controlling, controlled by or under common control with, such other person. For
purposes of this definition, “control” (including, with correlative meanings,
the terms “controlled by” and “under common control with”) when used with
respect to any person, means the possession, directly or indirectly,

--------------------------------------------------------------------------------

of the power to cause the direction of management and/or policies of such
person, whether through the ownership of voting securities by contract or
otherwise.
“Agreement” has the meaning set forth in the introductory paragraph of this
agreement.
“Anchor Investment Agreements” has the meaning set forth in the Exchange
Agreement.
“Bank” shall mean FSGBank, National Association.
“BHCA” shall mean the Bank Holding Company Act of 1956, as amended.
“Business Day” means any day that is not a Saturday, a Sunday or other day on
which banking organizations in the State of New York or the State of Tennessee
are required or authorized by Law to be closed.
“Closing” has the meaning set forth in Section 2.02(A).
“Closing Date” has the meaning set forth in Section 2.02(A).
“Common Stock” means the Company’s common stock, par value $0.01 per share.
“Company” has the meaning set forth in the recitals to this Agreement.
“Company Material Adverse Effect” means a material adverse effect on the
business, results of operation or financial condition of the Company and its
consolidated Subsidiaries taken as a whole; provided, however, that Company
Material Adverse Effect shall not be deemed to include the effects of (i)
changes after the date hereof in general business, economic or market conditions
(including changes generally in prevailing interest rates, credit availability
and liquidity, currency exchange rates and price levels or trading volumes in
the United States or foreign securities or credit markets), or any outbreak or
escalation of hostilities, declared or undeclared acts of war or terrorism, in
each case generally affecting the industries in which the Company and its
Subsidiaries operate, (ii) changes or proposed changes after the date hereof in
United States generally accepted accounting principles or regulatory accounting
requirements, or authoritative interpretations thereof, (iii) changes or
proposed changes after date hereof in securities, banking and other laws of
general applicability or related policies or interpretations of Governmental
Entities (in the case of each of these clauses (i), (ii) and (iii), other than
changes or occurrences to the extent that such changes or occurrences have or
would reasonably be expected to have a materially disproportionate adverse
effect on the Company and its consolidated Subsidiaries taken as a whole
relative to comparable United States banking or financial services
organizations), or (iv) changes in the market price or trading volume of the
Common Stock or any other equity, equity-related or debt securities of the
Company or its consolidated Subsidiaries (it being understood and agreed that
the exception set forth in this clause (iv) does not apply to the underlying
reason giving rise to or contributing to any such change).
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

2

--------------------------------------------------------------------------------

“Governmental Entity” means any court, administrative agency or commission or
other governmental or regulatory authority or instrumentality or self-regulatory
organization.
“Investment Agreement” has the meaning set forth in the recitals in this
Agreement.
“Law” means any law, statute, code, ordinance, rule, regulation, judgment,
order, award, writ, decree or injunction issued, promulgated or entered into by
or with any Governmental Entity.
“Liens” means any liens, licenses, pledges, charges, encumbrances, adverse
rights or claims and security interests whatsoever.
“Prohibited Investor” has the meaning set forth in Section 3.01(E)(7).
“Purchase Price” has the meaning set forth in Section 2.01.
“Purchased Shares” has the meaning set forth in Section 2.01.
“Purchaser” has the meaning set forth in the introductory paragraph to this
Agreement.
“Regulatory Event” means, with respect to the Company, that (i) the Federal
Deposit Insurance Corporation or any other applicable Governmental Entity shall
have been appointed as conservator or receiver for the Company or any
Subsidiary; (ii) the Company or any Subsidiary shall have been considered in
“troubled condition” for the purposes of 12 U.S.C. Sec. 1831i or any regulation
promulgated thereunder; (iii) the Company or any Subsidiary shall qualify as
“Undercapitalized,” “Significantly Undercapitalized,” or “Critically
Undercapitalized” as those terms are defined in 12 U.S.C. Sec. 1831o or other
applicable Law; or (iv) the Company or any Subsidiary shall have become subject
to any formal or informal regulatory action requiring the Company or any
Subsidiary to materially improve its capital, liquidity or safety and soundness.
“Rule 144” means Rule 144 under the Securities Act.
“Securities Act” means the U.S. Securities Act of 1933, as amended.
“Securities Purchase” has the meaning set forth in the recitals in this
Agreement.
“Seller” has the meaning set forth in the introductory paragraph to this
Agreement.
“Shares” has the meaning set forth in the recitals to this Agreement.
“Subsidiary” means, with respect to any person, any bank, corporation,
partnership, joint venture, limited liability company or other organization,
whether incorporated or unincorporated, (i) of which such person or a subsidiary
of such person is a general partner or managing member or (ii) at least a
majority of the securities or other interests of which having by their terms
ordinary voting power to elect a majority of the board of directors or persons
performing similar functions with respect to such entity is directly or
indirectly owned by such person and/or one or more subsidiaries thereof.

3

--------------------------------------------------------------------------------

“Transaction Documents” has the meaning given such term in the Exchange
Agreement.
1.02.    Interpretation. The words “hereof,” “herein” and “hereunder” and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section
references are to this Agreement unless otherwise specified. Whenever the words
“include,” “includes” or “including” are used in this Agreement, they shall be
deemed to be followed by the words “without limitation.” The term “person” as
used in this Agreement shall mean any individual, corporation, limited liability
company, limited or general partnership, joint venture, government or any agency
or political subdivision thereof, or any other entity or any group (as defined
in Section 13(d)(3) of the Exchange Act) comprised of two or more of the
foregoing. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. In this Agreement, all references to “dollars”
or “$” are to United States dollars. This Agreement and any documents or
instruments delivered pursuant hereto or in connection herewith shall be
construed without regard to the identity of the person who drafted the various
provisions of the same. Each and every provision of this Agreement and such
other documents and instruments shall be construed as though all of the parties
participated equally in the drafting of the same. Consequently, the parties
acknowledge and agree that any rule of construction that a document is to be
construed against the drafting party shall not be applicable either to this
Agreement or such other documents and instruments.
1.03.    Changes Affecting the Shares. In the event the Company at any time or
from time to time prior to the Closing effects a stock dividend, stock split,
reverse stock split, combination, reclassification or similar transaction,
concurrently with the effectiveness of such stock dividend, stock split, reverse
stock split, combination, reclassification or other similar transaction, each
per share amount and per share price set forth in the Transaction Documents
(including with respect to the number of Shares being purchased hereunder or
under any other Transaction Document and including the $1.50 per share purchase
or exchange price set forth in any of the Transaction Documents) shall be
proportionally adjusted; provided that nothing in this Section 1.03 shall be
construed to permit the Company to take any action otherwise prohibited or
restricted by any of the Transaction Documents.
II    THE SECURITIES PURCHASE.
2.01.    Purchase and Sale of the Shares. Subject to, and on the terms and
conditions of, this Agreement, effective at the Closing, the Purchaser will
purchase from the Seller, and the Seller will sell, transfer, convey, assign and
deliver to the Purchaser, [ν] Shares at a purchase price of $1.50 per Share (the
“Purchased Shares”), free and clear of all Liens. The aggregate purchase price
for the Purchased Shares shall be an amount in cash equal to $[ν] (the “Purchase
Price”).
2.02.    Closing of the Securities Purchase.
(A)    Subject to Article V, the closing of the Securities Purchase (the
“Closing”) shall be held (1) immediately following the closing of the Exchange
or (2) at such other time or date that is agreed to in writing by the Seller and
the Purchaser (the date on which

4

--------------------------------------------------------------------------------

the Closing occurs, the “Closing Date”). The Closing shall be held at the same
location as the closing of the Exchange or at such other place as the Seller and
the Purchaser shall mutually agree in writing.
(B)    At the Closing, or simultaneously therewith, the following shall occur:
(1)    the Seller will cause to be delivered to the Purchaser certificates for
the Purchased Shares, duly endorsed in blank or accompanied by stock powers duly
endorsed in blank or other required instruments of transfer; and
(2)    the Purchaser will cause to be paid the aggregate Purchase Price to the
Seller, by wire transfer in immediately available funds, to an escrow account
designated in writing by the Seller to the Purchaser, such designation to be
made not later than two Business Days prior to the Closing Date.
III    REPRESENTATIONS AND WARRANTIES.
3.01.    Representations and Warranties of the Purchaser. The Purchaser hereby
represents and warrants to the Seller as follows:
(A)    Existence and Power. The Purchaser is duly organized and validly existing
as a limited liability company under the laws of [ν] and has all requisite power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated by this Agreement.
(B)    Authorization. The execution and delivery of this Agreement, and the
consummation by the Purchaser of the transactions contemplated hereby, have been
duly and validly approved by all necessary corporate or other applicable action
of the Purchaser, and no other corporate, shareholder or other proceedings on
the part of the Purchaser are necessary to approve this Agreement or to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by the Purchaser, and (assuming the due
authorization, execution and delivery of this Agreement by the Seller) this
Agreement constitutes a valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms, except as
enforcement may be limited by general principles of equity whether applied in a
court of law or a court of equity and by bankruptcy, insolvency and similar laws
affecting creditors’ rights and remedies generally.
(C)    Non-Contravention. Neither the execution and delivery of this Agreement
nor the consummation by the Purchaser of the transactions contemplated hereby
will violate any provision of the charter or bylaws or similar governing
documents of the Purchaser or, assuming that the consents, approvals, filings
and registrations referred to in Section 3.01(D) are received or made (as
applicable), applicable Law.
(D)    Consents and Approvals. No consents or approvals of, or filings or
registrations with, any Governmental Entity or of or with any other third party
by and on

5

--------------------------------------------------------------------------------

behalf of the Purchaser are necessary in connection with the execution and
delivery by the Purchaser of this Agreement and the consummation by the
Purchaser of the transactions contemplated hereby, except for such filings,
consents and approvals that have been made or obtained or will be made or
obtained prior to Closing.
(E)    Securities Matters.
(1)    The Purchaser is an “accredited investor” as defined in Rule 501 under
the Securities Act. The Purchased Shares are being acquired by the Purchaser for
its own account and without a view to the public distribution or sale of such
Shares.
(2)    The Purchaser understands that (i) the Purchased Shares are being sold in
a transaction not involving any public offering within the meaning of the
Securities Act, and accordingly, such Shares are “restricted securities” within
the meaning of Rule 144; (ii) such Shares have not been and will not be
registered under the Securities Act; (iii) if, prior to the expiration of the
holding period specified in Rule 144, it decides to offer, resell, pledge or
otherwise transfer such Shares, such Shares may be offered, resold, pledged or
transferred only (a) in compliance with Rule 144 or otherwise pursuant to an
exemption from registration under the Securities Act or (b) to the Company or
one of its Subsidiaries, in each case in accordance with any applicable
securities laws of any state of the United States; and (iv) the Purchaser will,
and each subsequent holder is required to, provide the Company and its transfer
agent with such certificates and other information as they may reasonably
require to confirm that the transfer complies with the foregoing restrictions.
(3)    The Purchaser understands that none of the Seller or the Company is
making any representation as to the availability of Rule 144 or Rule 144A under
the Securities Act for the offer, resale, pledge or transfer of any Shares, or
that any Shares purchased by the Purchaser will ever be able to be sold.
(4)    The Purchaser understands that the Purchased Shares will, until the
expiration of the applicable holding period set forth in Rule 144, unless sold
in compliance with Rule 144, bear a legend to substantially the following
effect:
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD, OFFERED, PLEDGED
OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO
IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.
(5)    The Purchaser acknowledges and agrees that it (i) is a sophisticated
investor; (ii) does not require the assistance of an investment advisor or other
purchaser representative to purchase the Purchased Shares; (iii) has such
knowledge

6

--------------------------------------------------------------------------------

and experience in financial and business matters as to be capable of evaluating
the merits and risks of its prospective investment in the Purchased Shares; (iv)
has the ability to bear the economic risks of its prospective investment for an
indefinite period of time; (v) can afford the complete loss of such investment;
and (vi) recognizes that the investment in the Purchased Shares involves
substantial risk.
(6)    The Purchaser understands that the Seller may have access to information
about the Company that is not generally available to the public, and
acknowledges and agrees that, to the extent the Seller has any such information,
such information need not (and shall not) be provided to the Purchaser by the
Seller. The Purchaser further understands that the Seller is a federal agency
and that the Purchaser’s ability to bring a claim against the Seller under the
federal securities laws may be limited.
(7)    The Purchaser acknowledges that it is not relying on any advice or
recommendation from the Seller or the Company, or any investigation or
examination that the Seller may have conducted, with respect to the Shares or
the Company, and the Seller has not made any representation, warranty or
covenant, express or implied, to it with respect thereto and the Seller shall
not have any liability to it with respect thereto.
(8)    Neither the Purchaser nor any person or entity controlling, controlled by
or under common control with it, nor any person or entity having a beneficial
interest in it, nor, to the knowledge of the Purchaser, any director, officer,
agent, employee or Affiliate thereof: (i) is a person or entity listed in the
annex to Executive Order No. 13224 (2001) issued by the President of the United
States (Executive Order Blocking Property and Prohibiting Transactions with
Persons Who Commit, Threaten to Commit, or Support Terrorism); (ii) is named on
the List of Specially Designated Nationals and Blocked Persons maintained by the
U.S. Office of Foreign Assets Control (OFAC); (iii) is a Designated National
other than an “unblocked national” as defined in the Cuban Assets Control
Regulations, 31 C.F.R. Part 515; (iv) is a non-U.S. shell bank (as set forth in
Section 313 of the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT
Act)) or is providing banking services indirectly to a non-U.S. shell bank; (v)
is a senior non-U.S. political figure or an immediate family member or close
associate of such figure or an entity owned or controlled by such a figure; (vi)
is a person with whom a U.S. citizen or entity is prohibited from transacting
business, whether such prohibition arises under U.S. law, regulation, executive
order, anti-money laundering, antiterrorist, financial institution and asset
control laws, regulations, rules or orders, or as a result of any list published
by the U.S. Department of Commerce, the U.S. Department of Treasury, or the U.S.
Department of State, including any agency or office thereof; (vii) is a person
who has funded or supported terrorism or a suspected terrorist organization or
who has engaged in, or derived funds from, activities that relate to the
laundering of the proceeds of illegal activity; or (viii) is a person or entity
that

7

--------------------------------------------------------------------------------

would cause the Company to violate any Law (including bank or other financial
institution regulatory laws, regulations or orders) to which the Company is
subject by reason of such person’s or entity’s purchase of the Purchased Shares
(categories (i) through (viii), each, a “Prohibited Investor”).
(9)    The Purchaser has met and will continue to meet all of its obligations
under the Bank Secrecy Act, as amended (31 U.S.C. Section 5311 et seq.) and its
implementing regulations, if applicable.
(10)    The funds used to purchase the Purchased Shares were legally derived
from legitimate sources and not from any Prohibited Investor.
(F)    Availability of Funds. Purchaser has, and will have as of the Closing,
sufficient funds available to consummate the transactions contemplated
hereunder.
IV    COVENANTS.
4.01.    Forbearances of the Seller. From the date hereof until the Closing,
without the prior written consent of the Purchaser, the Seller will not:
(A)    directly or indirectly transfer, sell, assign, distribute, exchange,
pledge, hypothecate, mortgage, encumber or otherwise dispose of, or engage in or
enter into any hedging transactions with respect to, any of the Purchased Shares
or any portion thereof or interest therein (other than pursuant to the
Securities Purchase); or
(B)    agree, commit to or enter into any agreement to take any of the actions
referred to in Section 4.01(A).
Notwithstanding the foregoing, the Seller may undertake any of the actions set
forth in Section 4.01(A) with an Affiliate of the Seller so long as this
Agreement is assigned to such Affiliate in accordance with Section 7.07 of this
Agreement. For the avoidance of doubt, until the Closing, except as expressly
set forth in this Section 4.01, the Seller shall continue to be able to exercise
all rights and privileges with respect to the Purchased Shares.
4.02.    Further Action. Each of the Seller, the Purchaser and the Company (A)
shall each execute and deliver, or shall cause to be executed and delivered,
such documents and other instruments and shall take, or shall cause to be taken,
such further action as may be reasonably necessary to carry out the provisions
of this Agreement and give effect to the transactions contemplated by this
Agreement, and (B) shall refrain from taking any actions that could reasonably
be expected to impair, delay or impede the Closing or the consummation of the
transactions contemplated by this Agreement (except as expressly permitted by
the Anchor Investment Agreements).
4.03.    Investment Agreement. The Purchaser will not agree to any amendment,
waiver or modification of the Investment Agreement (other than corrections of
obvious errors, if any, or other

8

--------------------------------------------------------------------------------

ministerial amendments) without the prior written consent of the Seller, in each
case to the extent such amendment, waiver or modification is adverse to the
Seller’s interests under this Agreement.
V    CONDITIONS TO THE CLOSING.
5.01.    Conditions to Each Party’s Obligations. The respective obligations of
each of the Purchaser and the Seller to consummate the Securities Purchase are
subject to the fulfillment, or written waiver by the Purchaser and the Seller,
prior to the Closing, of each of the following conditions:
(A)    Closing of the Exchange. The closing of the Exchange shall have occurred
prior to the Closing.
(B)    Regulatory Approvals. All regulatory approvals required to consummate the
Securities Purchase shall have been obtained and shall remain in full force and
effect and all statutory waiting periods in respect thereof shall have expired
or been terminated.
(C)    No Injunctions or Restraints; Illegality. No order, injunction or decree
issued by any court or agency of competent jurisdiction or other legal restraint
or prohibition preventing the consummation of the Securities Purchase shall be
in effect. No Law shall have been enacted, entered, promulgated or enforced by
any Governmental Entity which prohibits or makes illegal the consummation of the
Securities Purchase.
(D)    Satisfaction of Anchor Investment Agreements. Each of the Anchor
Investment Agreements shall be in full force and effect and the conditions to
closing contained in each of the Anchor Investment Agreements (other than the
conditions relating to the Closing hereunder and the occurrence of one day of
separation between the closing of the Exchange Agreement and the closing under
the Anchor Investment Agreements) shall have been satisfied or waived and the
consideration required under the Anchor Investment Agreements shall have been
deposited in the amounts set forth in the Anchor Investment Agreements with an
escrow agent acceptable to the Seller pursuant to an escrow agreement acceptable
to the Seller, and all conditions to the release of such amounts from escrow
shall have been satisfied or waived (other than the conditions relating to the
Closing hereunder and the occurrence of one day of separation between the
closing of the Exchange Agreement and the closing under the Anchor Investment
Agreements).
5.02.    Condition to Obligations of the Seller. The obligation of the Seller to
consummate the Securities Purchase is also subject to the fulfillment, or
written waiver by the Seller, prior to the Closing, of the following conditions:
(A)    Other Events. None of the following shall have occurred with respect to
the Company or any of its Subsidiaries:
(1)    the Company or any of its Subsidiaries shall have (a) dissolved (other
than pursuant to a consolidation, amalgamation or merger); (b) become insolvent
or

9

--------------------------------------------------------------------------------

unable to pay its debts or failed or admitted in writing its inability generally
to pay its debts as they become due; (c) made a general assignment, arrangement
or composition with or for the benefit of its creditors; (d) instituted or have
instituted against it a proceeding seeking a judgment of insolvency or
bankruptcy or any other relief under any bankruptcy or insolvency law or other
similar law affecting creditors’ rights, or a petition shall have been presented
for its winding-up or liquidation, and, in the case of any such proceeding or
petition instituted or presented against it, such proceeding or petition shall
have resulted in a judgment of insolvency or bankruptcy or the entry of an order
for relief or the making of an order for its winding-up or liquidation; (e) had
a resolution passed for its winding-up, official management or liquidation
(other than pursuant to a consolidation, amalgamation or merger); (f) sought or
shall have become subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other similar official
for it or for all or substantially all its assets; (g) had a secured party take
possession of all or substantially all its assets or had a distress, execution,
attachment, sequestration or other legal process levied, enforced or sued on or
against all or substantially all its assets; (h) caused or shall have been
subject to any event with respect to it which, under the applicable laws of any
jurisdiction, had an analogous effect to any of the events specified in clauses
(a) to (g) (inclusive); or (i) taken any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the foregoing acts;
(2)    a Governmental Entity in any jurisdiction shall have (a) commenced an
action or proceeding against the Company or any of its Subsidiaries; or (b)
issued or entered a temporary restraining order, preliminary or permanent
injunction or other order applicable to the Company or any of its Subsidiaries,
which in the case of (a) and (b) shall have had or shall be reasonably expected
to have a Company Material Adverse Effect;
(3)    any fact, circumstance, event, change, occurrence, condition or
development shall have occurred that, individually or in the aggregate, shall
have had or shall be reasonably likely to have a Company Material Adverse
Effect; or
(4)    any Regulatory Event not otherwise existing on the date hereof.
(B)    Representations and Warranties of Purchaser. The representations and
warranties set forth in Article III of this Agreement shall be true and correct
in all material respects as though made on and as of the Closing Date.
(C)    Performance Obligations. The Purchaser shall have performed in all
respects all obligations required to be performed by it under this Agreement at
or prior to the Closing.
(D)    Closing Certificate. The Purchaser shall deliver to the Seller a
certificate, dated as of the Closing Date, signed on behalf of the Purchaser by
a senior executive officer thereof certifying to the effect that all conditions
precedent to the Closing (other than with respect to Section 5.01(A), Section
5.01(D) and Section 5.02(A)) have been satisfied. The

10

--------------------------------------------------------------------------------

Company shall deliver to the Seller a certificate, dated as of the Closing Date,
signed on behalf of the Company by a senior executive officer thereof certifying
to the effect that the conditions set forth in Section 5.01(A), Section 5.01(D)
and Section 5.02(A) shall have been satisfied.
VI    TERMINATION.
6.01.    Termination Events.
(A)    This Agreement may be terminated at any time prior to the Closing:
(1)    by mutual written agreement of the Purchaser and the Seller; or
(2)    by the Seller, upon written notice to the Purchaser, in the event that
the Closing Date does not occur on or before [l], 2013 or such later date, if
any, as Seller shall agree to in writing; provided, however, that the right to
terminate this Agreement pursuant to this Section 6.01(A)(2) shall not be
available if Seller’s failure to fulfill any obligation under this Agreement
shall have been the cause of, or shall have resulted in, the failure of the
Closing Date to occur on or prior to such date.
(B)    This Agreement shall automatically terminate upon the termination of the
Exchange Agreement in accordance with its terms.
6.02.    Effect of Termination. In the event of termination of this Agreement as
provided in Section 6.01, this Agreement shall forthwith become void and have no
effect, and none of the Seller, the Purchaser, any affiliates of the Purchaser
or any officers or directors of the Purchaser or any of its affiliates shall
have any liability of any nature whatsoever hereunder, or in connection with the
transactions contemplated hereby, except that this Section 6.02 and Sections
7.03, 7.04, 7.05 and 7.06 shall survive any termination of this Agreement.
VII    MISCELLANEOUS.
7.01.    Waiver; Amendment. Any provision of this Agreement may be waived,
amended or modified at any time by an agreement in writing signed by each of the
Seller, the Purchaser and the Company. Neither any failure nor any delay by any
party in exercising any right, power or privilege under this Agreement or any of
the documents referred to in this Agreement will operate as a waiver of such
right, power or privilege, and no single or partial exercise of any such right,
power or privilege will preclude any other or further exercise of such right,
power or privilege.
7.02.    Counterparts. This Agreement may be executed by facsimile or other
electronic means and in counterparts, all of which shall be considered an
original and one and the same agreement and shall become effective when
counterparts have been signed by each of the parties

11

--------------------------------------------------------------------------------

and delivered to the other parties, it being understood that all parties need
not sign the same counterpart.
7.03.    Governing Law; Choice of Forum; Waiver of Jury Trial.
(A)    This Agreement and any claim, controversy or dispute arising under or
related to this Agreement, the relationship of the parties, and/or the
interpretation and enforcement of the rights and duties of the parties shall be
enforced, governed, and construed in all respects (whether in contract or in
tort) in accordance with the federal law of the United States if and to the
extent such law is applicable, and otherwise in accordance with the laws of the
State of New York applicable to contracts made and to be performed entirely
within such State. Each of the parties hereto agrees (a) to submit to the
exclusive jurisdictions and venue of the United States District Court of the
District of Columbia and the United States Court of Federal Claims for any and
all civil actions, suits or proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby, and (b) that notice may be
served upon (i) the Purchaser at the address and in the manner set forth for
notices to the Purchaser in Section 7.05 and (ii) the Seller at the address and
in the manner set forth for notices to the Seller in Section 7.05, but otherwise
in accordance with federal law.
(B)    To the extent permitted by applicable Law, each of the parties hereto
hereby unconditionally waives trial by jury in any civil legal action or
proceeding relating to this Agreement or the transactions contemplated hereby.
7.04.    Expenses. If requested by the Seller, the Company shall pay all
reasonable out of pocket and documented costs and expenses associated with this
Agreement and the transactions contemplated by this Agreement, including, but
not limited to, the reasonable fees, disbursements and other charges of the
Sellers’s legal counsel and financial advisors.
7.05.    Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given on the date of delivery if delivered
personally or telecopied (upon telephonic confirmation of receipt), on the first
Business Day following the date of dispatch if delivered by a recognized next
day courier service, or on the third Business Day following the date of mailing
if delivered by registered or certified mail, return receipt requested, postage
prepaid. All notices hereunder shall be delivered as set forth below or pursuant
to such other instructions as may be designated in writing by the party to
receive such notice:
If to the Purchaser to:
[l]
[l]
[l]
Attention: [l]
Telephone: [l]
Fax: [l]

With a copy to:

12

--------------------------------------------------------------------------------

[l]
[l]
[l]
Attention: [l]
Telephone: [l]
Fax: [l]

If to the Seller to:

United States Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220
Facsimile: (202) 927-9225
Attention: Chief Counsel Office of Financial Stability

With a copy to:

Cadwalader, Wickersham & Taft LLP
One World Financial Center
New York, NY 10281
Attention: William P. Mills
Telephone: (212) 504 6000
Facsimile: (212) 504 6666

7.06.    Entire Understanding; No Third Party Beneficiaries. This Agreement
(together with the documents, agreements and instruments referred to herein)
represents the entire understanding of the parties with respect to the subject
matter hereof and supersedes any and all other oral or written agreements
heretofore made with respect to the subject matter hereof. Nothing in this
Agreement, expressed or implied, is intended to confer upon any person, other
than the parties hereto, any rights or remedies hereunder.
7.07.    Assignment. Neither this Agreement nor any right, remedy, obligation or
liability arising hereunder or by reason hereof shall be assignable by any party
hereto without the prior written consent of the other party, and any attempt to
assign any right, remedy, obligation or liability hereunder without such consent
shall be null and void; provided, however, that the Seller may assign this
Agreement to an Affiliate of the Seller. If the Seller assigns this Agreement to
an Affiliate, the Seller shall be relieved of its obligations and liabilities
under this Agreement but (i) all rights, remedies, obligations and liabilities
of the Seller hereunder shall continue and be enforceable by and against and
assumed by such Affiliate, (ii) the Purchaser’s obligations and liabilities
hereunder shall continue to be outstanding and (iii) all references to the
Seller herein shall be deemed to be references to such Affiliate. The Seller
will give the Purchaser notice of any such assignment; provided, that the
failure to provide such notice shall not void any such assignment.
7.08.    Severability. Any term or provision of this Agreement which is
determined by a court of competent jurisdiction to be invalid, illegal or
unenforceable in any jurisdiction shall, as

13

--------------------------------------------------------------------------------

to that jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid, illegal or unenforceable the
remaining terms and provisions of this Agreement. or affecting the validity,
legality or enforceability of any of the terms or provisions of this Agreement
in any other jurisdiction, and if any provision of this Agreement is determined
to be so broad as to be unenforceable, the provision shall be interpreted to be
only so broad as is enforceable, in all cases so long as neither the economic
nor legal substance of the transactions contemplated hereby is affected in any
manner materially adverse to any party or its shareholders. Upon any such
determination, the parties shall negotiate in good faith in an effort to agree
upon a suitable and equitable substitute provision to effect the original intent
of the parties.
[Remainder of page intentionally left blank]

14

--------------------------------------------------------------------------------

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

[l]

By:    
Name:
Title:

UNITED STATES DEPARTMENT OF THE
TREASURY

By:    
Name: Timothy G. Massad
Title: Assistant Secretary for Financial Stability

[Signature Page to Securities Purchase Agreement]

--------------------------------------------------------------------------------

For the purposes of Section 4.02, Section 5.02(D), Section 7.01 and Section 7.04
of this Agreement:
FIRST SECURITY GROUP, INC.
By:                                
    Name:
    Title:

[Signature Page to Securities Purchase Agreement]