EX-10.1





Exhibit
10.1




UNITED STATES DEPARTMENT OF THE TREASURY

1500 PENNSYLVANIA AVENUE, NW

WASHINGTON, D.C. 20220




Dear Ladies and Gentlemen:




     The company set forth on the signature page hereto (the “Company”) intends to issue in a
private placement the number of shares of a series of its preferred stock set forth on Schedule A
hereto (the “Preferred Shares”) and a warrant to purchase the number of shares of a series of its
preferred stock set forth on Schedule A hereto (the “Warrant” and, together with the Preferred
Shares, the “Purchased Securities”) and the United States Department of the Treasury (the
“Investor”) intends to purchase from the Company the Purchased Securities.



     The purpose of this letter agreement is to confirm the terms and conditions of the purchase by
the Investor of the Purchased Securities. Except to the extent supplemented or superseded by the
terms set forth herein or in the Schedules hereto, the provisions contained in the Securities
Purchase Agreement — Standard Terms attached hereto as Exhibit A (the “Securities Purchase
Agreement”) are incorporated by reference herein. Terms that are defined in the Securities Purchase
Agreement are used in this letter agreement as so defined. In the event of any inconsistency
between this letter agreement and the Securities Purchase Agreement, the terms of this letter
agreement shall govern.



     Each of the Company and the Investor hereby confirms its agreement with the other party with
respect to the issuance by the Company of the Purchased Securities and the purchase by the Investor
of the Purchased Securities pursuant to this letter agreement and the Securities Purchase Agreement
on the terms specified on Schedule A hereto.



     This letter agreement (including the Schedules hereto), the Securities Purchase Agreement
(including the Annexes thereto), the Disclosure Schedules and the Warrant constitute the entire
agreement, and supersede all other prior agreements, understandings, representations and
warranties, both written and oral, between the parties, with respect to the subject matter hereof.
This letter agreement constitutes the “Letter Agreement” referred to in the Securities Purchase
Agreement.



     This letter agreement may be executed in any number of separate counterparts, each such
counterpart being deemed to be an original instrument, and all such counterparts will together
constitute the same agreement. Executed signature pages to this letter agreement may be delivered
by facsimile and such facsimiles will be deemed as sufficient as if actual signature pages had been
delivered.



* * *





 









 








     In witness whereof, this letter agreement has been duly executed and delivered by the duly
authorized representatives of the parties hereto as of the date written below.



	 	 	 	 	 
	 	UNITED STATES DEPARTMENT OF THE TREASURY

 	 
	 	By:  	
/s/ Neel Kashkari 	 
	 	 	Name:  	Neel Kashkari 	 
	 	 	Title:  	Interim Assistant Secretary For Financial
Stability	 
	 
	 	COMPANY: COMMUNITY FIRST, INC.

 	 
	 	By:  	/s/ Marc R. Lively
 	 
	 	 	Name:  	Marc R. Lively 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 



Date:
February 27, 2009




 









 








EXHIBIT A




 









 








EXHIBIT A




 


SECURITIES PURCHASE AGREEMENT




STANDARD TERMS




 





 









 





TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 
	ARTICLE I PURCHASE; CLOSING	 	 	1	 
	 	1.1	 	 	Purchase
	 	 	1	 
	 	1.2	 	 	Closing
	 	 	2	 
	 	1.3	 	 	Interpretation
	 	 	4	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE II REPRESENTATIONS AND WARRANTIES	 	 	4	 
	 	2.1	 	 	Disclosure
	 	 	4	 
	 	2.2	 	 	Representations and Warranties of the Company
	 	 	5	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE III COVENANTS	 	 	13	 
	 	3.1	 	 	Commercially Reasonable Efforts
	 	 	13	 
	 	3.2	 	 	Expenses
	 	 	13	 
	 	3.3	 	 	Sufficiency of Authorized Warrant Preferred Stock; Exchange Listing
	 	 	13	 
	 	3.4	 	 	Certain Notifications Until Closing
	 	 	14	 
	 	3.5	 	 	Access, Information and Confidentiality
	 	 	14	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE IV ADDITIONAL AGREEMENTS	 	 	15	 
	 	4.1	 	 	Purchase for Investment
	 	 	15	 
	 	4.2	 	 	Legends
	 	 	16	 
	 	4.3	 	 	Certain Transactions
	 	 	17	 
	 	4.4	 	 	Transfer of Purchased Securities and Warrant Shares; Restrictions on
Exercise of the Warrant
	 	 	18	 
	 	4.5	 	 	Registration Rights
	 	 	18	 
	 	4.6	 	 	Depositary Shares
	 	 	29	 
	 	4.7	 	 	Restriction on Dividends and Repurchases
	 	 	30	 
	 	4.8	 	 	Executive Compensation
	 	 	32	 
	 	4.9	 	 	Related Party Transactions
	 	 	32	 
	 	4.10	 	 	Bank and Thrift Holding Company Status
	 	 	32	 
	 	4.11	 	 	Predominantly Financial
	 	 	32	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE V MISCELLANEOUS	 	 	33	 
	 	5.1	 	 	Termination
	 	 	33	 
	 	5.2	 	 	Survival of Representations and Warranties
	 	 	33	 
	 	5.3	 	 	Amendment
	 	 	33	 
	 	5.4	 	 	Waiver of Conditions
	 	 	34	 
	 	5.5	 	 	Governing Law: Submission to Jurisdiction, Etc
	 	 	34	 
	 	5.6	 	 	Notices
	 	 	34	 
	 	5.7	 	 	Definitions
	 	 	34	 
	 	5.8	 	 	Assignment
	 	 	35	 
	 	5.9	 	 	Severability
	 	 	35	 
	 	5.10	 	 	No Third Party Beneficiaries
	 	 	35	 






i









 






LIST OF ANNEXES




	 	 	 	 	 
	ANNEX A:	 	FORM OF CERTIFICATE OF DESIGNATIONS FOR PREFERRED STOCK

	 	 	 	 	 

	ANNEX B:	 	FORM OF CERTIFICATE OF DESIGNATIONS FOR WARRANT PREFERRED STOCK

	 	 	 	 	 

	ANNEX C:	 	FORM OF WAIVER

	 	 	 	 	 

	ANNEX D:	 	FORM OF OPINION

	 	 	 	 	 

	ANNEX E:	 	FORM OF WARRANT







ii









 






INDEX OF DEFINED TERMS




	 	 	 	 	 
	 	 	Location of	 
	Term	 	Definition	 
	Affiliate
	 	 	5.7	(b)
	Agreement
	 	Recitals	 
	Appropriate Federal Banking Agency
	 	 	2.2	(s)
	Bank Holding Company
	 	 	4.10	 
	Bankruptcy Exceptions
	 	 	2.2	(d)
	Benefit Plans
	 	1.2(d)(iv)
	Board of Directors
	 	 	2.2	(f)
	Business Combination
	 	 	5.8	 
	business day
	 	 	1.3	 
	Capitalization Date
	 	 	2.2	(b)
	Certificates of Designations
	 	1.2(d)(iii)
	Charter
	 	I.2(d)(iii)
	Closing
	 	 	1.2	(a)
	Closing Date
	 	 	1.2	(a)
	Code
	 	 	2.2	(n)
	Common Stock
	 	 	2.2	(b)
	Company
	 	Recitals	 
	Company Financial Statements
	 	 	2.2	(h)
	Company Material Adverse Effect
	 	 	2.1	(b)
	Company Reports
	 	 	2.2	(i)(i)
	Company Subsidiary; Company Subsidiaries
	 	2.2(e)(ii)
	control; controlled by; under common control with
	 	 	5.7	(b)
	Controlled Group
	 	 	2.2	(n)
	CPP
	 	Recitals	 
	Disclosure Schedule
	 	 	2.1	(a)
	EESA
	 	I.2(d)(iv)
	ERISA
	 	 	2.2	(n)
	Exchange Act
	 	 	4.4	 
	Federal Reserve
	 	 	4.10	 
	GAAP
	 	 	2.1	(b)
	Governmental Entities
	 	 	1.2	(c)
	Holder
	 	 	4.5	(1)(i)
	Holders’ Counsel
	 	4.5(l)(ii)
	Indemnitee
	 	 	4.5	(h)(i)
	Information
	 	 	3.5	(c)
	Investor
	 	Recitals	 
	Junior Stock
	 	 	4.7	(f)
	knowledge of the Company; Company’s knowledge
	 	 	5.7	(c)
	Letter Agreement
	 	Recitals	 
	officers
	 	 	5.7	(c)
	Parity Stock
	 	 	4.7	(f)
	Pending Underwritten Offering
	 	 	4.5	(m)






iii









 






	 	 	 	 	 
	 	 	Location of	 
	Term	 	Definition	 
	Permitted Repurchases
	 	 	4.7	(c)
	Piggyback Registration
	 	4.5(b)(iv)
	Plan
	 	 	2.2	(n)
	Preferred Shares
	 	Recitals	 
	Preferred Stock
	 	Recitals	 
	Previously Disclosed
	 	 	2.1	(c)
	Proprietary Rights
	 	 	2.2	(u)
	Purchase
	 	Recitals	 
	Purchase Price
	 	 	1.1	 
	Purchased Securities
	 	Recitals	 
	register; registered; registration
	 	4.5(1)(iii)
	Registrable Securities
	 	4.5(1)(iv)
	Registration Expenses
	 	 	4.5	(1)(v)
	Regulatory Agreement
	 	 	2.2	(s)
	Rule 144; Rule 144A; Rule 159A; Rule 405; Rule 415
	 	4.5(I)(vi)
	Savings and Loan Holding Company
	 	 	4.10	 
	Schedules
	 	Recitals	 
	SEC
	 	 	2.2	(k)
	Securities Act
	 	 	2.2	(a)
	Selling Expenses
	 	4.5(l)(vii)
	Senior Executive Officers
	 	 	4.8	 
	Shelf Registration Statement
	 	4.5(b)(ii)
	Signing Date
	 	 	2.1	(b)
	Special Registration
	 	 	4.5	(1)
	subsidiary
	 	 	5.7	(a)
	Tax; Taxes
	 	 	2.2	(o)
	Transfer
	 	 	4.4	 
	Warrant
	 	Recitals	 
	Warrant Preferred Stock
	 	Recitals	 
	Warrant Shares
	 	 	2.2	(d)







iv











 





SECURITIES PURCHASE AGREEMENT — STANDARD TERMS




Recitals:




     WHEREAS, the United States Department of the Treasury (the “Investor”) may from time to time
agree to purchase shares of preferred stock and warrants from eligible financial institutions which
elect to participate in the Troubled Asset Relief Program Capital Purchase Program (“CPP”);



     WHEREAS, an eligible financial institution electing to participate in the CPP and issue
securities to the Investor (referred to herein as the “Company”) shall enter into a letter
agreement (the “Letter Agreement”) with the Investor which incorporates this Securities Purchase
Agreement — Standard Terms;



     WHEREAS, the Company agrees to expand the flow of credit to U.S. consumers and businesses on
competitive terms to promote the sustained growth and vitality of the U.S. economy;



     WHEREAS, the Company agrees to work diligently, under existing programs, to modify the terms
of residential mortgages as appropriate to strengthen the health of the U.S. housing market;



     WHEREAS, the Company intends to issue in a private placement the number of shares of the
series of its Preferred Stock (“Preferred Stock”) set forth on Schedule A to the Letter
Agreement (the “Preferred Shares”) and a warrant to purchase the number of shares of the series of
its Preferred Stock (“Warrant Preferred Stock’) set forth on Schedule A to the Letter
Agreement (the “Warrant” and, together with the Preferred Shares, the “Purchased Securities”) and
the Investor intends to purchase (the “Purchase”) from the Company the Purchased Securities; and



     WHEREAS, the Purchase will be governed by this Securities Purchase Agreement — Standard Terms
and the Letter Agreement, including the schedules thereto (the “Schedules”), specifying additional
terms of the Purchase. This Securities Purchase Agreement — Standard Terms (including the Annexes
hereto) and the Letter Agreement (including the Schedules thereto) are together referred to as this
“Agreement”. All references in this Securities Purchase Agreement — Standard Terms to “Schedules”
are to the Schedules attached to the Letter Agreement.



     NOW, THEREFORE, in consideration of the premises, and of the representations, warranties,
covenants and agreements set forth herein, the parties agree as follows:



Article I

Purchase; Closing




     1.1 Purchase. On the terms and subject to the conditions set forth in this Agreement, the Company agrees
to sell to the Investor, and the Investor agrees to



1









 







purchase from the Company, at the Closing (as
hereinafter defined), the Purchased Securities for the price set forth on Schedule A (the
“Purchase Price”).



     1.2 Closing.



          (a) On the terms and subject to the conditions set forth in this Agreement, the closing of the
Purchase (the “Closing”) will take place at the location specified in Schedule A, at the
time and on the date set forth in Schedule A or as soon as practicable thereafter, or at
such other place, time and date as shall be agreed between the Company and the Investor. The time
and date on which the Closing occurs is referred to in this Agreement as the “Closing Date”.




          (b) Subject to the fulfillment or waiver of the conditions to the Closing in this Section 1.2,
at the Closing the Company will deliver the Preferred Shares and the Warrant, in each case as
evidenced by one or more certificates dated the Closing Date and bearing appropriate legends as
hereinafter provided for, in exchange for payment in full of the Purchase Price by wire transfer of
immediately available United States funds to a bank account designated by the Company on
Schedule A.




          (c) The respective obligations of each of the Investor and the Company to consummate the
Purchase are subject to the fulfillment (or waiver by the Investor and the Company, as applicable)
prior to the Closing of the conditions that (i) any approvals or authorizations of all United
States and other governmental, regulatory or judicial authorities (collectively, “Governmental
Entities”) required for the consummation of the Purchase shall have been obtained or made in form
and substance reasonably satisfactory to each party and shall be in full force and effect and all
waiting periods required by United States and other applicable law, if any, shall have expired and
(ii) no provision of any applicable United States or other law and no judgment, injunction, order
or decree of any Governmental Entity shall prohibit the purchase and sale of the Purchased
Securities as contemplated by this Agreement.




          (d) The obligation of the Investor to consummate the Purchase is also subject to the
fulfillment (or waiver by the Investor) at or prior to the Closing of each of the following
conditions:




               (i) (A) the representations and warranties of the Company set forth in (x) Section 2.2(g) of
this Agreement shall be true and correct in all respects as though made on and as of the Closing
Date, (y) Sections 2.2(a) through (f) shall be true and correct in all material respects as though
made on and as of the Closing Date (other than representations and warranties that by their terms
speak as of another date, which representations and warranties shall be true and correct in all
material respects as of such other date) and (z) Sections 2.2(h) through (v) (disregarding all
qualifications or limitations set forth in such representations and warranties as to “materiality”,
“Company Material Adverse Effect” and words of similar import) shall be true and correct as though made
on and as of the Closing Date (other than representations and warranties that by their terms speak
as of another date, which representations and warranties shall be true and correct as of such other
date), except to the extent that the failure of such



2









 




representations and warranties referred to in
this Section 1.2(d)(i)(A)(z) to be so true and correct, individually or in the aggregate, does not
have and would not reasonably be expected to have a Company Material Adverse Effect and (B) the
Company shall have performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing;




               (ii) the Investor shall have received a certificate signed on behalf of the Company by a
senior executive officer certifying to the effect that the conditions set forth in Section
1.2(d)(i) have been satisfied;



               (iii) the Company shall have duly adopted and filed with the Secretary of State of its
jurisdiction of organization or other applicable Governmental Entity the amendments to its
certificate or articles of incorporation, articles of association, or similar organizational
document (“Charter”) in substantially the forms attached hereto as Annex A and Annex
B (the “Certificates of Designations”) and such filing shall have been accepted;



               (iv) (A) the Company shall have effected such changes to its compensation, bonus, incentive
and other benefit plans, arrangements and agreements (including golden parachute, severance and
employment agreements) (collectively, “Benefit Plans”) with respect to its Senior Executive
Officers (and to the extent necessary for such changes to be legally enforceable, each of its
Senior Executive Officers shall have duly consented in writing to such changes), as may be
necessary, during the period that the Investor owns any debt or equity securities of the Company
acquired pursuant to this Agreement or the Warrant, in order to comply with Section 111(b) of the
Emergency Economic Stabilization Act of 2008 (“EESA”) as implemented by guidance or regulation
thereunder that has been issued and is in effect as of the Closing Date, and (B) the Investor shall
have received a certificate signed on behalf of the Company by a senior executive officer
certifying to the effect that the condition set forth in Section 1.2(d)(iv)(A) has been satisfied;



               (v) each of the Company’s Senior Executive Officers shall have delivered to the Investor a
written waiver in the form attached hereto as Annex C releasing the Investor from any
claims that such Senior Executive Officers may otherwise have as a result of the issuance, on or
prior to the Closing Date, of any regulations which require the modification of, and the agreement
of the Company hereunder to modify, the terms of any Benefit Plans with respect to its Senior
Executive Officers to eliminate any provisions of such Benefit Plans that would not be in
compliance with the requirements of Section 111(b) of the EESA as implemented by guidance or
regulation thereunder that has been issued and is in effect as of the Closing Date;



               (vi) the Company shall have delivered to the Investor a written opinion from counsel to the
Company (which may be internal counsel), addressed to the
Investor and dated as of the Closing Date, in substantially the form attached hereto as
Annex D;



3









 





               (vii) the Company shall have delivered certificates in proper form or, with the prior consent
of the Investor, evidence of shares in book-entry form, evidencing the Preferred Shares to Investor
or its designee(s); and



               (viii) the Company shall have duly executed the Warrant in substantially the form attached
hereto as Annex E and delivered such executed Warrant to the Investor or its designee(s).



     1.3 Interpretation. When a reference is made in this Agreement to “Recitals,”
“Articles,” “Sections,” or “Annexes” such reference shall be to a Recital, Article or Section of,
or Annex to, this Securities Purchase Agreement — Standard Terms, and a reference to “Schedules”
shall be to a Schedule to the Letter Agreement, in each case, unless otherwise indicated. The terms
defined in the singular have a comparable meaning when used in the plural, and vice versa.
References to “herein”, “hereof’, “hereunder” and the like refer to this Agreement as a whole and
not to any particular section or provision, unless the context requires otherwise. The table of
contents and headings contained in this Agreement are for reference purposes only and are not part
of this Agreement. Whenever the words “include,” “includes” or “including” are used in this
Agreement, they shall be deemed followed by the words “without limitation.” No rule of construction
against the draftsperson shall be applied in connection with the interpretation or enforcement of
this Agreement, as this Agreement is the product of negotiation between sophisticated parties
advised by counsel. All references to “$” or “dollars” mean the lawful currency of the United
States of America. Except as expressly stated in this Agreement, all references to any statute,
rule or regulation are to the statute, rule or regulation as amended, modified, supplemented or
replaced from time to time (and, in the case of statutes, include any rules and regulations
promulgated under the statute) and to any section of any statute, rule or regulation include any
successor to the section. References to a “business day” shall mean any day except Saturday, Sunday
and any day on which banking institutions in the State of New York generally are authorized or
required by law or other governmental actions to close.



Article II

Representations and Warranties




     2.1 Disclosure.



          (a) On or prior to the Signing Date, the Company delivered to the Investor a schedule
(“Disclosure Schedule”) setting forth, among other things, items the disclosure of which is
necessary or appropriate either in response to an express disclosure requirement contained in a
provision hereof or as an exception to one or more representations or warranties contained in
Section 2.2.




          (b) “Company Material Adverse Effect” means a material adverse effect on (i) 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 (A) changes after the date of the Letter Agreement (the “Signing Date”) in general
business, economic or market



4









 






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, (B) changes or proposed changes after
the Signing Date in generally accepted accounting principles in the United States (“GAAP”) or
regulatory accounting requirements, or authoritative interpretations thereof, or (C) changes or
proposed changes after the Signing Date 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 (A), (B) and (C), 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 U.S. banking or financial services organizations); or (ii) the ability of the Company to
consummate the Purchase and other transactions contemplated by this Agreement and the Warrant and
perform its obligations hereunder or thereunder on a timely basis.




          (c) “Previously Disclose”‘ means information set forth on the Disclosure Schedule, provided,
however, that disclosure in any section of such Disclosure Schedule shall apply only to the
indicated section of this Agreement except to the extent that it is reasonably apparent from the
face of such disclosure that such disclosure is relevant to another section of this Agreement.




     2.2 Representations and Warranties of the Company. Except as Previously Disclosed, the
Company represents and warrants to the Investor that as of the Signing Date and as of the Closing
Date (or such other date specified herein):



          (a) Organization, Authority and Significant Subsidiaries. The Company has been duly
incorporated and is validly existing and in good standing under the laws of its jurisdiction of
organization, with the necessary power and authority to own its properties and conduct its business
in all material respects as currently conducted, and except as has not, individually or in the
aggregate, had and would not reasonably be expected to have a Company Material Adverse Effect, has
been duly qualified as a foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification; each subsidiary of the Company that
would be considered a “significant subsidiary” within the meaning of Rule 1-02(w) of Regulation S-X
under the Securities Act of 1933 (the “Securities Act”), has been duly organized and is validly
existing in good standing under the laws of its jurisdiction of organization. The Charter and
bylaws of the Company, copies of which have been provided to the Investor
prior to the Signing Date, are true, complete and correct copies of such documents as in full
force and effect as of the Signing Date.




          (b) Capitalization. The authorized capital stock of the Company, and the outstanding
capital stock of the Company (including securities convertible into, or exercisable or exchangeable
for, capital stock of the Company) as of the most recent fiscal month-end preceding the Signing
Date (the “Capitalization Date”) is set forth on



5









 






Schedule B. The outstanding shares
of capital stock of the Company have been duly authorized and are validly issued and outstanding,
fully paid and nonassessable, and subject to no preemptive rights (and were not issued in violation
of any preemptive rights). As of the Signing Date, the Company does not have outstanding any
securities or other obligations providing the holder the right to acquire its Common Stock (“Common
Stock”) that is not reserved for issuance as specified on Schedule B, and the Company has
not made any other commitment to authorize, issue or sell any Common Stock. Since the
Capitalization Date, the Company has not issued any shares of Common Stock, other than (i) shares
issued upon the exercise of stock options or delivered under other equity-based awards or other
convertible securities or warrants which were issued and outstanding on the Capitalization Date and
disclosed on Schedule B and (ii) shares disclosed on Schedule B. Each holder of 5%
or more of any class of capital stock of the Company and such holder’s primary address are set
forth on Schedule B.




          (c) Preferred Shares. The Preferred Shares have been duly and validly authorized, and,
when issued and delivered pursuant to this Agreement, such Preferred Shares will be duly and
validly issued and fully paid and non-assessable, will not be issued in violation of any preemptive
rights, and will rank pari passu with or senior to all other series or classes of Preferred Stock,
whether or not issued or outstanding, with respect to the payment of dividends and the distribution
of assets in the event of any dissolution, liquidation or winding up of the Company.




          (d) The Warrant and Warrant Shares. The Warrant has been duly authorized and, when
executed and delivered as contemplated hereby, will constitute a valid and legally binding
obligation of the Company enforceable against the Company in accordance with its terms, except as
the same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors’ rights generally and general equitable principles,
regardless of whether such enforceability is considered in a proceeding at law or in equity
(“Bankruptcy Exceptions”). The shares of Warrant Preferred Stock issuable upon exercise of the
Warrant (the “Warrant Shares”) have been duly authorized and reserved for issuance upon exercise of
the Warrant and when so issued in accordance with the terms of the Warrant will be validly issued,
fully paid and non-assessable, and will rank pari passu with or senior to all other series or
classes of Preferred Stock, whether or not issued or outstanding, with respect to the payment of
dividends and the distribution of assets in the event of any dissolution, liquidation or winding up
of the Company.




          (e) Authorization, Enforceability.




               (i) The Company has the corporate power and authority to execute and deliver this Agreement
and the Warrant and to carry out its obligations hereunder and thereunder (which includes the
issuance of the Preferred Shares, Warrant and Warrant Shares). The execution, delivery and
performance by the Company of this Agreement and the Warrant and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by all necessary corporate
action on the part of the Company and its stockholders, and no further approval or authorization is
required on the part of the Company. This Agreement is a valid and binding obligation of



6









 




the
Company enforceable against the Company in accordance with its terms, subject to the Bankruptcy
Exceptions.




               (ii) The execution, delivery and performance by the Company of this Agreement and the Warrant
and the consummation of the transactions contemplated hereby and thereby and compliance by the
Company with the provisions hereof and thereof, will not (A) violate, conflict with, or result in a
breach of any provision of, or constitute a default (or an event which, with notice or lapse of
time or both, would constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration of, or result in the
creation of, any lien, security interest, charge or encumbrance upon any of the properties or
assets of the Company or any subsidiary of the Company (each a “Company Subsidiary” and,
collectively, the “Company Subsidiaries”) under any of the terms, conditions or provisions of (i)
its organizational documents or (ii) any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument or obligation to which the Company or any Company Subsidiary
is a party or by which it or any Company Subsidiary may be bound, or to which the Company or any
Company Subsidiary or any of the properties or assets of the Company or any Company Subsidiary may
be subject, or (B) subject to compliance with the statutes and regulations referred to in the next
paragraph, violate any statute, rule or regulation or any judgment, ruling, order, writ, injunction
or decree applicable to the Company or any Company Subsidiary or any of their respective properties
or assets except, in the case of clauses (A)(ii) and (B), for those occurrences that, individually
or in the aggregate, have not had and would not reasonably be expected to have a Company Material
Adverse Effect.



               (iii) Other than the filing of the Certificates of Designations with the Secretary of State of
its jurisdiction of organization or other applicable Governmental Entity, such filings and
approvals as are required to be made or obtained under any state “blue sky” laws and such as have
been made or obtained, no notice to, filing with, exemption or review by, or authorization, consent
or approval of, any Governmental Entity is required to be made or obtained by the Company in
connection with the consummation by the Company of the Purchase except for any such notices,
filings, exemptions, reviews, authorizations, consents and approvals the failure of which to make
or obtain would not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.



          (f) Anti-takeover Provisions and Rights Plan. The Board of Directors of the Company
(the “Board of Directors”) has taken all necessary action to ensure that the transactions
contemplated by this Agreement and the Warrant and the consummation
of the transactions contemplated hereby and thereby, including the exercise of the Warrant in
accordance with its terms, will be exempt from any anti-takeover or similar provisions of the
Company’s Charter and bylaws, and any other provisions of any applicable “moratorium”, “control
share”, “fair price”, “interested stockholder” or other anti-takeover laws and regulations of any
jurisdiction.




          (g) No Company Material Adverse Effect. Since the last day of the last completed
fiscal period for which financial statements are included in the Company



7









 






Financial Statements (as
defined below), no fact, circumstance, event, change, occurrence, condition or development has
occurred that, individually or in the aggregate, has had or would reasonably be expected to have a
Company Material Adverse Effect.




          (h) Company Financial Statements. The Company has Previously Disclosed each of the
consolidated financial statements of the Company and its consolidated subsidiaries for each of the
last three completed fiscal years of the Company (which shall be audited to the extent audited
financial statements are available prior to the Signing Date) and each completed quarterly period
since the last completed fiscal year (collectively the “Company Financial Statements”). The Company
Financial Statements present fairly in all material respects the consolidated financial position of
the Company and its consolidated subsidiaries as of the dates indicated therein and the
consolidated results of their operations for the periods specified therein; and except as stated
therein, such financial statements (A) were prepared in conformity with GAAP applied on a
consistent basis (except as may be noted therein) and (B) have been prepared from, and are in
accordance with, the books and records of the Company and the Company Subsidiaries.




          (i) Reports.




               (i) Since December 31, 2006, the Company and each Company Subsidiary has filed all reports,
registrations, documents, filings, statements and submissions, together with any amendments
thereto, that it was required to file with any Governmental Entity (the foregoing, collectively,
the “Company Reports”) and has paid all fees and assessments due and payable in connection
therewith, except, in each case, as would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect. As of their respective dates of filing, the
Company Reports complied in all material respects with all statutes and applicable rules and
regulations of the applicable Governmental Entities.



               (ii) The records, systems, controls, data and information of the Company and the Company
Subsidiaries are recorded, stored, maintained and operated under means (including any electronic,
mechanical or photographic process, whether computerized or not) that are under the exclusive
ownership and direct control of the Company or the Company Subsidiaries or their accountants
(including all means of access thereto and therefrom), except for any non-exclusive ownership and
non-direct control that would not reasonably be expected to have a material adverse effect on the
system of internal accounting controls described below in this Section 2.2(i)(ii). The Company (A)
has implemented and maintains adequate disclosure controls and
procedures to ensure that material information relating to the Company, including the
consolidated Company Subsidiaries, is made known to the chief executive officer and the chief
financial officer of the Company by others within those entities, and (B) has disclosed, based on
its most recent evaluation prior to the Signing Date, to the Company’s outside auditors and the
audit committee of the Board of Directors (x) any significant deficiencies and material weaknesses
in the design or operation of internal controls that are reasonably likely to adversely affect the
Company’s ability to record, process, summarize and report financial information and (y) any fraud,
whether or not material,



8









 




that involves management or other employees who have a significant role in
the Company’s internal controls over financial reporting.




          (j) No Undisclosed Liabilities. Neither the Company nor any of the Company
Subsidiaries has any liabilities or obligations of any nature (absolute, accrued, contingent or
otherwise) which are not properly reflected or reserved against in the Company Financial Statements
to the extent required to be so reflected or reserved against in accordance with GAAP, except for
(A) liabilities that have arisen since the last fiscal year end in the ordinary and usual course of
business and consistent with past practice and (B) liabilities that, individually or in the
aggregate, have not had and would not reasonably be expected to have a Company Material Adverse
Effect.




          (k) Offering of Securities. Neither the Company nor any person acting on its behalf
has taken any action (including any offering of any securities of the Company under circumstances
which would require the integration of such offering with the offering of any of the Purchased
Securities under the Securities Act, and the rules and regulations of the Securities and Exchange
Commission (the “SEC”) promulgated thereunder), which might subject the offering, issuance or sale
of any of the Purchased Securities to Investor pursuant to this Agreement to the registration
requirements of the Securities Act.




          (l) Litigation and Other Proceedings. Except (i) as set forth on Schedule C or
(ii) as would not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect, there is no (A) pending or, to the knowledge of the Company, threatened,
claim, action, suit, investigation or proceeding, against the Company or any Company Subsidiary or
to which any of their assets are subject nor is the Company or any Company Subsidiary subject to
any order, judgment or decree or (B) unresolved violation, criticism or exception by any
Governmental Entity with respect to any report or relating to any examinations or inspections of
the Company or any Company Subsidiaries.




          (m) Compliance with Laws. Except as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect, the Company and the Company
Subsidiaries have all permits, licenses, franchises, authorizations, orders and approvals of, and
have made all filings, applications and registrations with, Governmental Entities that are required
in order to permit them to own or lease their properties and assets and to carry on their business
as presently conducted and that are material to the business of the Company or such Company
Subsidiary. Except as set forth on Schedule D, the Company and the Company Subsidiaries
have complied in all respects and are not in default or violation of, and none of them is, to the
knowledge of the Company, under investigation with respect to or, to the knowledge of the Company,
have been threatened to be charged with or given notice of any violation of, any applicable
domestic (federal, state or local) or foreign law, statute, ordinance, license, rule, regulation,
policy or guideline, order, demand, writ, injunction, decree or judgment of any Governmental
Entity, other than such noncompliance, defaults or violations that would not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse Effect. Except for
statutory or regulatory restrictions



9









 






of general application or as set forth on Schedule D,
no Governmental Entity has placed any restriction on the business or properties of the Company or
any Company Subsidiary that would, individually or in the aggregate, reasonably be expected to have
a Company Material Adverse Effect.




          (n) Employee Benefit Matters. Except as would not reasonably be expected to have,
either individually or in the aggregate, a Company Material Adverse Effect: (A) each “employee
benefit plan” (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”)) providing benefits to any current or former employee, officer or
director of the Company or any member of its “Controlled Group” (defined as any organization which
is a member of a controlled group of corporations within the meaning of Section 414 of the Internal
Revenue Code of 1986, as amended (the “Code”)) that is sponsored, maintained or contributed to by
the Company or any member of its Controlled Group and for which the Company or any member of its
Controlled Group would have any liability, whether actual or contingent (each, a “Plan”) has been
maintained in compliance with its terms and with the requirements of all applicable statutes, rules
and regulations, including ERISA and the Code; (B) with respect to each Plan subject to Title IV of
ERISA (including, for purposes of this clause (B), any plan subject to Title IV of ERISA that the
Company or any member of its Controlled Group previously maintained or contributed to in the six
years prior to the Signing Date), (1) no “reportable event” (within the meaning of Section 4043(c)
of ERISA), other than a reportable event for which the notice period referred to in Section 4043(c)
of ERISA has been waived, has occurred in the three years prior to the Signing Date or is
reasonably expected to occur, (2) no “accumulated funding deficiency” (within the meaning of
Section 302 of ERISA or Section 412 of the Code), whether or not waived, has occurred in the three
years prior to the Signing Date or is reasonably expected to occur, (3) the fair market value of
the assets under each Plan exceeds the present value of all benefits accrued under such Plan
(determined based on the assumptions used to fund such Plan) and (4) neither the Company nor any
member of its Controlled Group has incurred in the six years prior to the Signing Date, or
reasonably expects to incur, any liability under Title IV of ERISA (other than contributions to the
Plan or premiums to the PBGC in the ordinary course and without default) in respect of a Plan
(including any Plan that is a “multiemployer plan”, within the meaning of Section 4001(c)(3) of
ERISA); and (C) each Plan that is intended to be qualified under Section 401(a) of the Code has
received a favorable determination letter from the Internal Revenue Service with respect to its
qualified status that has not been revoked, or such a determination letter has been timely applied
for but not received by the Signing Date, and nothing has occurred, whether by action or by failure
to act, which could reasonably be
expected to cause the loss, revocation or denial of such qualified status or favorable
determination letter.




          (o) Taxes. Except as would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect, (i) the Company and the Company Subsidiaries
have filed all federal, state, local and foreign income and franchise Tax returns required to be
filed through the Signing Date, subject to permitted extensions, and have paid all Taxes due
thereon, and (ii) no Tax deficiency has been determined adversely to the Company or any of the
Company Subsidiaries, nor does the



10









 






Company have any knowledge of any Tax deficiencies. “Tax” or
“Taxes” means any federal, state, local or foreign income, gross receipts, property, sales, use,
license, excise, franchise, employment, payroll, withholding, alternative or add on minimum, ad
valorem, transfer or excise tax, or any other tax, custom, duty, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest or penalty, imposed by any
Governmental Entity.




          (p) Properties and Leases. Except as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect, the Company and the Company
Subsidiaries have good and marketable title to all real properties and all other properties and
assets owned by them, in each case free from liens, encumbrances, claims and defects that would
affect the value thereof or interfere with the use made or to be made thereof by them. Except as
would not, individually or in the aggregate, reasonably be expected to have a Company Material
Adverse Effect, the Company and the Company Subsidiaries hold all leased real or personal property
under valid and enforceable leases with no exceptions that would interfere with the use made or to
be made thereof by them.




          (q) Environmental Liability. Except as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect:




               (i) there is no legal, administrative, or other proceeding, claim or action of any nature
seeking to impose, or that would reasonably be expected to result in the imposition of, on the
Company or any Company Subsidiary, any liability relating to the release of hazardous substances as
defined under any local, state or federal environmental statute, regulation or ordinance, including
the Comprehensive Environmental Response, Compensation and Liability Act of 1980, pending or, to
the Company’s knowledge, threatened against the Company or any Company Subsidiary;



               (ii) to the Company’s knowledge, there is no reasonable basis for any such proceeding, claim
or action; and



               (iii) neither the Company nor any Company Subsidiary is subject to any agreement, order,
judgment or decree by or with any court, Governmental Entity or third party imposing any such
environmental liability.



          (r) Risk Management Instruments. Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect, all derivative
instruments, including, swaps, caps, floors and option agreements, whether entered into for the
Company’s own account, or for the account of one or more of the Company Subsidiaries or its or
their customers, were entered into (i) only in the ordinary course of business, (ii) in accordance
with prudent practices and in all material respects with all applicable laws, rules, regulations
and regulatory policies and (iii) with counterparties believed to be financially responsible at the
time; and each of such instruments constitutes the valid and legally binding obligation of the
Company or one of the Company Subsidiaries, enforceable in accordance with its terms, except as may
be



11









 






limited by the Bankruptcy Exceptions. Neither the Company or the Company Subsidiaries, nor, to
the knowledge of the Company, any other party thereto, is in breach of any of its obligations under
any such agreement or arrangement other than such breaches that would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.




          (s) Agreements with Regulatory Agencies. Except as set forth on Schedule E,
neither the Company nor any Company Subsidiary is subject to any material cease-and-desist or other
similar order or enforcement action issued by, or is a party to any material written agreement,
consent agreement or memorandum of understanding with, or is a party to any commitment letter or
similar undertaking to, or is subject to any capital directive by, or since December 31, 2006, has
adopted any board resolutions at the request of, any Governmental Entity (other than the
Appropriate Federal Banking Agencies with jurisdiction over the Company and the Company
Subsidiaries) 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 or
procedures, its internal controls, its management or its operations or business (each item in this
sentence, a “Regulatory Agreement”), nor has the Company or any Company Subsidiary been advised
since December 31, 2006 by any such Governmental Entity that it is considering issuing, initiating,
ordering, or requesting any such Regulatory Agreement. The Company and each Company Subsidiary are
in compliance in all material respects with each Regulatory Agreement to which it is party or
subject, and neither the Company nor any Company Subsidiary has received any notice from any
Governmental Entity indicating that either the Company or any Company Subsidiary is not in
compliance in all material respects with any such Regulatory Agreement. “Appropriate Federal
Banking Agency” means the “appropriate Federal banking agency” with respect to the Company or such
Company Subsidiaries, as applicable, as defined in Section 3(q) of the Federal Deposit Insurance
Act (12 U.S.C. Section 1813(q)).




          (t) Insurance. The Company and the Company Subsidiaries are insured with reputable
insurers against such risks and in such amounts as the management of the Company reasonably has
determined to be prudent and consistent with industry practice. The Company and the Company
Subsidiaries are in material compliance with their insurance policies and are not in default under
any of the material terms thereof, each such policy is outstanding and in full force and effect,
all premiums and other payments due under any material policy have been paid, and all claims
thereunder have been filed in due and timely fashion, except, in each case, as would not,
individually or in the aggregate, reasonably he expected to have a Company Material Adverse Effect.




          (u) Intellectual Property. Except as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect, (i) the Company and each Company
Subsidiary owns or otherwise has the right to use, all intellectual property rights, including all
trademarks, trade dress, trade names, service marks, domain names, patents, inventions, trade
secrets, know-how, works of authorship and copyrights therein, that are used in the conduct of
their existing businesses and all



12









 






rights relating to the plans, design and specifications of any of
its branch facilities (“Proprietary Rights”) free and clear of all liens and any claims of
ownership by current or former employees, contractors, designers or others and (ii) neither the
Company nor any of the Company Subsidiaries is materially infringing, diluting, misappropriating or
violating, nor has the Company or any or the Company Subsidiaries received any written (or, to the
knowledge of the Company, oral) communications alleging that any of them has materially infringed,
diluted, misappropriated or violated, any of the Proprietary Rights owned by any other person.
Except as would not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect, to the Company’s knowledge, no other person is infringing, diluting,
misappropriating or violating, nor has the Company or any or the Company Subsidiaries sent any
written communications since January 1, 2006 alleging that any person has infringed, diluted,
misappropriated or violated, any of the Proprietary Rights owned by the Company and the Company
Subsidiaries.




          (v) Brokers and Finders. No broker, finder or investment banker is entitled to any
financial advisory, brokerage, finder’s or other fee or commission in connection with this
Agreement or the Warrant or the transactions contemplated hereby or thereby based upon arrangements
made by or on behalf of the Company or any Company Subsidiary for which the Investor could have any
liability.




Article III

Covenants




     3.1 Commercially Reasonable Efforts. Subject to the terms and conditions of this
Agreement, each of the parties will use its commercially reasonable efforts in good faith to take,
or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or
desirable, or advisable under applicable laws, so as to permit consummation of the Purchase as
promptly as practicable and otherwise to enable consummation of the transactions contemplated
hereby and shall use commercially reasonable efforts to cooperate with the other party to that end.



     3.2 Expenses. Unless otherwise provided in this Agreement or the Warrant, each of the parties hereto will
bear and pay all costs and expenses incurred by it or on its behalf in connection with the
transactions contemplated under this Agreement and the Warrant, including fees and expenses of its
own financial or other consultants, investment bankers, accountants and counsel.



     3.3 Sufficiency of Authorized Warrant Preferred Stock; Exchange Listing.



          (a) During the period from the Closing Date until the date on which the Warrant has been fully
exercised, the Company shall at all times have reserved for issuance, free of preemptive or similar
rights, a sufficient number of authorized and unissued Warrant Shares to effectuate such exercise.




          (b) If the Company lists its Common Stock on any national securities exchange, the Company
shall, if requested by the Investor, promptly use its reasonable



13









 






best efforts to cause the
Preferred Shares and Warrant Shares to be approved for listing on a national securities exchange as
promptly as practicable following such request.




     3.4 Certain Notifications Until Closing. From the Signing Date until the Closing, the
Company shall promptly notify the Investor of (i) any fact, event or circumstance of which it is
aware and which would reasonably be expected to cause any representation or warranty of the Company
contained in this Agreement to be untrue or inaccurate in any material respect or to cause any
covenant or agreement of the Company contained in this Agreement not to be complied with or
satisfied in any material respect and (ii) except as Previously Disclosed, any fact, circumstance,
event, change, occurrence, condition or development of which the Company is aware and which,
individually or in the aggregate, has had or would reasonably be expected to have a Company
Material Adverse Effect; provided, however, that delivery of any notice pursuant to this Section
3.4 shall not limit or affect any rights of or remedies available to the Investor; provided,
further, that a failure to comply with this Section 3.4 shall not constitute a breach of this
Agreement or the failure of any condition set forth in Section 1.2 to be satisfied unless the
underlying Company Material Adverse Effect or material breach would independently result in the
failure of a condition set forth in Section 1.2 to be satisfied.



     3.5 Access, Information and Confidentiality.



          (a) From the Signing Date until the date when the Investor holds an amount of Preferred Shares
having an aggregate liquidation value of less than 10% of the Purchase Price, the Company will
permit the Investor and its agents, consultants, contractors and advisors (x) acting through the
Appropriate Federal Banking Agency, or otherwise to the extent necessary to evaluate, manage, or
transfer its investment in the Company, to examine the corporate books and make copies thereof and
to discuss the
affairs, finances and accounts of the Company and the Company Subsidiaries with the principal
officers of the Company, all upon reasonable notice and at such reasonable times and as often as
the Investor may reasonably request and (y) to review any information material to the Investor’s
investment in the Company provided by the Company to its Appropriate Federal Banking Agency. Any
investigation pursuant to this Section 3.5 shall be conducted during normal business hours and in
such manner as not to interfere unreasonably with the conduct of the business of the Company, and
nothing herein shall require the Company or any Company Subsidiary to disclose any information to
the Investor to the extent (i) prohibited by applicable law or regulation, or (ii) that such
disclosure would reasonably be expected to cause a violation of any agreement to which the Company
or any Company Subsidiary is a party or would cause a risk of a loss of privilege to the Company or
any Company Subsidiary (provided that the Company shall use commercially reasonable efforts to make
appropriate substitute disclosure arrangements under circumstances where the restrictions in this
clause (ii) apply).




          (b) From the Signing Date until the date on which all of the Preferred Shares and Warrant
Shares have been redeemed in whole, the Company will deliver, or will cause to be delivered, to the
Investor:



14









 







               (i) as soon as available after the end of each fiscal year of the Company, and in any event
within 90 days thereafter, a consolidated balance sheet of the Company as of the end of such fiscal
year, and consolidated statements of income, retained earnings and cash flows of the Company for
such year, in each case prepared in accordance with GAAP and setting forth in each case in
comparative form the figures for the previous fiscal year of the Company, and which shall be
audited to the extent audited financial statements are available; and



               (ii) as soon as available after the end of the first, second and third quarterly periods in
each fiscal year of the Company, a copy of any quarterly reports provided to other stockholders of
the Company or Company management.



          (c) The Investor will use reasonable best efforts to hold, and will use reasonable best
efforts to cause its agents, consultants, contractors and advisors to hold, in confidence all
non-public records, books, contracts, instruments, computer data and other data and information
(collectively, “Information”) concerning the Company furnished or made available to it by the
Company or its representatives pursuant to this Agreement (except to the extent that such
information can be shown to have been (i) previously known by such party on a non-confidential
basis, (ii) in the public domain through no fault of such party or (iii) later lawfully acquired
from other sources by the party to which it was furnished (and without violation of any other
confidentiality obligation)); provided that nothing herein shall prevent the Investor from
disclosing any Information to the extent required by applicable laws or regulations or by any
subpoena or similar legal process.




          (d) The Investor’s information rights pursuant to Section 3.5(b) may be assigned by the
Investor to a transferee or assignee of the Purchased Securities or the Warrant Shares or with a
liquidation preference or, in the case of the Warrant, the
liquidation preference of the underlying shares of Warrant Preferred Stock, no less than an
amount equal to 2% of the initial aggregate liquidation preference of the Preferred Shares.




Article IV

Additional Agreements




     4.1 Purchase for Investment. The Investor acknowledges that the Purchased Securities
and the Warrant Shares have not been registered under the Securities Act or under any state
securities laws. The Investor (a) is acquiring the Purchased Securities pursuant to an exemption
from registration under the Securities Act solely for investment with no present intention to
distribute them to any person in violation of the Securities Act or any applicable U.S. state
securities laws, (b) will not sell or otherwise dispose of any of the Purchased Securities or the
Warrant Shares, except in compliance with the registration requirements or exemption provisions of
the Securities Act and any applicable U.S. state securities laws, and (c) has such knowledge and
experience in financial and business matters and in investments of this type that it is capable of
evaluating the merits and risks of the Purchase and of making an informed investment decision.




15












 





     4.2 Legend.



          (a) The Investor agrees that all certificates or other instruments representing the Warrant
will bear a legend substantially to the following effect:





“THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE TRANSFERRED, SOLD 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.




THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER
PROVISIONS OF A SECURITIES PURCHASE AGREEMENT BETWEEN THE ISSUER OF THESE
SECURITIES AND THE INVESTOR REFERRED TO THEREIN, A COPY OF WHICH IS ON FILE WITH
THE ISSUER. THE SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID AGREEMENT. ANY SALE OR OTHER
TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE VOID.”



          (b) In addition, the Investor agrees that all certificates or other instruments representing
the Preferred Shares and the Warrant Shares will bear a legend substantially to the following
effect:





“THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE NOT SAVINGS ACCOUNTS, DEPOSITS
OR OTHER OBLIGATIONS OF A BANK AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.




THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS
OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD 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. EACH PURCHASER OF THE SECURITIES REPRESENTED BY THIS
INSTRUMENT IS NOTIFIED
THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM SECTION 5 OF THE SECURITIES
ACT PROVIDED BY RULE



16









 







144A THEREUNDER. ANY TRANSFEREE OF THE SECURITIES REPRESENTED
BY THIS INSTRUMENT BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT IT IS A “QUALIFIED
INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (2)
AGREES THAT IT WILL NOT OFFER, SELL OR OTHERWISE TRANSFER THE SECURITIES
REPRESENTED BY THIS INSTRUMENT EXCEPT (A) PURSUANT TO A REGISTRATION STATEMENT
WHICH IS THEN EFFECTIVE UNDER THE SECURITIES ACT, (B) FOR SO LONG AS THE
SECURITIES REPRESENTED BY THIS INSTRUMENT ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS
DEFINED IN RULE I44A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) TO THE ISSUER OR (D)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THE
SECURITIES REPRESENTED BY THIS INSTRUMENT ARE TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND.




THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER
PROVISIONS OF A SECURITIES PURCHASE AGREEMENT BETWEEN THE ISSUER OF THESE
SECURITIES AND THE INVESTOR REFERRED TO THEREIN, A COPY OF WHICH IS ON FILE WITH
THE ISSUER. THE SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID AGREEMENT. ANY SALE OR OTHER
TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE VOID.”



          (c) In the event that any Purchased Securities or Warrant Shares (i) become registered under
the Securities Act or (ii) are eligible to be transferred without restriction in accordance with
Rule 144 or another exemption from registration under the Securities Act (other than Rule 144A),
the Company shall issue new certificates or other instruments representing such Purchased
Securities or Warrant Shares, which shall not contain the applicable legends in Sections 4.2(a) and
(b) above; provided that the Investor surrenders to the Company the previously issued certificates
or other instruments.




     4.3 Certain Transactions. The Company will not merge or consolidate with, 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 (or its ultimate parent entity), as the case may be (if not the Company), expressly
assumes the due and punctual performance and



17









 







observance of each and every covenant, agreement and
condition of this Agreement to be performed and observed by the Company.



     4.4 Transfer of Purchased Securities and Warrant Shares; Restrictions on Exercise of the
Warrant. Subject to compliance with applicable securities laws, the Investor shall be permitted to
transfer, sell, assign or otherwise dispose of (“Transfer”) all or a portion of the Purchased
Securities or Warrant Shares at any time, and the Company shall take all steps as may be reasonably
requested by the Investor to facilitate the Transfer of the Purchased Securities and the Warrant
Shares; provided that the Investor shall not Transfer any Purchased Securities or Warrant Shares if
such transfer would require the Company to be subject to the periodic reporting requirements of
Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”). In furtherance of
the foregoing, the Company shall provide reasonable cooperation to facilitate any Transfers of the
Purchased Securities or Warrant Shares, including, as is reasonable under the circumstances, by
furnishing such information concerning the Company and its business as a proposed transferee may
reasonably request (including such information as is required by Section 4.5(k)) and making
management of the Company reasonably available to respond to questions of a proposed transferee in
accordance with customary practice, subject in all cases to the proposed transferee agreeing to a
customary confidentiality agreement.



     4.5 Registration Rights.



          (a) Unless and until the Company becomes subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act, the Company shall have no obligation to comply with the provisions of
this Section 4.5 (other than Section 4.5(b)(iv)-(vi)); provided that the Company covenants and
agrees that it shall comply with this Section 4.5 as soon as practicable after the date that it
becomes subject to such reporting requirements.




          (b) Registration.




               (i) Subject to the terms and conditions of this Agreement, the Company covenants and agrees
that as promptly as practicable after the date that the Company becomes subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act (and in any event no later than 30 days
thereafter), the Company shall prepare and file with the SEC a Shelf Registration Statement
covering all Registrable Securities (or otherwise designate an existing Shelf Registration
Statement filed with the SEC to cover the Registrable Securities), and, to the extent the Shelf
Registration
Statement has not theretofore been declared effective or is not automatically effective upon
such filing, the Company shall use reasonable best efforts to cause such Shelf Registration
Statement to be declared or become effective and to keep such Shelf Registration Statement
continuously effective and in compliance with the Securities Act and usable for resale of such
Registrable Securities for a period from the date of its initial effectiveness until such time as
there are no Registrable Securities remaining (including by refiling such Shelf Registration
Statement (or a new Shelf Registration Statement) if the initial Shelf Registration Statement
expires). Notwithstanding the foregoing, if the



18









 







Company is not eligible to file a registration
statement on Form S-3, then the Company shall not be obligated to file a Shelf Registration
Statement unless and until requested to do so in writing by the Investor.



               (ii) Any registration pursuant to Section 4.5(b)(i) shall be effected by means of a shelf
registration on an appropriate form under Rule 415 under the Securities Act (a “Shelf Registration
Statement”). If the Investor or any other Holder intends to distribute any Registrable Securities
by means of an underwritten offering it shall promptly so advise the Company and the Company shall
take all reasonable steps to facilitate such distribution, including the actions required pursuant
to Section 4.5(d); provided that the Company shall not be required to facilitate an underwritten
offering of Registrable Securities unless the expected gross proceeds from such offering exceed (i)
2% of the initial aggregate liquidation preference of the Preferred Shares if such initial
aggregate liquidation preference is less than $2 billion and (ii) $200 million if the initial
aggregate liquidation preference of the Preferred Shares is equal to or greater than $2 billion.
The lead underwriters in any such distribution shall be selected by the Holders of a majority of
the Registrable Securities to be distributed; provided that to the extent appropriate and permitted
under applicable law, such Holders shall consider the qualifications of any broker-dealer Affiliate
of the Company in selecting the lead underwriters in any such distribution.



               (iii) The Company shall not be required to effect a registration (including a resale of
Registrable Securities from an effective Shelf Registration Statement) or an underwritten offering
pursuant to Section 4.5(b): (A) with respect to securities that are not Registrable Securities; or
(B) if the Company has notified the Investor and all other Holders that in the good faith judgment
of the Board of Directors, it would be materially detrimental to the Company or its securityholders
for such registration or underwritten offering to be effected at such time, in which event the
Company shall have the right to defer such registration for a period of not more than 45 days after
receipt of the request of the Investor or any other Holder; provided that such right to delay a
registration or underwritten offering shall be exercised by the Company (1) only if the Company has
generally exercised (or is concurrently exercising) similar black-out rights against holders of
similar securities that have registration rights and (2) not more than three times in any 12-month
period and not more than 90 days in the aggregate in any 12-month period.



               (iv) If during any period when an effective Shelf Registration Statement is not available, the
Company proposes to register any of its equity securities, other than a registration pursuant to
Section 4.5(b)(i) or a Special Registration, and the
registration form to be filed may be used for the registration or qualification for
distribution of Registrable Securities, the Company will give prompt written notice to the Investor
and all other Holders of its intention to effect such a registration (but in no event less than ten
days prior to the anticipated filing date) and will include in such registration all Registrable
Securities with respect to which the Company has received written requests for inclusion therein
within ten business days after the date of the Company’s notice (a “Piggyback Registration”). Any
such person that has made such a written request may withdraw its Registrable Securities from such
Piggyback Registration by



19









 







giving written notice to the Company and the managing underwriter, if
any, on or before the fifth business day prior to the planned effective date of such Piggyback
Registration. The Company may terminate or withdraw any registration under this Section 4.5(b)(iv)
prior to the effectiveness of such registration, whether or not Investor or any other Holders have
elected to include Registrable Securities in such registration.



               (v) If the registration referred to in Section 4.5(b)(iv) is proposed to be underwritten, the
Company will so advise Investor and all other Holders as a part of the written notice given
pursuant to Section 4.5(b)(iv). In such event, the right of Investor and all other Holders to
registration pursuant to Section 4.5(b) will be conditioned upon such persons’ participation in
such underwriting and the inclusion of such person’s Registrable Securities in the underwriting if
such securities are of the same class of securities as the securities to be offered in the
underwritten offering, and each such person will (together with the Company and the other persons
distributing their securities through such underwriting) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such underwriting by the Company;
provided that the Investor (as opposed to other Holders) shall not be required to indemnify any
person in connection with any registration. If any participating person disapproves of the terms of
the underwriting, such person may elect to withdraw therefrom by written notice to the Company, the
managing underwriters and the Investor (if the Investor is participating in the underwriting).



               (vi) If either (x) the Company grants “piggyback” registration rights to one or more third
parties to include their securities in an underwritten offering under the Shelf Registration
Statement pursuant to Section 4.5(b)(ii) or (y) a Piggyback Registration under Section 4.5(b)(iv)
relates to an underwritten offering on behalf of the Company, and in either case the managing
underwriters advise the Company that in their reasonable opinion the number of securities requested
to be included in such offering exceeds the number which can be sold without adversely affecting
the marketability of such offering (including an adverse effect on the per share offering price),
the Company will include in such offering only such number of securities that in the reasonable
opinion of such managing underwriters can be sold without adversely affecting the marketability of
the offering (including an adverse effect on the per share offering price), which securities will
be so included in the following order of priority: (A) first, in the case of a Piggyback
Registration under Section 4.5(b)(iv), the securities the Company proposes to sell, (B) then the
Registrable Securities of the Investor and all other Holders who have requested inclusion of
Registrable Securities pursuant to Section 4.5(b)(ii) or Section 4.5(b)(iv), as applicable, pro
rata on the basis of the aggregate number of such securities or shares owned by each such person
and (C) lastly, any other securities of the Company
that have been requested to be so included, subject to the terms of this Agreement; provided,
however, that if the Company has, prior to the Signing Date, entered into an agreement with respect
to its securities that is inconsistent with the order of priority contemplated hereby then it shall
apply the order of priority in such conflicting agreement to the extent that it would otherwise
result in a breach under such agreement.



          (c) Expenses of Registration. All Registration Expenses incurred in connection with
any registration, qualification or compliance hereunder shall be borne by




20









 







the Company. All Selling
Expenses incurred in connection with any registrations hereunder shall be borne by the holders of
the securities so registered pro rata on the basis of the aggregate offering or sale price of the
securities so registered.




          (d) Obligations of the Company. Whenever required to effect the registration of any
Registrable Securities or facilitate the distribution of Registrable Securities pursuant to an
effective Shelf Registration Statement, the Company shall, as expeditiously as reasonably
practicable:




               (i) Prepare and file with the SEC a prospectus supplement or post-effective amendment with
respect to a proposed offering of Registrable Securities pursuant to an effective registration
statement, subject to Section 4.5(d), keep such registration statement effective and keep such
prospectus supplement current until the securities described therein are no longer Registrable
Securities.



               (ii) Prepare and file with the SEC such amendments and supplements to the applicable
registration statement and the prospectus or prospectus supplement used in connection with such
registration statement as may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration statement.



               (iii) Furnish to the Holders and any underwriters such number of copies of the applicable
registration statement and each such amendment and supplement thereto (including in each case all
exhibits) and of a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may reasonably request in
order to facilitate the disposition of Registrable Securities owned or to be distributed by them.



               (iv) Use its reasonable best efforts to register and qualify the securities covered by such
registration statement under such other securities or Blue Sky laws of such jurisdictions as shall
be reasonably requested by the Holders or any managing underwriter(s), to keep such registration or
qualification in effect for so long as such registration statement remains in effect, and to take
any other action which may be reasonably necessary to enable such seller to consummate the
disposition in such jurisdictions of the securities owned by such Holder; provided that the Company
shall not be required in connection therewith or as a condition thereto to qualify to do business
or to file a general consent to service of process in any such states or jurisdictions.



               (v) Notify each Holder of Registrable Securities at any time when a prospectus relating
thereto is required to be delivered under the Securities Act of the happening of any event as a
result of which the applicable prospectus, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances then existing.



               (vi) Give written notice to the Holders:



21









 






          (A) when any registration statement filed pursuant to Section 4.5(a) or any
amendment thereto has been filed with the SEC (except for any amendment effected by
the filing of a document with the SEC pursuant to the Exchange Act) and when such
registration statement or any post-effective amendment thereto has become
effective;




          (B) of any request by the SEC for amendments or supplements to any
registration statement or the prospectus included therein or for additional
information:




          (C) of the issuance by the SEC of any stop order suspending the effectiveness
of any registration statement or the initiation of any proceedings for that
purpose;




          (D) of the receipt by the Company or its legal counsel of any notification
with respect to the suspension of the qualification of the applicable Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose;




          (E) of the happening of any event that requires the Company to make changes in
any effective registration statement or the prospectus related to the registration
statement in order to make the statements therein not misleading (which notice
shall be accompanied by an instruction to suspend the use of the prospectus until
the requisite changes have been made); and




          (F) if at any time the representations and warranties of the Company contained
in any underwriting agreement contemplated by Section 4.5(d)(x) cease to be true
and correct.



               (vii) Use its reasonable best efforts to prevent the issuance or obtain the withdrawal of any
order suspending the effectiveness of any registration statement referred to in Section
4.5(d)(vi)(C) at the earliest practicable time.



               (viii) Upon the occurrence of any event contemplated by Section 4.5(d)(v) or 4.5(d)(vi)(E),
promptly prepare a post-effective amendment to such registration statement or a supplement to the
related prospectus or file any other required document so that, as thereafter delivered to the
Holders and any underwriters, the prospectus will not contain an untrue statement of a material
fact or omit to state any
material fact necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. If the Company notifies the Holders in accordance with
Section 4.5(d)(vi)(E) to suspend the use of the prospectus until the requisite changes to the
prospectus have been made, then the Holders and any underwriters shall suspend use of such
prospectus and use their reasonable best efforts to return to the Company all copies of such
prospectus (at the Company’s expense) other than permanent file copies then in such Holders’ or
underwriters’ possession. The total



22









 







number of days that any such suspension may be in effect in any
12-month period shall not exceed 90 days.



               (ix) Use reasonable best efforts to procure the cooperation of the Company’s transfer agent in
settling any offering or sale of Registrable Securities, including with respect to the transfer of
physical stock certificates into book-entry form in accordance with any procedures reasonably
requested by the Holders or any managing underwriter(s).



               (x) If an underwritten offering is requested pursuant to Section 4.5(b)(ii), enter into an
underwriting agreement in customary form, scope and substance and take all such other actions
reasonably requested by the Holders of a majority of the Registrable Securities being sold in
connection therewith or by the managing underwriter(s), if any, to expedite or facilitate the
underwritten disposition of such Registrable Securities, and in connection therewith in any
underwritten offering (including making members of management and executives of the Company
available to participate in “road shows”, similar sales events and other marketing activities), (A)
make such representations and warranties to the Holders that are selling stockholders and the
managing underwriter(s), if any, with respect to the business of the Company and its subsidiaries,
and the Shelf Registration Statement, prospectus and documents, if any, incorporated or deemed to
be incorporated by reference therein, in each case, in customary form, substance and scope, and, if
true, confirm the same if and when requested, (B) use its reasonable best efforts to furnish the
underwriters with opinions of counsel to the Company, addressed to the managing underwriter(s), if
any, covering the matters customarily covered in such opinions requested in underwritten offerings,
(C) use its reasonable best efforts to obtain “cold comfort” letters from the independent certified
public accountants of the Company (and, if necessary, any other independent certified public
accountants of any business acquired by the Company for which financial statements and financial
data are included in the Shelf Registration Statement) who have certified the financial statements
included in such Shelf Registration Statement, addressed to each of the managing underwriter(s), if
any, such letters to be in customary form and covering matters of the type customarily covered in
“cold comfort” letters, (D) if an underwriting agreement is entered into, the same shall contain
indemnification provisions and procedures customary in underwritten offerings (provided that the
Investor shall not be obligated to provide any indemnity), and (E) deliver such documents and
certificates as may be reasonably requested by the Holders of a majority of the Registrable
Securities being sold in connection therewith, their counsel and the managing underwriter(s), if
any, to evidence the continued validity of the representations and warranties made pursuant to
clause (i) above and to evidence compliance with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company.



               (xi) Make available for inspection by a representative of Holders that are selling
stockholders, the managing underwriter(s), if any, and any attorneys or accountants retained by
such Holders or managing underwriter(s), at the offices where normally kept, during reasonable
business hours, financial and other records, pertinent corporate documents and properties of the
Company, and cause the officers, directors and employees of the Company to supply all information
in each case



23









 







reasonably requested (and of the type customarily provided in connection with due
diligence conducted in connection with a registered public offering of securities) by any such
representative, managing underwriter(s), attorney or accountant in connection with such Shelf
Registration Statement.



               (xii) Use reasonable best efforts to cause all such Registrable Securities to be listed on
each national securities exchange on which similar securities issued by the Company are then listed
or, if no similar securities issued by the Company are then listed on any national securities
exchange, use its reasonable best efforts to cause all such Registrable Securities to be listed on
such securities exchange as the Investor may designate.



               (xiii) If requested by Holders of a majority of the Registrable Securities being registered
and/or sold in connection therewith, or the managing underwriter(s), if any, promptly include in a
prospectus supplement or amendment such information as the Holders of a majority of the Registrable
Securities being registered and/or sold in connection therewith or managing underwriter(s), if any,
may reasonably request in order to permit the intended method of distribution of such securities
and make all required filings of such prospectus supplement or such amendment as soon as
practicable after the Company has received such request.



               (xiv) Timely provide to its security holders earning statements satisfying the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder.



          (e) Suspension of Sales. Upon receipt of written notice from the Company that a
registration statement, prospectus or prospectus supplement contains or may contain an untrue
statement of a material fact or omits or may omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that circumstances exist that
make inadvisable use of such registration statement, prospectus or prospectus supplement, the
Investor and each Holder of Registrable Securities shall forthwith discontinue disposition of
Registrable Securities until the Investor and/or Holder has received copies of a supplemented or
amended prospectus or prospectus supplement, or until the Investor and/or such Holder is advised in
writing by the Company that the use of the prospectus and, if applicable, prospectus supplement may
be resumed, and, if so directed by the Company, the Investor and/or such Holder shall deliver to
the Company (at the Company’s expense) all copies, other than permanent file copies then in the
Investor and/or such Holder’s possession, of the prospectus and, if applicable, prospectus
supplement covering such Registrable Securities current at the time of receipt of such notice. The
total number of days that any such suspension may be in effect in any 12-month period shall not
exceed 90 days.




          (f) Termination of Registration Rights. A Holder’s registration rights as to any
securities held by such Holder (and its Affiliates, partners, members and former members) shall not
be available unless such securities are Registrable Securities.




          (g) Furnishing Information.




24









 








               (i) Neither the Investor nor any Holder shall use any free writing prospectus (as defined in
Rule 405) in connection with the sale of Registrable Securities without the prior written consent
of the Company.



               (ii) It shall be a condition precedent to the obligations of the Company to take any action
pursuant to Section 4.5(d) that Investor and/or the selling Holders and the underwriters, if any,
shall furnish to the Company such information regarding themselves, the Registrable Securities held
by them and the intended method of disposition of such securities as shall be required to effect
the registered offering of their Registrable Securities.



          (h) Indemnification.




               (i) The Company agrees to indemnify each Holder and, if a Holder is a person other than an
individual, such Holder’s officers, directors, employees, agents, representatives and Affiliates,
and each Person, if any, that controls a Holder within the meaning of the Securities Act (each, an
“Indemnitee”), against any and all losses, claims, damages, actions, liabilities, costs and
expenses (including reasonable fees, expenses and disbursements of attorneys and other
professionals incurred in connection with investigating, defending, settling, compromising or
paying any such losses, claims, damages, actions, liabilities, costs and expenses), joint or
several, arising out of or based upon any untrue statement or alleged untrue statement of material
fact contained in any registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto or any documents incorporated
therein by reference or contained in any free writing prospectus (as such term is defined in Rule
405) prepared by the Company or authorized by it in writing for use by such Holder (or any
amendment or supplement thereto); or any omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, that the Company shall not be liable to such
Indemnitee in any such case to the extent that any such loss, claim, damage, liability (or action
or proceeding in respect thereof) or expense arises out of or is based upon (A) an untrue statement
or omission made in such registration statement, including any such preliminary prospectus or final
prospectus contained therein or any such amendments or supplements thereto or contained in any free
writing prospectus (as such term is defined in Rule 405) prepared by the Company or authorized by
it in writing for use by such Holder (or any amendment or supplement thereto), in reliance upon and
in conformity with information regarding such Indemnitee or its plan of distribution or ownership
interests which was furnished in writing to the Company by such Indemnitee for use in connection
with such registration statement, including any such preliminary prospectus or final prospectus
contained therein or any such amendments or supplements thereto, or (B)
offers or sales effected by or on behalf of such Indemnitee “by means of’ (as defined in Rule
159A) a “free writing prospectus” (as defined in Rule 405) that was not authorized in writing by
the Company.



               (ii) If the indemnification provided for in Section 4.5(h)(i) is unavailable to an Indemnitee
with respect to any losses, claims, damages, actions,



25









 







liabilities, costs or expenses referred to
therein or is insufficient to hold the Indemnitee harmless as contemplated therein, then the
Company, in lieu of indemnifying such Indemnitee, shall contribute to the amount paid or payable by
such Indemnitee as a result of such losses, claims, damages, actions, liabilities, costs or
expenses in such proportion as is appropriate to reflect the relative fault of the Indemnitee, on
the one hand, and the Company, on the other hand, in connection with the statements or omissions
which resulted in such losses, claims, damages, actions, liabilities, costs or expenses as well as
any other relevant equitable considerations. The relative fault of the Company, on the one hand,
and of the Indemnitee, on the other hand, shall be determined by reference to, among other factors,
whether the untrue statement of a material fact or omission to state a material fact relates to
information supplied by the Company or by the Indemnitee and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission;
the Company and each Holder agree that it would not be just and equitable if contribution pursuant
to this Section 4.5(h)(ii) were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred to in Section
4.5(h)(i). No Indemnitee guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from the Company if the Company was
not guilty of such fraudulent misrepresentation.



          (i) Assignment of Registration Rights. The rights of the Investor to registration of
Registrable Securities pursuant to Section 4.5(b) may be assigned by the Investor to a transferee
or assignee of Registrable Securities with a liquidation preference or, in the case of the Warrant,
the liquidation preference of the underlying shares of Warrant Preferred Stock, no less than an
amount equal to (i) 2% of the initial aggregate liquidation preference of the Preferred Shares if
such initial aggregate liquidation preference is less than $2 billion and (ii) $200 million if the
initial aggregate liquidation preference of the Preferred Shares is equal to or greater than $2
billion; provided, however, the transferor shall, within ten days after such transfer, furnish to
the Company written notice of the name and address of such transferee or assignee and the number
and type of Registrable Securities that are being assigned.



          (j) Clear Market. With respect to any underwritten offering of Registrable Securities
by the Investor or other Holders pursuant to this Section 4.5, the Company agrees not to effect
(other than pursuant to such registration or pursuant to a Special Registration) any public sale or
distribution, or to file any Shelf Registration Statement (other than such registration or a
Special Registration) covering any preferred stock of the Company or any securities convertible
into or exchangeable or exercisable for preferred stock of the Company, during the period not to
exceed ten days prior and 60 days following the effective date of such offering or such longer
period up to 90 days as may be requested by the managing underwriter for such underwritten
offering. The
Company also agrees to cause such of its directors and senior executive officers to execute
and deliver customary lock-up agreements in such form and for such time period up to 90 days as may
be requested by the managing underwriter. “Special Registration” means the registration of (A)
equity securities and/or options or other rights in respect thereof solely registered on Form S-4
or Form S-8 (or successor form) or (B) shares of equity securities and/or options or other rights
in respect thereof to be offered to directors,



26









 







members of management, employees, consultants,
customers, lenders or vendors of the Company or Company Subsidiaries or in connection with dividend
reinvestment plans.



          (k) Rule 144; Rule 144A. With a view to making available to the Investor and Holders
the benefits of certain rules and regulations of the SEC which may permit the sale of the
Registrable Securities to the public without registration, the Company agrees to use its reasonable
best efforts to:




               (i) make and keep public information available, as those terms are understood and defined in
Rule 144(c)(1) or any similar or analogous rule promulgated under the Securities Act, at all times
after the Signing Date;



               (ii) (A) file with the SEC, in a timely manner, all reports and other documents required of
the Company under the Exchange Act, and (B) if at any time the Company is not required to file such
reports, make available, upon the request of any Holder, such information necessary to permit sales
pursuant to Rule 144A (including the information required by Rule 144A(d)(4) under the Securities
Act);



               (iii) so long as the Investor or a Holder owns any Registrable Securities, furnish to the
Investor or such Holder forthwith upon request: a written statement by the Company as to its
compliance with the reporting requirements of Rule 144 under the Securities Act, and of the
Exchange Act; a copy of the most recent annual or quarterly report of the Company; and such other
reports and documents as the Investor or Holder may reasonably request in availing itself of any
rule or regulation of the SEC allowing it to sell any such securities to the public without
registration; and



               (iv) take such further action as any Holder may reasonably request, all to the extent required
from time to time to enable such Holder to sell Registrable Securities without registration under
the Securities Act.



          (l) As used in this Section 4.5, the following terms shall have the following respective
meanings:




               (i) “Holder” means the Investor and any other holder of Registrable Securities to whom the
registration rights conferred by this Agreement have been transferred in compliance with Section
4.5(h) hereof.



               (ii) “Holders’ Counsel” means one counsel for the selling Holders chosen by Holders holding a
majority interest in the Registrable Securities being registered.



               (iii) “Register,” “registered,” and “registration” shall refer to a registration effected by
preparing and (A) filing a registration statement or amendment thereto in compliance with the
Securities Act and applicable rules and regulations thereunder, and the declaration or ordering of
effectiveness of such registration statement or amendment thereto or (B) filing a prospectus and/or
prospectus supplement in respect of an appropriate effective registration statement on Form S-3.



27









 





               (iv) “Registrable Securities” means (A) all Preferred Shares, (B) the Warrant (subject to
Section 4.5(q)) and (C) any equity securities issued or issuable directly or indirectly with
respect to the securities referred to in the foregoing clauses (A) or (B) by way of conversion,
exercise or exchange thereof, including the Warrant Shares, or share dividend or share split or in
connection with a combination of shares, recapitalization, reclassification, merger, amalgamation,
arrangement, consolidation or other reorganization, provided that, once issued, such securities
will not be Registrable Securities when (1) they are sold pursuant to an effective registration
statement under the Securities Act, (2) except as provided below in Section 4.5(p), they may be
sold pursuant to Rule 144 without limitation thereunder on volume or manner of sale, (3) they shall
have ceased to be outstanding or (4) they have been sold in a private transaction in which the
transferor’s rights under this Agreement are not assigned to the transferee of the securities. No
Registrable Securities may be registered under more than one registration statement at any one
time.



               (v) “Registration Expenses” mean all expenses incurred by the Company in effecting any
registration pursuant to this Agreement (whether or not any registration or prospectus becomes
effective or final) or otherwise complying with its obligations under this Section 4.5, including
all registration, filing and listing fees, printing expenses, fees and disbursements of counsel for
the Company, blue sky fees and expenses, expenses incurred in connection with any “road show”, the
reasonable fees and disbursements of Holders’ Counsel, and expenses of the Company’s independent
accountants in connection with any regular or special reviews or audits incident to or required by
any such registration, but shall not include Selling Expenses.



               (vi) “Rule 144”, “Rule 144A”, “Rule 159A”, “Rule 405” and “Rule 415” mean, in each case, such
rule promulgated under the Securities Act (or any successor provision), as the same shall be
amended from time to time.



               (vii) “Selling Expenses” mean all discounts, selling commissions and stock transfer taxes
applicable to the sale of Registrable Securities and fees and disbursements of counsel for any
Holder (other than the fees and disbursements of Holders’ Counsel included in Registration
Expenses).



          (m) At any time, any holder of Securities (including any Holder) may elect to forfeit its
rights set forth in this Section 4.5 from that date forward; provided, that a Holder forfeiting
such rights shall nonetheless be entitled to participate under Section 4.5(b)(iv) — (vi) in any
Pending Underwritten Offering to the same extent that such Holder would have been entitled to if
the holder had not withdrawn; and provided, further, that no such forfeiture shall terminate a
Holder’s rights or obligations under Section 4.5(g)
with respect to any prior registration or Pending Underwritten Offering. “Pending Underwritten
Offering” means, with respect to any Holder forfeiting its rights pursuant to this Section 4.5(m),
any underwritten offering of Registrable Securities in which such Holder has advised the Company of
its intent to register its Registrable Securities either pursuant to Section 4.5(b)(ii) or
4.5(b)(iv) prior to the date of such Holder’s forfeiture.




28









 








          (n) Specific Performance. The parties hereto acknowledge that there would be no
adequate remedy at law if the Company fails to perform any of its obligations under this Section
4.5 and that the Investor and the Holders from time to time may be irreparably harmed by any such
failure, and accordingly agree that the Investor and such Holders, in addition to any other remedy
to which they may be entitled at law or in equity, to the fullest extent permitted and enforceable
under applicable law shall be entitled to compel specific performance of the obligations of the
Company under this Section 4.5 in accordance with the terms and conditions of this Section 4.5.




          (o) No Inconsistent Agreements. The Company shall not, on or after the Signing Date,
enter into any agreement with respect to its securities that may impair the rights granted to the
Investor and the Holders under this Section 4.5 or that otherwise conflicts with the provisions
hereof in any manner that may impair the rights granted to the Investor and the Holders under this
Section 4.5. In the event the Company has, prior to the Signing Date, entered into any agreement
with respect to its securities that is inconsistent with the rights granted to the Investor and the
Holders under this Section 4.5 (including agreements that are inconsistent with the order of
priority contemplated by Section 4.5(b)(vi)) or that may otherwise conflict with the provisions
hereof, the Company shall use its reasonable best efforts to amend such agreements to ensure they
are consistent with the provisions of this Section 4.5.




          (p) Certain Offerings by the Investor. In the case of any securities held by the
Investor that cease to be Registrable Securities solely by reason of clause (2) in the definition
of “Registrable Securities,” the provisions of Sections 4.5(b)(ii), clauses (iv), (ix) and
(x)-(xii) of Section 4.5(d), Section 4.5(h) and Section 4.5(j) shall continue to apply until such
securities otherwise cease to be Registrable Securities. In any such case, an “underwritten”
offering or other disposition shall include any distribution of such securities on behalf of the
Investor by one or more broker-dealers, an “underwriting agreement” shall include any purchase
agreement entered into by such broker-dealers, and any “registration statement” or “prospectus”
shall include any offering document approved by the Company and used in connection with such
distribution.




          (q) Registered Sales of the Warrant. The Holders agree to sell the Warrant or any
portion thereof under the Shelf Registration Statement only beginning 30 days after notifying the
Company of any such sale, during which 30-day period the Investor and all Holders of the Warrant
shall take reasonable steps to agree to revisions to the Warrant to permit a public distribution of
the Warrant, including entering into a warrant agreement and appointing a warrant agent.




     4.6 Depositary Shares. Upon request by the Investor at any time following the Closing Date, the Company shall
promptly enter into a depositary arrangement, pursuant to customary agreements reasonably
satisfactory to the Investor and with a depositary reasonably acceptable to the Investor, pursuant
to which the Preferred Shares or the Warrant Shares may be deposited and depositary shares, each
representing a fraction of a Preferred Share or Warrant Share, as applicable, as specified by the
Investor, may be issued. From and after the execution of any such depositary arrangement, and the
deposit of any Preferred Shares or Warrant Shares, as applicable, pursuant thereto, the depositary



29









 







shares issued pursuant thereto shall be deemed “Preferred Shares”, “Warrant Shares” and, as
applicable, “Registrable Securities” for purposes of this Agreement.



     4.7 Restriction on Dividends and Repurchases.



          (a) Prior to the earlier of (x) the third anniversary of the Closing Date and (y) the date on
which all of the Preferred Shares and Warrant Shares have been redeemed in whole or the Investor
has transferred all of the Preferred Shares and Warrant Shares to third parties which are not
Affiliates of the Investor, neither the Company nor any Company Subsidiary shall, without the
consent of the Investor, declare or pay any dividend or make any distribution on capital stock or
other equity securities of any kind of the Company or any Company Subsidiary (other than (i)
regular quarterly cash dividends of not more than the amount of the last quarterly cash dividend
per share declared or, if lower, announced to its holders of Common Stock an intention to declare,
on the Common Stock prior to November 17, 2008, as adjusted for any stock split, stock dividend,
reverse stock split, reclassification or similar transaction, (ii) dividends payable solely in
shares of Common Stock, (iii) regular dividends on shares of preferred stock in accordance with the
terms thereof and which are permitted under the terms of the Preferred Shares and the Warrant
Shares, (iv) dividends or distributions by any wholly-owned Company Subsidiary or (v) dividends or
distributions by any Company Subsidiary required pursuant to binding contractual agreements entered
into prior to November 17, 2008).




          (b) During the period beginning on the third anniversary of the Closing Date and ending on the
earlier of (i) the tenth anniversary of the Closing Date and (ii) the date on which all of the
Preferred Shares and Warrant Shares have been redeemed in whole or the Investor has transferred all
of the Preferred Shares and Warrant Shares to third parties which are not Affiliates of the
Investor, neither the Company nor any Company Subsidiary shall, without the consent of the
Investor, (A) pay any per share dividend or distribution on capital stock or other equity
securities of any kind of the Company at a per annum rate that is in excess of 103% of the
aggregate per share dividends and distributions for the immediately prior fiscal year (other than
regular dividends on shares of preferred stock in accordance with the terms thereof and which are
permitted under the terms of the Preferred Shares and the Warrant Shares); provided that no
increase in the aggregate amount of dividends or distributions on Common Stock shall be permitted
as a result of any dividends or distributions paid in shares of Common Stock, any stock split or
any similar transaction or (B) pay aggregate dividends or
distributions on capital stock or other equity securities of any kind of any Company
Subsidiary that is in excess of 103% of the aggregate dividends and distributions paid for the
immediately prior fiscal year (other than in the case of this clause (B), (1) regular dividends on
shares of preferred stock in accordance with the terms thereof and which are permitted under the
terms of the Preferred Shares and the Warrant Shares, (2) dividends or distributions by any
wholly-owned Company Subsidiary, (3) dividends or distributions by any Company Subsidiary required
pursuant to binding contractual agreements entered into prior to November 17, 2008) or (4)
dividends or distributions on newly issued shares of capital stock for cash or other property.




30









 








          (c) Prior to the earlier of (x) the tenth anniversary of the Closing Date and (y) the date on
which all of the Preferred Shares and Warrant Shares have been redeemed in whole or the Investor
has transferred all of the Preferred Shares and Warrant Shares to third parties which are not
Affiliates of the Investor, neither the Company nor any Company Subsidiary shall, without the
consent of the Investor, redeem, purchase or acquire any shares of Common Stock or other capital
stock or other equity securities of any kind of the Company or any Company Subsidiary, or any trust
preferred securities issued by the Company or any Affiliate of the Company, other than (i)
redemptions, purchases or other acquisitions of the Preferred Shares and Warrant Shares, (ii) in
connection with the administration of any employee benefit plan in the ordinary course of business
and consistent with past practice, (iii) the acquisition by the Company or any of the Company
Subsidiaries of record ownership in Junior Stock or Parity Stock for the beneficial ownership of
any other persons (other than the Company or any other Company Subsidiary), including as trustees
or custodians, (iv) the exchange or conversion of Junior Stock for or into other Junior Stock or of
Parity Stock or trust preferred securities for or into other Parity Stock (with the same or lesser
aggregate liquidation amount) or Junior Stock, in each case set forth in this clause (iv), solely
to the extent required pursuant to binding contractual agreements entered into prior to the Signing
Date or any subsequent agreement for the accelerated exercise, settlement or exchange thereof for
Common Stock (clauses (ii) and (iii), collectively, the “Permitted Repurchases”), (v) redemptions
of securities held by the Company or any wholly-owned Company Subsidiary or (vi) redemptions,
purchases or other acquisitions of capital stock or other equity securities of any kind of any
Company Subsidiary required pursuant to binding contractual agreements entered into prior to
November 17, 2008.




          (d) Until such time as the Investor ceases to own any Preferred Shares or Warrant Shares, the
Company shall not repurchase any Preferred Shares or Warrant Shares from any holder thereof,
whether by means of open market purchase, negotiated transaction, or otherwise, other than
Permitted Repurchases, unless it offers to repurchase a ratable portion of the Preferred Shares or
Warrant Shares, as the case may be, then held by the Investor on the same terms and conditions.




          (e) During the period beginning on the tenth anniversary of the Closing and ending on the date
on which all of the Preferred Shares and Warrant Shares have been redeemed in whole or the Investor
has transferred all of the Preferred Shares and Warrant Shares to third parties which are not
Affiliates of the Investor, neither the Company nor any Company Subsidiary shall, without the
consent of the Investor, (i)
declare or pay any dividend or make any distribution on capital stock or other equity
securities of any kind of the Company or any Company Subsidiary; or (ii) redeem, purchase or
acquire any shares of Common Stock or other capital stock or other equity securities of any kind of
the Company or any Company Subsidiary, or any trust preferred securities issued by the Company or
any Affiliate of the Company, other than (A) redemptions, purchases or other acquisitions of the
Preferred Shares and Warrant Shares, (B) regular dividends on shares of preferred stock in
accordance with the terms thereof and which are permitted under the terms of the Preferred Shares
and the Warrant Shares, or (C) dividends or distributions by any wholly-owned Company Subsidiary.




31









 








          (f) “Junior Stock” means Common Stock and any other class or series of stock of the Company
the terms of which expressly provide that it ranks junior to the Preferred Shares as to dividend
rights and/or as to rights on liquidation, dissolution or winding up of the Company. “Parity Stock”
means any class or series of stock of the Company the terms of which do not expressly provide that
such class or series will rank senior or junior to the Preferred Shares as to dividend rights
and/or as to rights on liquidation, dissolution or winding up of the Company (in each case without
regard to whether dividends accrue cumulatively or non-cumulatively).




     4.8 Executive Compensation. Until such time as the Investor ceases to own any debt or equity securities of the Company
acquired pursuant to this Agreement or the Warrant, the Company shall take all necessary action to
ensure that its Benefit Plans with respect to its Senior Executive Officers comply in all respects
with Section 111(b) of the EESA as implemented by any guidance or regulation thereunder that has
been issued and is in effect as of the Closing Date, and shall not adopt any new Benefit Plan with
respect to its Senior Executive Officers that does not comply therewith. “Senior Executive
Officers” means the Company’s “senior executive officers” as defined in subsection 111(b)(3) of the
EESA and regulations issued thereunder, including the rules set forth in 31 C.F.K. Part 30.



     4.9 Related Party Transactions. Until such time as the Investor ceases to own any Purchased Securities or Warrant Shares,
the Company and the Company Subsidiaries shall not enter into transactions with Affiliates or
related persons (within the meaning of Item 404 under the SEC’s Regulation S-K) unless (i) such
transactions are on terms no less favorable to the Company and the Company Subsidiaries than could
be obtained from an unaffiliated third party, and (ii) have been approved by the audit committee of
the Board of Directors or comparable body of independent directors of the Company.



     4.10 Bank and Thrift Holding Company Status. If the Company is a Bank Holding Company or a Savings and Loan Holding Company on the
Signing Date, then the Company shall maintain its status as a Bank Holding Company or Savings and
Loan Holding Company, as the case may be, for as long as the Investor owns any Purchased Securities
or Warrant Shares. The Company
shall redeem all Purchased Securities and Warrant Shares held by the Investor prior to
terminating its status as a Bank Holding Company or Savings and Loan Holding Company, as
applicable. “Bank Holding Company” means a company registered as such with the Board of Governors
of the Federal Reserve System (the “Federal Reserve”) pursuant to 12 U.S.C. § 1842 and the
regulations of the Federal Reserve promulgated thereunder. “Savings and Loan Holding Company” means
a company registered as such with the Office of Thrift Supervision pursuant to 12 U.S.C. § 1467(a)
and the regulations of the Office of Thrift Supervision promulgated thereunder.



     4.11 Predominantly Financial. For as long as the Investor owns any Purchased Securities or Warrant Shares, the Company, to
the extent it is not itself an insured depository institution, agrees to remain predominantly
engaged in financial activities. A company is predominantly engaged in financial activities if the
annual gross revenues derived by the company and all subsidiaries of the company (excluding
revenues derived



32









 







from subsidiary depository institutions), on a consolidated basis, from engaging
in activities that are financial in nature or are incidental to a financial activity under
subsection (k) of Section 4 of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)) represent
at least 85 percent of the consolidated annual gross revenues of the company.



Article V

Miscellaneous




     5.1 Termination. This Agreement may be terminated at any time prior to the Closing:



          (a) by either the Investor or the Company if the Closing shall not have occurred by the 30th
calendar day following the Signing Date; provided, however, that in the event the Closing has not
occurred by such 30th calendar day, the parties will consult in good faith to determine whether to
extend the term of this Agreement, it being understood that the parties shall be required to
consult only until the fifth day after such 30th calendar day and not be under any obligation to
extend the term of this Agreement thereafter; provided, further, that the right to terminate this
Agreement under this Section 5.1(a) shall not be available to any party whose breach of any
representation or warranty or failure to perform any obligation under this Agreement shall have
caused or resulted in the failure of the Closing to occur on or prior to such date; or




          (b) by either the Investor or the Company in the event that any Governmental Entity shall have
issued an order, decree or ruling or taken any other action restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement and such order, decree, ruling or other
action shall have become final and nonappealable; or




          (c) by the mutual written consent of the Investor and the Company.




In the event of termination of this Agreement as provided in this Section 5.1, this Agreement shall
forthwith become void and there shall be no liability on the part of either party hereto except
that nothing herein shall relieve either party from liability for any breach of this Agreement.



     5.2 Survival of Representations and Warranties. All covenants and agreements, other than those which by their terms apply in whole or in
part after the Closing, shall terminate as of the Closing. The representations and warranties of
the Company made herein or in any certificates delivered in connection with the Closing shall
survive the Closing without limitation.



     5.3 Amendment. No amendment of any provision of this Agreement will be effective unless made in writing and
signed by an officer or a duly authorized representative of each party; provided that the Investor
may unilaterally amend any provision of this Agreement to the extent required to comply with any
changes after the Signing Date in applicable federal statutes. No failure or delay by any party in
exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any



33









 







single or partial exercise thereof preclude any other or further exercise of any other right, power
or privilege. The rights and remedies herein provided shall be cumulative of any rights or remedies
provided by law.



     5.4 Waiver of Conditions. The conditions to each party’s obligation to consummate the Purchase are for the sole
benefit of such party and may be waived by such party in whole or in part to the extent permitted
by applicable law. No waiver will be effective unless it is in a writing signed by a duly
authorized officer of the waiving party that makes express reference to the provision or provisions
subject to such waiver.



     5.5 Governing Law: Submission to Jurisdiction, Etc. This Agreement will be governed by and construed 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 jurisdiction and venue of
the United States District Court for 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 Warrant or the transactions contemplated hereby or thereby, and (b) that
notice may be served upon (i) the Company at the address and in the manner set forth for notices to
the Company in Section 5.6 and (ii) the Investor in accordance with federal law. 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 Warrant or the
transactions contemplated hereby or thereby.



     5.6 Notices. Any notice, request, instruction or other document to be given hereunder by any party to the
other will be in writing and will be deemed to have been duly given (a) on the date of delivery if
delivered personally, or by facsimile, upon confirmation of receipt, or (b) on the second business
day following the date of dispatch if delivered by a recognized next day courier service. All
notices to the Company shall be delivered as set forth in Schedule A, or pursuant to such
other instruction as may be designated in writing by the Company to the Investor. All notices to
the Investor shall be delivered as set forth below, or pursuant to such other instructions as may
be designated in writing by the Investor to the Company.


If to the Investor:




United States Department of the Treasury

1500 Pennsylvania Avenue, NW, Room 2312

Washington, D.C. 20220

Attention: Assistant General Counsel (Banking and Finance)

Facsimile: (202) 622-1974




     5.7 Definitions



34









 





          (a) When a reference is made in this Agreement to a subsidiary of a person, the term
“subsidiary” means any corporation, partnership, joint venture, limited liability company or other
entity (x) of which such person or a subsidiary of such person is a general partner or (y) of which
a majority of the voting securities or other voting interests, or 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.




          (b) The term “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.




          (c) The terms “knowledge of the Company” or “Company’s knowledge” mean the actual knowledge
after reasonable and due inquiry of the “officers” (as such term is defined in Rule 3b-2 under the
Exchange Act, but excluding any Vice President or Secretary) of the Company.




     5.8 Assignment. Neither this Agreement nor any right, remedy, obligation nor 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 void, except (a) an assignment, in the case of a merger, consolidation,
statutory share exchange or similar transaction that requires the approval of the Company’s
stockholders (a “Business Combination”) where such party is not the surviving entity, or a sale of
substantially all of its assets, to the entity which is the survivor of such Business Combination
or the purchaser in such sale and (b) as provided in Sections 3.5 and 4.5.



     5.9 Severability. If any provision of this Agreement or the Warrant, or the application thereof to any person
or circumstance, is determined by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions hereof, or the application of such provision to persons or
circumstances other than those as to which it has been held invalid or unenforceable, will remain
in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long
as the economic or legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon 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.



     5.10 No Third Party Beneficiaries. Nothing contained in this Agreement, expressed or implied, is intended to confer upon any
person or entity other than the Company and the Investor any benefit, right or remedies, except
that the provisions of Section 4.5 shall inure to the benefit of the persons referred to in that
Section.





35









 




* * *



36








 








ANNEX A




FORM OF CERTIFICATE OF DESIGNATIONS FOR PREFERRED STOCK




[SEE ATTACHED]

















 





ANNEX A




ARTICLES OF AMENDMENT TO THE

AMENDED AND RESTATED CHARTER




OF




COMMUNITY FIRST, INC.




     In accordance with the provisions of Sections 48-16-102 and 48-20-106 of the Tennessee
Business Corporation Act, the undersigned corporation adopts the following Articles of Amendment
(the “Articles of Amendment”) to its Amended and Restated Charter (the “Charter”):



     1. The name of the Corporation is Community First, Inc.



     2. Article 6 of the Charter is amended by adding the following new subsection (c) to Article 6
stating the number, designation, relative rights, preferences and limitations of a new series of
preferred stock as fixed by the board of directors, which section shall read in its entirety as
follows:



     “(c) Fixed Rate Cumulative Perpetual Preferred Stock, Series A



     Part 1. Designation and Number of Shares. There is hereby created out of the
authorized and unissued shares of preferred stock of the Issuer a series of preferred stock
designated as the “Fixed Rate Cumulative Perpetual Preferred Stock, Series A” (the “Designated
Preferred Stock”). The authorized number of shares of Designated Preferred Stock shall be
17,806.



     Part 2. Standard Provisions. The Standard Provisions contained in Schedule A attached
hereto are incorporated herein by reference in their entirety and shall be deemed to be a part of
these Articles of Amendment to the same extent as if such provisions had been set forth in full
herein.



     Part. 3. Definitions. The following terms are used in these Articles of Amendment
(including the Standard Provisions in Schedule A hereto) as defined below:



     (a) “Common Stock” means the common stock, no par value per share, of the Issuer.



     (b) “Dividend Payment Date” means February 15, May 15, August 15 and November 15 of
each year.



     (c) “Junior Stock” means the Common Stock and any other class or series of stock of
the Issuer the terms of which expressly provide that it ranks junior to Designated



1









 







Preferred Stock as to dividend rights and/or as to rights on liquidation, dissolution or winding up
of the Issuer.



     (d) “Liquidation Amount” means $1,000 per share of Designated Preferred Stock.



     (e) “Minimum Amount” means $4,451,500.



     (f) “Parity Stock” means any class or series of stock of the Issuer (other than
Designated Preferred Stock) the terms of which do not expressly provide that such class or series
will rank senior or junior to Designated Preferred Stock as to dividend rights and/or as to rights
on liquidation, dissolution or winding up of the Issuer (in each case without regard to whether
dividends accrue cumulatively or non-cumulatively).



     (g) “Signing Date” means the Original Issue Date.



     Part. 4. Certain Voting Matters. Holders of shares of Designated Preferred Stock will
be entitled to one vote for each such share on any matter on which holders of Designated Preferred
Stock are entitled to vote, including any action by written consent.



     3. Except as amended by these Articles of Amendment, the Charter of the Corporation shall
remain in full force and effect.



     4. These Articles of Amendment were duly adopted by the Board of Directors of the Corporation
on February 17, 2009 without shareholder approval as no such approval was required.



     5. These Articles of Amendment of the Charter of the Corporation will be effective as of 8:00
a.m. Central Standard Time on February 27, 2009.



Date: February 26, 2009




	 	 	 	 	 
	 	COMMUNITY FIRST, INC.

 	 
	 	
 	 
	 	Name:  	Marc R. Lively 	 
	 	Title:  	President and Chief Executive Officer 	 



2









 






	 	 	 	 	 



Schedule A




STANDARD PROVISIONS





     Section 1. General Matters. Each share of Designated Preferred Stock shall be
identical in all respects to every other share of Designated Preferred Stock. The Designated
Preferred Stock shall be perpetual, subject to the provisions of Section 5 of these Standard
Provisions that form a part of the Certificate of Designations. The Designated Preferred Stock
shall rank equally with Parity Stock and shall rank senior to Junior Stock with respect to the
payment of dividends and the distribution of assets in the event of any dissolution, liquidation or
winding up of the Issuer.



     Section 2. Standard Definitions. As used herein with respect to Designated Preferred
Stock:



     (a) “Applicable Dividend Rate” means (i) during the period from the Original Issue
Date to, but excluding, the first day of the first Dividend Period commencing on or after the fifth
anniversary of the Original Issue Date, 5% per annum and (ii) from and after the first day of the
first Dividend Period commencing on or after the fifth anniversary of the Original Issue Date, 9%
per annum.



     (b) “Appropriate Federal Banking Agency” means the “appropriate Federal banking
agency” with respect to the Issuer as defined in Section 3(q) of the Federal Deposit Insurance Act
(12 U.S.C. Section 1813(q)), or any successor provision.



     (c) “Articles of Amendment” means the Articles of Amendment filed with the Secretary
of State of the State of Tennessee by Community First, Inc. creating the Designated Preferred
Stock.



     (d) “Business Combination” means a merger, consolidation, statutory share exchange or
similar transaction that requires the approval of the Issuer’s stockholders.



     (e) “Business Day” means any day except Saturday, Sunday and any day on which banking
institutions in the State of New York generally are authorized or required by law or other
governmental actions to close.



     (f) “Bylaws” means the bylaws of the Issuer, as they may be amended from time to time.



     (g) “Certificate of Designations” means the Articles of Amendment, of which these
Standard Provisions form a part, as it may be amended from time to time.



     (h) “Charter” means the Issuer’s certificate or articles of incorporation, articles of
association, or similar organizational document.



A-1









 





     (i) “Dividend
Period” has the meaning set forth in Section 3(a).


     (j)
“Dividend Record Date” has the meaning set forth in Section 3(a).



     (k) “Liquidation
Preference” has the meaning set forth in Section 4(a).



     (l) “Original Issue Date” means the date on which shares of Designated Preferred Stock
are first issued.



     (m) “Preferred Director” has the meaning set forth in Section 7(b).



     (n) “Preferred Stock” means any and all series of preferred stock of the Issuer,
including the Designated Preferred Stock.



     (o) “Qualified Equity Offering” means the sale and issuance for cash by the Issuer to
persons other than the Issuer or any of its subsidiaries after the Original Issue Date of shares of
perpetual Preferred Stock, Common Stock or any combination of such stock, that, in each case,
qualify as and may be included in Tier 1 capital of the Issuer at the time of issuance under the
applicable risk-based capital guidelines of the Issuer’s Appropriate Federal Banking Agency (other
than any such sales and issuances made pursuant to agreements or arrangements entered into, or
pursuant to financing plans which were publicly announced, on or prior to November 17, 2008).



     (p) “Standard Provisions” mean these Standard Provisions that form a part of the
Certificate of Designations relating to the Designated Preferred Stock.



     (q) “Successor Preferred Stock” has the meaning set forth in Section 5(a).



     (r) “Voting Parity Stock” means, with regard to any matter as to which the holders of
Designated Preferred Stock are entitled to vote as specified in Sections 7(a) and 7(b) of these
Standard Provisions that form a part of the Certificate of Designations, any and all series of
Parity Stock upon which like voting rights have been conferred and are exercisable with respect to
such matter.



     Section 3. Dividends.




     (a) Rate. Holders of Designated Preferred Stock shall be entitled to receive, on each
share of Designated Preferred Stock if, as and when declared by the Board of Directors or any duly
authorized committee of the Board of Directors, but only out of assets legally available therefor,
cumulative cash dividends with respect to each Dividend Period (as defined below) at a rate per
annum equal to the Applicable Dividend Rate on (i) the Liquidation Amount per share of Designated
Preferred Stock and (ii) the amount of accrued and unpaid dividends for any prior Dividend Period
on such share of Designated Preferred Stock, if any. Such dividends shall begin to accrue and be
cumulative from the Original Issue Date, shall compound on each subsequent Dividend Payment Date
(i.e., no dividends shall accrue on other dividends unless and until the first



A-2









 







Dividend Payment Date for such other dividends has passed without such other dividends having been
paid on such date) and shall be payable quarterly in arrears on each Dividend Payment Date,
commencing with the first such Dividend Payment Date to occur at least 20 calendar days after the
Original Issue Date. In the event that any Dividend Payment Date would otherwise fall on a day that
is not a Business Day, the dividend payment due on that date will be postponed to the next day that
is a Business Day and no additional dividends will accrue as a result of that postponement. The
period from and including any Dividend Payment Date to, but excluding, the next Dividend Payment
Date is a “Dividend Period”, provided that the initial Dividend Period shall be the period
from and including the Original Issue Date to, but excluding, the next Dividend Payment Date.



     Dividends that are payable on Designated Preferred Stock in respect of any Dividend Period
shall be computed on the basis of a 360-day year consisting of twelve 30-day months. The amount of
dividends payable on Designated Preferred Stock on any date prior to the end of a Dividend Period,
and for the initial Dividend Period, shall be computed on the basis of a 360-day year consisting of
twelve 30-day months, and actual days elapsed over a 30-day month.



     Dividends that are payable on Designated Preferred Stock on any Dividend Payment Date will be
payable to holders of record of Designated Preferred Stock as they appear on the stock register of
the Issuer on the applicable record date, which shall be the 15th calendar day immediately
preceding such Dividend Payment Date or such other record date fixed by the Board of Directors or
any duly authorized committee of the Board of Directors that is not more than 60 nor less than 10
days prior to such Dividend Payment Date (each, a “Dividend Record Date”). Any such day
that is a Dividend Record Date shall be a Dividend Record Date whether or not such day is a
Business Day.



     Holders of Designated Preferred Stock shall not be entitled to any dividends, whether payable
in cash, securities or other property, other than dividends (if any) declared and payable on
Designated Preferred Stock as specified in this Section 3 (subject to the other provisions of the
Certificate of Designations).



     (b) Priority of Dividends. So long as any share of Designated Preferred Stock remains
outstanding, no dividend or distribution shall be declared or paid on the Common Stock or any other
shares of Junior Stock (other than dividends payable solely in shares of Common Stock) or Parity
Stock, subject to the immediately following paragraph in the case of 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 Issuer or any of its subsidiaries unless all accrued
and unpaid dividends for all past Dividend Periods, including the latest completed Dividend Period
(including, if applicable as provided in Section 3(a) above, dividends on such amount), on all
outstanding shares of Designated Preferred Stock have been or are contemporaneously 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 Designated Preferred Stock on the applicable record
date). The foregoing limitation shall not apply to (i) redemptions, purchases or other acquisitions
of shares of Common Stock or other Junior



A-3









 







Stock in connection with the administration of any employee benefit plan in the ordinary course of
business and consistent with past practice; (ii) the acquisition by the Issuer or any of its
subsidiaries of record ownership in Junior Stock or Parity Stock for the beneficial ownership of
any other persons (other than the Issuer or any of its subsidiaries), including as trustees or
custodians; and (iii) the exchange or conversion of Junior Stock for or into other Junior Stock or
of Parity Stock for or into other Parity Stock (with the same or lesser aggregate liquidation
amount) or Junior Stock, in each case, solely to the extent required pursuant to binding
contractual agreements entered into prior to the Signing Date or any subsequent agreement for the
accelerated exercise, settlement or exchange thereof for Common Stock.



     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 Designated Preferred Stock and any shares of Parity Stock, all dividends
declared on Designated 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 all accrued and unpaid dividends per
share on the shares of Designated Preferred Stock (including, if applicable as provided in Section
3(a) above, dividends on such amount) 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 their having been declared by the Board of Directors or a duly authorized
committee of 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 or a duly authorized committee of the Board of Directors determines not
to pay any dividend or a full dividend on a Dividend Payment Date, the Issuer will provide written
notice to the holders of Designated Preferred Stock prior to such Dividend Payment Date.



     Subject to the foregoing, and not otherwise, such dividends (payable in cash, securities or
other property) as may be determined by the Board of Directors or any duly authorized committee of
the Board of Directors may be declared and paid on any securities, including Common Stock and other
Junior Stock, from time to time out of any funds legally available for such payment, and holders of
Designated Preferred Stock shall not be entitled to participate in any such dividends.



     Section 4. Liquidation Rights.




     (a) Voluntary or Involuntary Liquidation. In the event of any liquidation, dissolution
or winding up of the affairs of the Issuer, whether voluntary or involuntary,



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holders of Designated Preferred Stock shall be entitled to receive for each share of Designated
Preferred Stock, out of the assets of the Issuer or proceeds thereof (whether capital or surplus)
available for distribution to stockholders of the Issuer, subject to the rights of any creditors of
the Issuer, before any distribution of such assets or proceeds is made to or set aside for the
holders of Common Stock and any other stock of the Issuer ranking junior to Designated Preferred
Stock as to such distribution, payment in full in an amount equal to the sum of (i) the Liquidation
Amount per share and (ii) the amount of any accrued and unpaid dividends (including, if applicable
as provided in Section 3(a) above, dividends on such amount), whether or not declared, to the date
of payment (such amounts collectively, the “Liquidation Preference”).



     (b) Partial Payment. If in any distribution described in Section 4(a) above the assets
of the Issuer or proceeds thereof are not sufficient to pay in full the amounts payable with
respect to all outstanding shares of Designated Preferred Stock and the corresponding amounts
payable with respect of any other stock of the Issuer ranking equally with Designated Preferred
Stock as to such distribution, holders of Designated Preferred Stock and the holders of such other
stock shall share ratably in any such distribution in proportion to the full respective
distributions to which they are entitled.



     (c) Residual Distributions. If the Liquidation Preference has been paid in full to all
holders of Designated Preferred Stock and the corresponding amounts payable with respect of any
other stock of the Issuer ranking equally with Designated Preferred Stock as to such distribution
has been paid in full, the holders of other stock of the Issuer shall be entitled to receive all
remaining assets of the Issuer (or proceeds thereof) according to their respective rights and
preferences.



     (d) Merger. Consolidation and Sale of Assets Not Liquidation. For purposes of this
Section 4, the merger or consolidation of the Issuer with any other corporation or other entity,
including a merger or consolidation in which the holders of Designated Preferred Stock receive
cash, securities or other property for their shares, or the sale, lease or exchange (for cash,
securities or other property) of all or substantially all of the assets of the Issuer, shall not
constitute a liquidation, dissolution or winding up of the Issuer.



     Section 5. Redemption.




     (a) Optional Redemption. Except as provided below, the Designated Preferred Stock may
not be redeemed prior to the first Dividend Payment Date falling on or after the third anniversary
of the Original Issue Date. On or after the first Dividend Payment Date falling on or after the
third anniversary of the Original Issue Date, the Issuer, at its option, subject to the approval of
the Appropriate Federal Banking Agency, may redeem, in whole or in part, at any time and from time
to time, out of funds legally available therefor, the shares of Designated Preferred Stock at the
time outstanding, upon notice given as provided in Section 5(c) below, at a redemption price equal
to the sum of (i) the Liquidation Amount per share and (ii) except as otherwise provided below, any
accrued and unpaid dividends (including, if applicable as provided in Section 3(a) above,



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dividends on such amount) (regardless of whether any dividends are actually declared) to, but
excluding, the date fixed for redemption.



     Notwithstanding the foregoing, prior to the first Dividend Payment Date falling on or after
the third anniversary of the Original Issue Date, the Issuer, at its option, subject to the
approval of the Appropriate Federal Banking Agency, may redeem, in whole or in part, at any time
and from time to time, the shares of Designated Preferred Stock at the time outstanding, upon
notice given as provided in Section 5(c) below, at a redemption price equal to the sum of (i) the
Liquidation Amount per share and (ii) except as otherwise provided below, any accrued and unpaid
dividends (including, if applicable as provided in Section 3(a) above, dividends on such amount)
(regardless of whether any dividends are actually declared) to, but excluding, the date fixed for
redemption; provided that (x) the Issuer (or any successor by Business Combination) has received
aggregate gross proceeds of not less than the Minimum Amount (plus the “Minimum Amount” as defined
in the relevant certificate of designations for each other outstanding series of preferred stock of
such successor that was originally issued to the United States Department of the Treasury (the
“Successor Preferred Stock”) in connection with the Troubled Asset Relief Program Capital
Purchase Program) from one or more Qualified Equity Offerings (including Qualified Equity Offerings
of such successor), and (y) the aggregate redemption price of the Designated Preferred Stock (and
any Successor Preferred Stock) redeemed pursuant to this paragraph may not exceed the aggregate net
cash proceeds received by the Issuer (or any successor by Business Combination) from such Qualified
Equity Offerings (including Qualified Equity Offerings of such successor).



     The redemption price for any shares of Designated Preferred Stock shall be payable on the
redemption date to the holder of such shares against surrender of the certificate(s) evidencing
such shares to the Issuer or its agent. Any declared but unpaid dividends payable on a redemption
date that occurs subsequent to the Dividend Record Date for a Dividend Period shall not be paid to
the holder entitled to receive the redemption price on the redemption date, but rather shall be
paid to the holder of record of the redeemed shares on such Dividend Record Date relating to the
Dividend Payment Date as provided in Section 3 above.



     (b) No Sinking Fund. The Designated Preferred Stock will not be subject to any
mandatory redemption, sinking fund or other similar provisions. Holders of Designated Preferred
Stock will have no right to require redemption or repurchase of any shares of Designated Preferred
Stock.



     (c) Notice of Redemption. Notice of every redemption of shares of Designated Preferred
Stock shall be given by first class mail, postage prepaid, addressed to the holders of record of
the shares to be redeemed at their respective last addresses appearing on the books of the Issuer.
Such mailing shall be at least 30 days and not more than 60 days before the date fixed for
redemption. Any notice mailed as provided in this Subsection shall be conclusively presumed to have
been duly given, whether or not the holder receives such notice, but failure duly to give such
notice by mail, or any defect in



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such notice or in the mailing thereof, to any holder of shares of Designated Preferred Stock
designated for redemption shall not affect the validity of the proceedings for the redemption of
any other shares of Designated Preferred Stock. Notwithstanding the foregoing, if shares of
Designated Preferred Stock are issued in book-entry form through The Depository Trust Company or
any other similar facility, notice of redemption may be given to the holders of Designated
Preferred Stock at such time and in any manner permitted by such facility. Each notice of
redemption given to a holder shall state: (1) the redemption date; (2) the number of shares of
Designated Preferred Stock to be redeemed and, if less than all the shares held by such holder are
to be redeemed, the number of such shares to be redeemed from such holder; (3) the redemption
price; and (4) the place or places where certificates for such shares are to be surrendered for
payment of the redemption price.



     (d) Partial Redemption. In case of any redemption of part of the shares of Designated
Preferred Stock at the time outstanding, the shares to be redeemed shall be selected either pro
rata or in such other manner as the Board of Directors or a duly authorized committee thereof may
determine to be fair and equitable. Subject to the provisions hereof, the Board of Directors or a
duly authorized committee thereof shall have full power and authority to prescribe the terms and
conditions upon which shares of Designated Preferred Stock shall be redeemed from time to time. If
fewer than all the shares represented by any certificate are redeemed, a new certificate shall be
issued representing the unredeemed shares without charge to the holder thereof.



     (e) Effectiveness of Redemption. If notice of redemption has been duly given and if on
or before the redemption date specified in the notice all funds necessary for the redemption have
been deposited by the Issuer, in trust for the pro rata benefit of the holders of the shares called
for redemption, with a bank or trust company doing business in the Borough of Manhattan, The City
of New York, and having a capital and surplus of at least $500 million and selected by the Board of
Directors, so as to be and continue to be available solely therefor, then, notwithstanding that any
certificate for any share so called for redemption has not been surrendered for cancellation, on
and after the redemption date dividends shall cease to accrue on all shares so called for
redemption, all shares so called for redemption shall no longer be deemed outstanding and all
rights with respect to such shares shall forthwith on such redemption date cease and terminate,
except only the right of the holders thereof to receive the amount payable on such redemption from
such bank or trust company, without interest. Any funds unclaimed at the end of three years from
the redemption date shall, to the extent permitted by law, be released to the Issuer, after which
time the holders of the shares so called for redemption shall look only to the Issuer for payment
of the redemption price of such shares.



     (f) Status of Redeemed Shares. Shares of Designated Preferred Stock that are redeemed,
repurchased or otherwise acquired by the Issuer shall revert to authorized but unissued shares of
Preferred Stock (provided that any such cancelled shares of Designated Preferred Stock may be
reissued only as shares of any series of Preferred Stock other than Designated Preferred Stock).



A-7









 





     Section 6. Conversion. Holders of Designated Preferred Stock shares shall have no right to
exchange or convert such shares into any other securities.



     Section 7. Voting Rights.




     (a) General. The holders of Designated Preferred Stock shall not have any voting
rights except as set forth below or as otherwise from time to time required by law.



     (b) Preferred Stock Directors. Whenever, at any time or times, dividends payable on
the shares of Designated Preferred Stock have not been paid for an aggregate of six quarterly
Dividend Periods or more, whether or not consecutive, the authorized number of directors of the
Issuer shall automatically be increased by two and the holders of the Designated Preferred Stock
shall have the right, with holders of shares of any one or more other classes or series of Voting
Parity Stock outstanding at the time, voting together as a class, to elect two directors
(hereinafter the “Preferred Directors” and each a “Preferred Director”) to fill
such newly created directorships at the Issuer’s next annual meeting of stockholders (or at a
special meeting called for that purpose prior to such next annual meeting) and at each subsequent
annual meeting of stockholders until all accrued and unpaid dividends for all past Dividend
Periods, including the latest completed Dividend Period (including, if applicable as provided in
Section 3(a) above, dividends on such amount), on all outstanding shares of Designated Preferred
Stock have been declared and paid in full at which time such right shall terminate with respect to
the Designated Preferred Stock, except as herein or by law expressly provided, subject to revesting
in the event of each and every subsequent default of the character above mentioned; provided that
it shall be a qualification for election for any Preferred Director that the election of such
Preferred Director shall not cause the Issuer to violate any corporate governance requirements of
any securities exchange or other trading facility on which securities of the Issuer may then be
listed or traded that listed or traded companies must have a majority of independent directors.
Upon any termination of the right of the holders of shares of Designated Preferred Stock and Voting
Parity Stock as a class to vote for directors as provided above, the Preferred Directors shall
cease to be qualified as directors, the term of office of all Preferred Directors then in office
shall terminate immediately and the authorized number of directors shall be reduced by the number
of Preferred Directors elected pursuant hereto. Any Preferred Director may be removed at any time,
with or without cause, and any vacancy created thereby may be filled, only by the affirmative vote
of the holders a majority of the shares of Designated Preferred Stock at the time outstanding
voting separately as a class together with the holders of shares of Voting Parity Stock, to the
extent the voting rights of such holders described above are then exercisable. If the office of any
Preferred Director becomes vacant for any reason other than removal from office as aforesaid, the
remaining Preferred Director may choose a successor who shall hold office for the unexpired term in
respect of which such vacancy occurred.



     (c) Class Voting Rights as to Particular Matters. So long as any shares of Designated
Preferred Stock are outstanding, in addition to any other vote or consent of stockholders required
by law or by the Charter, the vote or consent of the holders of at



A-8









 







least 66 2/3% of the shares of Designated Preferred Stock at the time outstanding, voting as a
separate class, given in person or by proxy, either in writing without a meeting or 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
Certificate of Designations for the Designated Preferred Stock or the Charter 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 Issuer ranking senior to Designated 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 Issuer;




     (ii) Amendment of Designated Preferred Stock. Any amendment, alteration or
repeal of any provision of the Certificate of Designations for the Designated Preferred
Stock or the Charter (including, unless no vote on such merger or consolidation is required
by Section 7(c)(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 the Designated Preferred Stock; or




     (iii) Share Exchanges, Reclassifications, Mergers and Consolidations. Any
consummation of a binding share exchange or reclassification involving the Designated
Preferred Stock, or of a merger or consolidation of the Issuer with another corporation or
other entity, unless in each case (x) the shares of Designated Preferred Stock remain
outstanding or, in the case of any such merger or consolidation with respect to which the
Issuer is not the surviving or resulting entity, are converted into or exchanged for
preference securities of the surviving or resulting entity or its ultimate parent, and (y)
such shares remaining outstanding or such preference securities, as the case may be, have
such rights, preferences, privileges and voting powers, and limitations and restrictions
thereof, taken as a whole, as are not materially less favorable to the holders thereof than
the rights, preferences, privileges and voting powers, and limitations and restrictions
thereof, of Designated Preferred Stock immediately prior to such consummation, taken as a
whole;


provided, however, that for all purposes of this Section 7(c), any increase in the amount of the
authorized Preferred Stock, including any increase in the authorized amount of Designated Preferred
Stock necessary to satisfy preemptive or similar rights granted by the Issuer to other persons
prior to the Signing Date, or 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 Designated Preferred Stock with
respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and
the distribution of assets upon liquidation, dissolution or winding up of the Issuer will not be


A-9









 






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 Designated
Preferred Stock.




     (d) Changes after Provision for Redemption. No vote or consent of the holders of
Designated Preferred Stock shall be required pursuant to Section 7(c) above if, at or prior to the
time when any such vote or consent would otherwise be required pursuant to such Section, all
outstanding shares of the Designated Preferred Stock shall have been redeemed, or shall have been
called for redemption upon proper notice and sufficient funds shall have been deposited in trust
for such redemption, in each case pursuant to Section 5 above.



     (e) Procedures for Voting and Consents. The rules and procedures for calling and
conducting any meeting of the holders of Designated 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 or any duly
authorized committee 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 Charter, the Bylaws, and
applicable law and the rules of any national securities exchange or other trading facility on which
Designated Preferred Stock is listed or traded at the time.



     Section 8. Record Holders. To the fullest extent permitted by applicable law, the
Issuer and the transfer agent for Designated Preferred Stock may deem and treat the record holder
of any share of Designated Preferred Stock as the true and lawful owner thereof for all purposes,
and neither the Issuer nor such transfer agent shall be affected by any notice to the contrary.



     Section 9. Notices. All notices or communications in respect of Designated Preferred
Stock shall be sufficiently given if given in writing and delivered in person or by first class
mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of
Designations, in the Charter or Bylaws or by applicable law. Notwithstanding the foregoing, if
shares of Designated Preferred Stock are issued in book-entry form through The Depository Trust
Company or any similar facility, such notices may be given to the holders of Designated Preferred
Stock in any manner permitted by such facility.



     Section 10. No Preemptive Rights. No share of Designated Preferred Stock shall have
any rights of preemption whatsoever as to any securities of the Issuer, 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.



     Section 11. Replacement Certificates. The Issuer shall replace any mutilated
certificate at the holder’s expense upon surrender of that certificate to the Issuer. The Issuer
shall replace certificates that become destroyed, stolen or lost at the holder’s



A-10









 







expense upon delivery to the Issuer of reasonably satisfactory evidence that the certificate
has been destroyed, stolen or lost, together with any indemnity that may be reasonably required by
the Issuer.



     Section 12. Other Rights. The shares of Designated 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 Charter or as provided by applicable law.




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ANNEX B




FORM OF CERTIFICATE OF DESIGNATIONS

FOR WARRANT PREFERRED STOCK




[SEE ATTACHED]




 









 





ANNEX B




ARTICLES OF AMENDMENT TO THE

AMENDED AND RESTATED CHARTER




OF




COMMUNITY FIRST, INC.




     In accordance with the provisions of Sections 48-16-102 and 48-20-106 of the Tennessee
Business Corporation Act, the undersigned corporation adopts the following Articles of Amendment
(the “Articles of Amendment”) to its Amended and Restated Charter (the “Charter”):



     1. The name of the Corporation is Community First, Inc.



     2. Article 6 of the Charter is amended by adding the following new subsection (d) to Article 6
stating the number, designation, relative rights, preferences and limitations of a new series of
preferred stock as fixed by the board of directors, which section shall read in its entirety as
follows:



     “(d) Fixed Rate Cumulative Perpetual Preferred Stock, Series B



     Part 1. Designation and Number of Shares. There is hereby created out of the
authorized and unissued shares of preferred stock of the Issuer a series of preferred stock
designated as the “Fixed Rate Cumulative Perpetual Preferred Stock, Series B” (the “Designated
Preferred Stock”). The authorized number of shares of Designated Preferred Stock shall be 891.



     Part 2. Standard Provisions. The Standard Provisions contained in Schedule A attached
hereto are incorporated herein by reference in their entirety and shall be deemed to be a part of
these Articles of Amendment to the same extent as if such provisions had been set forth in full
herein.



     Part. 3. Definitions. The following terms are used in these Articles of Amendment
(including the Standard Provisions in Schedule A hereto) as defined below:



     (a) “Common Stock” means the common stock, no par value per share, of the Issuer.



     (b) “Dividend Payment Date” means February 15, May 15, August 15 and November 15 of
each year.



     (c) “Junior Stock” means the Common Stock and any other class or series of stock of
the Issuer the terms of which expressly provide that it ranks junior to Designated



1









 







Preferred Stock as to dividend rights and/or as to rights on liquidation, dissolution or winding up of the Issuer.



     (d) “Liquidation Amount” means $1,000 per share of Designated Preferred Stock.



     (e) “Minimum Amount” means $222,500.



     (f) “Parity Stock” means any class or series of stock of the Issuer (other than
Designated Preferred Stock) the terms of which do not expressly provide that such class or series
will rank senior or junior to Designated Preferred Stock as to dividend rights and/or as to rights
on liquidation, dissolution or winding up of the Issuer (in each case without regard to whether
dividends accrue cumulatively or non-cumulatively). Without limiting the foregoing, Parity Stock
shall include the Issuer’s UST Preferred Stock.



     (g) “Signing Date” means the Original Issue Date.



     (h) “UST Preferred Stock” means the Issuer’s Fixed Rate Cumulative Perpetual Preferred
Stock, Series A.



     Part. 4. Certain Voting Matters. Holders of shares of Designated Preferred Stock will
be entitled to one vote for each such share on any matter on which holders of Designated Preferred
Stock are entitled to vote, including any action by written consent.



     3. Except as amended by these Articles of Amendment, the Charter of the Corporation shall
remain in full force and effect.



     4. These Articles of Amendment were duly adopted by the Board of Directors of the Corporation
on February 17, 2009 without shareholder approval as no such approval was required.



     5. These Articles of Amendment of the Charter of the Corporation will be effective as of 8:00
a.m. Central Standard Time on February 27, 2009



Date: February 26, 2009




	 	 	 	 	 
	 	COMMUNITY FIRST, INC.

 	 
	 	
 	 
	 	Name:  	Marc R. Lively 	 
	 	Title:  	President and Chief Executive Officer 	 



2









 






	 	 	 	 	 



Schedule A




STANDARD PROVISIONS





Section 1. General Matters. Each share of Designated Preferred Stock shall be
identical in all respects to every other share of Designated Preferred Stock. The Designated
Preferred Stock shall be perpetual, subject to the provisions of Section 5 of these Standard
Provisions that form a part of the Certificate of Designations. The Designated Preferred Stock
shall rank equally with Parity Stock and shall rank senior to Junior Stock with respect to the
payment of dividends and the distribution of assets in the event of any dissolution, liquidation or
winding up of the Issuer.



Section 2. Standard Definitions. As used herein with respect to Designated Preferred
Stock:



     (a) “Appropriate Federal Banking Agency” means the “appropriate Federal banking
agency” with respect to the Issuer as defined in Section 3(q) of the Federal Deposit Insurance Act
(12 U.S.C. Section 1813(q)), or any successor provision.



     (b) “Articles of Amendment” means the Articles of Amendment filed with the Secretary
of State of the State of Tennessee by Community First, Inc. creating the Designated Preferred
Stock.



     (c) “Business Combination” means a merger, consolidation, statutory share exchange or
similar transaction that requires the approval of the Issuer’s stockholders.



     (d) “Business Day” means any day except Saturday, Sunday and any day on which banking
institutions in the State of New York generally are authorized or required by law or other
governmental actions to close.



     (e) “Bylaws” means the bylaws of the Issuer, as they may be amended from time to time.



     (f) “Certificate of Designations” means the Articles of Amendment, of which these
Standard Provisions form a part, as it may be amended from time to time.



     (g) “Charter” means the Issuer’s certificate or articles of incorporation, articles of
association, or similar organizational document.



     (h) “Dividend Period” has the meaning set forth in Section 3(a).



     (i) “Dividend Record Date” has the meaning set forth in Section 3(a).



     (j) “Liquidation Preference” has the meaning set forth in Section 4(a).



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     (k) “Original Issue Date” means the date on which shares of Designated Preferred Stock
are first issued.



     (l) “Preferred Director” has the meaning set forth in Section 7(b).



     (m) “Preferred Stock” means any and all series of preferred stock of the Issuer,
including the Designated Preferred Stock.



     (n) “Qualified Equity Offering” means the sale and issuance for cash by the Issuer to
persons other than the Issuer or any of its subsidiaries after the Original Issue Date of shares of
perpetual Preferred Stock, Common Stock or any combination of such stock, that, in each case,
qualify as and may be included in Tier 1 capital of the Issuer at the time of issuance under the
applicable risk-based capital guidelines of the Issuer’s Appropriate Federal Banking Agency (other
than any such sales and issuances made pursuant to agreements or arrangements entered into, or
pursuant to financing plans which were publicly announced, on or prior to November 17, 2008).



     (o) “Standard Provisions” mean these Standard Provisions that form a part of the
Certificate of Designations relating to the Designated Preferred Stock.



     (p) “Successor Preferred Stock” has the meaning set forth in Section 5(a).



     (q) “Voting Parity Stock” means, with regard to any matter as to which the holders of
Designated Preferred Stock are entitled to vote as specified in Sections 7(a) and 7(b) of these
Standard Provisions that form a part of the Certificate of Designations, any and all series of
Parity Stock upon which like voting rights have been conferred and are exercisable with respect to
such matter.



Section 3. Dividends.




     (a) Rate. Holders of Designated Preferred Stock shall be entitled to receive, on each
share of Designated Preferred Stock if, as and when declared by the Board of Directors or any duly
authorized committee of the Board of Directors, but only out of assets legally available therefor,
cumulative cash dividends with respect to each Dividend Period (as defined below) at a per annum
rate of 9.0% on (i) the Liquidation Amount per share of Designated Preferred Stock and (ii) the
amount of accrued and unpaid dividends for any prior Dividend Period on such share of Designated
Preferred Stock, if any. Such dividends shall begin to accrue and be cumulative from the Original
Issue Date, shall compound on each subsequent Dividend Payment Date (i.e., no dividends shall
accrue on other dividends unless and until the first Dividend Payment Date for such other dividends
has passed without such other dividends having been paid on such date) and shall be payable
quarterly in arrears on each Dividend Payment Date, commencing with the first such Dividend Payment
Date to occur at least 20 calendar days after the Original Issue Date. In the event that any
Dividend Payment Date would otherwise fall on a day that is not a Business Day, the dividend
payment due on that date will be postponed to the next day that is a Business Day and no additional
dividends will accrue as a result of that



A-2









 







postponement. The period from and including any Dividend Payment Date to, but excluding, the next
Dividend Payment Date is a “Dividend Period”, provided that the initial Dividend Period
shall be the period from and including the Original Issue Date to, but excluding, the next Dividend
Payment Date.



     Dividends that are payable on Designated Preferred Stock in respect of any Dividend Period
shall be computed on the basis of a 360-day year consisting of twelve 30-day months. The amount of
dividends payable on Designated Preferred Stock on any date prior to the end of a Dividend Period,
and for the initial Dividend Period, shall be computed on the basis of a 360-day year consisting of
twelve 30-day months, and actual days elapsed over a 30-day month.



     Dividends that are payable on Designated Preferred Stock on any Dividend Payment Date will be
payable to holders of record of Designated Preferred Stock as they appear on the stock register of
the Issuer on the applicable record date, which shall be the 15th calendar day immediately
preceding such Dividend Payment Date or such other record date fixed by the Board of Directors or
any duly authorized committee of the Board of Directors that is not more than 60 nor less than 10
days prior to such Dividend Payment Date (each, a “Dividend Record Date”). Any such day
that is a Dividend Record Date shall be a Dividend Record Date whether or not such day is a
Business Day.



     Holders of Designated Preferred Stock shall not be entitled to any dividends, whether payable
in cash, securities or other property, other than dividends (if any) declared and payable on
Designated Preferred Stock as specified in this Section 3 (subject to the other provisions of the
Certificate of Designations).



     (b) Priority of Dividends. So long as any share of Designated Preferred Stock remains
outstanding, no dividend or distribution shall be declared or paid on the Common Stock or any other
shares of Junior Stock (other than dividends payable solely in shares of Common Stock) or Parity
Stock, subject to the immediately following paragraph in the case of 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 Issuer or any of its subsidiaries unless all accrued
and unpaid dividends for all past Dividend Periods, including the latest completed Dividend Period
(including, if applicable as provided in Section 3(a) above, dividends on such amount), on all
outstanding shares of Designated Preferred Stock have been or are contemporaneously 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 Designated Preferred Stock on the applicable record
date). The foregoing limitation shall not apply to (i) redemptions, purchases or other acquisitions
of shares of Common Stock or other Junior Stock in connection with the administration of any
employee benefit plan in the ordinary course of business and consistent with past practice; (ii)
the acquisition by the Issuer or any of its subsidiaries of record ownership in Junior Stock or
Parity Stock for the beneficial ownership of any other persons (other than the Issuer or any of its
subsidiaries), including as trustees or custodians; and (iii) the exchange or conversion of Junior
Stock for or into other Junior Stock or of Parity Stock for or into other Parity



A-3









 







Stock (with the same or lesser aggregate liquidation amount) or Junior Stock, in each case, solely
to the extent required pursuant to binding contractual agreements entered into prior to the Signing
Date or any subsequent agreement for the accelerated exercise, settlement or exchange thereof for
Common Stock.



     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 Designated Preferred Stock and any shares of Parity Stock, all dividends
declared on Designated 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 all accrued and unpaid dividends per
share on the shares of Designated Preferred Stock (including, if applicable as provided in Section
3(a) above, dividends on such amount) 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 their having been declared by the Board of Directors or a duly authorized
committee of 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 or a duly authorized committee of the Board of Directors determines not
to pay any dividend or a full dividend on a Dividend Payment Date, the Issuer will provide written
notice to the holders of Designated Preferred Stock prior to such Dividend Payment Date.



     Subject to the foregoing, and not otherwise, such dividends (payable in cash, securities or
other property) as may be determined by the Board of Directors or any duly authorized committee of
the Board of Directors may be declared and paid on any securities, including Common Stock and other
Junior Stock, from time to time out of any funds legally available for such payment, and holders of
Designated Preferred Stock shall not be entitled to participate in any such dividends.



Section 4. Liquidation Rights.




     (a) Voluntary or Involuntary Liquidation. In the event of any liquidation, dissolution
or winding up of the affairs of the Issuer, whether voluntary or involuntary, holders of Designated
Preferred Stock shall be entitled to receive for each share of Designated Preferred Stock, out of
the assets of the Issuer or proceeds thereof (whether capital or surplus) available for
distribution to stockholders of the Issuer, subject to the rights of any creditors of the Issuer,
before any distribution of such assets or proceeds is made to or set aside for the holders of
Common Stock and any other stock of the Issuer ranking junior to Designated Preferred Stock as to
such distribution, payment in full in an



A-4









 







amount equal to the sum of (i) the Liquidation Amount per share and (ii) the amount of any accrued
and unpaid dividends (including, if applicable as provided in Section 3(a) above, dividends on such
amount), whether or not declared, to the date of payment (such amounts collectively, the
“Liquidation Preference”).



     (b) Partial Payment. If in any distribution described in Section 4(a) above the assets
of the Issuer or proceeds thereof are not sufficient to pay in full the amounts payable with
respect to all outstanding shares of Designated Preferred Stock and the corresponding amounts
payable with respect of any other stock of the Issuer ranking equally with Designated Preferred
Stock as to such distribution, holders of Designated Preferred Stock and the holders of such other
stock shall share ratably in any such distribution in proportion to the full respective
distributions to which they are entitled.



     (c) Residual Distributions. If the Liquidation Preference has been paid in full to all
holders of Designated Preferred Stock and the corresponding amounts payable with respect of any
other stock of the Issuer ranking equally with Designated Preferred Stock as to such distribution
has been paid in full, the holders of other stock of the Issuer shall be entitled to receive all
remaining assets of the Issuer (or proceeds thereof) according to their respective rights and
preferences.



     (d) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this
Section 4, the merger or consolidation of the Issuer with any other corporation or other entity,
including a merger or consolidation in which the holders of Designated Preferred Stock receive
cash, securities or other property for their shares, or the sale, lease or exchange (for cash,
securities or other property) of all or substantially all of the assets of the Issuer, shall not
constitute a liquidation, dissolution or winding up of the Issuer.



Section 5. Redemption.




     (a) Optional Redemption. Except as provided below, the Designated Preferred Stock may
not be redeemed prior to the later of (i) the first Dividend Payment Date falling on or after the
third anniversary of the Original Issue Date; and (ii) the date on which all outstanding shares of
UST Preferred Stock have been redeemed, repurchased or otherwise acquired by the Issuer. On or
after the first Dividend Payment Date falling on or after the third anniversary of the Original
Issue Date, the Issuer, at its option, subject to the approval of the Appropriate Federal Banking
Agency, may redeem, in whole or in part, at any time and from time to time, out of funds legally
available therefor, the shares of Designated Preferred Stock at the time outstanding, upon notice
given as provided in Section 5(c) below, at a redemption price equal to the sum of (i) the
Liquidation Amount per share and (ii) except as otherwise provided below, any accrued and unpaid
dividends (including, if applicable as provided in Section 3(a) above, dividends on such amount)
(regardless of whether any dividends are actually declared) to, but excluding, the date fixed for
redemption.



A-5









 





     Notwithstanding the foregoing, prior to the first Dividend Payment Date falling on or after
the third anniversary of the Original Issue Date, the Issuer, at its option, subject to the
approval of the Appropriate Federal Banking Agency and subject to the requirement that all
outstanding shares of UST Preferred Stock shall previously have been redeemed, repurchased or
otherwise acquired by the Issuer, may redeem, in whole or in part, at any time and from time to
time, the shares of Designated Preferred Stock at the time outstanding, upon notice given as
provided in Section 5(c) below, at a redemption price equal to the sum of (i) the Liquidation
Amount per share and (ii) except as otherwise provided below, any accrued and unpaid dividends
(including, if applicable as provided in Section 3(a) above, dividends on such amount) (regardless
of whether any dividends are actually declared) to, but excluding, the date fixed for redemption;
provided that (x) the Issuer (or any successor by Business Combination) has received aggregate
gross proceeds of not less than the Minimum Amount (plus the “Minimum Amount” as defined in the
relevant certificate of designations for each other outstanding series of preferred stock of such
successor that was originally issued to the United States Department of the Treasury (the
“Successor Preferred Stock”) in connection with the Troubled Asset Relief Program Capital
Purchase Program) from one or more Qualified Equity Offerings (including Qualified Equity Offerings
of such successor), and (y) the aggregate redemption price of the Designated Preferred Stock (and
any Successor Preferred Stock) redeemed pursuant to this paragraph may not exceed the aggregate net
cash proceeds received by the Issuer (or any successor by Business Combination) from such Qualified
Equity Offerings (including Qualified Equity Offerings of such successor).



     The redemption price for any shares of Designated Preferred Stock shall be payable on the
redemption date to the holder of such shares against surrender of the certificate(s) evidencing
such shares to the Issuer or its agent. Any declared but unpaid dividends payable on a redemption
date that occurs subsequent to the Dividend Record Date for a Dividend Period shall not be paid to
the holder entitled to receive the redemption price on the redemption date, but rather shall be
paid to the holder of record of the redeemed shares on such Dividend Record Date relating to the
Dividend Payment Date as provided in Section 3 above.



     (b) No Sinking Fund. The Designated Preferred Stock will not be subject to any
mandatory redemption, sinking fund or other similar provisions. Holders of Designated Preferred
Stock will have no right to require redemption or repurchase of any shares of Designated Preferred
Stock.



     (c) Notice of Redemption. Notice of every redemption of shares of Designated Preferred
Stock shall be given by first class mail, postage prepaid, addressed to the holders of record of
the shares to be redeemed at their respective last addresses appearing on the books of the Issuer.
Such mailing shall be at least 30 days and not more than 60 days before the date fixed for
redemption. Any notice mailed as provided in this Subsection shall be conclusively presumed to have
been duly given, whether or not the holder receives such notice, but failure duly to give such
notice by mail, or any defect in such notice or in the mailing thereof, to any holder of shares of
Designated Preferred



A-6









 







Stock designated for redemption shall not affect the validity of the proceedings for the redemption
of any other shares of Designated Preferred Stock. Notwithstanding the foregoing, if shares of
Designated Preferred Stock are issued in book-entry form through The Depository Trust Company or
any other similar facility, notice of redemption may be given to the holders of Designated
Preferred Stock at such time and in any manner permitted by such facility. Each notice of
redemption given to a holder shall state: (1) the redemption date; (2) the number of shares of
Designated Preferred Stock to be redeemed and, if less than all the shares held by such holder are
to be redeemed, the number of such shares to be redeemed from such holder; (3) the redemption
price; and (4) the place or places where certificates for such shares are to be surrendered for
payment of the redemption price.



     (d) Partial Redemption. In case of any redemption of part of the shares of Designated
Preferred Stock at the time outstanding, the shares to be redeemed shall be selected either pro
rata or in such other manner as the Board of Directors or a duly authorized committee thereof may
determine to be fair and equitable. Subject to the provisions hereof, the Board of Directors or a
duly authorized committee thereof shall have full power and authority to prescribe the terms and
conditions upon which shares of Designated Preferred Stock shall be redeemed from time to time. If
fewer than all the shares represented by any certificate are redeemed, a new certificate shall be
issued representing the unredeemed shares without charge to the holder thereof.



     (e) Effectiveness of Redemption. If notice of redemption has been duly given and if on
or before the redemption date specified in the notice all funds necessary for the redemption have
been deposited by the Issuer, in trust for the pro rata benefit of the holders of the shares called
for redemption, with a bank or trust company doing business in the Borough of Manhattan, The City
of New York, and having a capital and surplus of at least $500 million and selected by the Board of
Directors, so as to be and continue to be available solely therefor, then, notwithstanding that any
certificate for any share so called for redemption has not been surrendered for cancellation, on
and after the redemption date dividends shall cease to accrue on all shares so called for
redemption, all shares so called for redemption shall no longer be deemed outstanding and all
rights with respect to such shares shall forthwith on such redemption date cease and terminate,
except only the right of the holders thereof to receive the amount payable on such redemption from
such bank or trust company, without interest. Any funds unclaimed at the end of three years from
the redemption date shall, to the extent permitted by law, be released to the Issuer, after which
time the holders of the shares so called for redemption shall look only to the Issuer for payment
of the redemption price of such shares.



     (f) Status of Redeemed Shares. Shares of Designated Preferred Stock that are redeemed,
repurchased or otherwise acquired by the Issuer shall revert to authorized but unissued shares of
Preferred Stock (provided that any such cancelled shares of Designated Preferred Stock may be
reissued only as shares of any series of Preferred Stock other than Designated Preferred Stock).



A-7









 




Section 6. Conversion. Holders of Designated Preferred Stock shares shall have no right to
exchange or convert such shares into any other securities.




Section 7. Voting Rights.




     (a) General. The holders of Designated Preferred Stock shall not have any voting
rights except as set forth below or as otherwise from time to time required by law.



     (b) Preferred Stock Directors. Whenever, at any time or times, dividends payable on
the shares of Designated Preferred Stock have not been paid for an aggregate of six quarterly
Dividend Periods or more, whether or not consecutive, the authorized number of directors of the
Issuer shall automatically be increased by two and the holders of the Designated Preferred Stock
shall have the right, with holders of shares of any one or more other classes or series of Voting
Parity Stock outstanding at the time, voting together as a class, to elect two directors
(hereinafter the “Preferred Directors” and each a “Preferred Director”) to fill
such newly created directorships at the Issuer’s next annual meeting of stockholders (or at a
special meeting called for that purpose prior to such next annual meeting) and at each subsequent
annual meeting of stockholders until all accrued and unpaid dividends for all past Dividend
Periods, including the latest completed Dividend Period (including, if applicable as provided in
Section 3(a) above, dividends on such amount), on all outstanding shares of Designated Preferred
Stock have been declared and paid in full at which time such right shall terminate with respect to
the Designated Preferred Stock, except as herein or by law expressly provided, subject to revesting
in the event of each and every subsequent default of the character above mentioned; provided that
it shall be a qualification for election for any Preferred Director that the election of such
Preferred Director shall not cause the Issuer to violate any corporate governance requirements of
any securities exchange or other trading facility on which securities of the Issuer may then be
listed or traded that listed or traded companies must have a majority of independent directors.
Upon any termination of the right of the holders of shares of Designated Preferred Stock and Voting
Parity Stock as a class to vote for directors as provided above, the Preferred Directors shall
cease to be qualified as directors, the term of office of all Preferred Directors then in office
shall terminate immediately and the authorized number of directors shall be reduced by the number
of Preferred Directors elected pursuant hereto. Any Preferred Director may be removed at any time,
with or without cause, and any vacancy created thereby may be filled, only by the affirmative vote
of the holders a majority of the shares of Designated Preferred Stock at the time outstanding
voting separately as a class together with the holders of shares of Voting Parity Stock, to the
extent the voting rights of such holders described above are then exercisable. If the office of any
Preferred Director becomes vacant for any reason other than removal from office as aforesaid, the
remaining Preferred Director may choose a successor who shall hold office for the unexpired term in
respect of which such vacancy occurred.



     (c) Class Voting Rights as to Particular Matters. So long as any shares of Designated
Preferred Stock are outstanding, in addition to any other vote or consent of stockholders required
by law or by the Charter, the vote or consent of the holders of at



A-8









 







least 66 2/3% of the shares of Designated Preferred Stock at the time outstanding, voting as a
separate class, given in person or by proxy, either in writing without a meeting or 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
Certificate of Designations for the Designated Preferred Stock or the Charter 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 Issuer ranking senior to Designated 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 Issuer;




     (ii) Amendment of Designated Preferred Stock. Any amendment, alteration or
repeal of any provision of the Certificate of Designations for the Designated Preferred
Stock or the Charter (including, unless no vote on such merger or consolidation is required
by Section 7(c)(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 the Designated Preferred Stock; or




     (iii) Share Exchanges, Reclassifications, Mergers and Consolidations. Any
consummation of a binding share exchange or reclassification involving the Designated
Preferred Stock, or of a merger or consolidation of the Issuer with another corporation or
other entity, unless in each case (x) the shares of Designated Preferred Stock remain
outstanding or, in the case of any such merger or consolidation with respect to which the
Issuer is not the surviving or resulting entity, are converted into or exchanged for
preference securities of the surviving or resulting entity or its ultimate parent, and (y)
such shares remaining outstanding or such preference securities, as the case may be, have
such rights, preferences, privileges and voting powers, and limitations and restrictions
thereof, taken as a whole, as are not materially less favorable to the holders thereof than
the rights, preferences, privileges and voting powers, and limitations and restrictions
thereof, of Designated Preferred Stock immediately prior to such consummation, taken as a
whole;


provided, however, that for all purposes of this Section 7(c), any increase in the amount of the
authorized Preferred Stock, including any increase in the authorized amount of Designated Preferred
Stock necessary to satisfy preemptive or similar rights granted by the Issuer to other persons
prior to the Signing Date, or 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 Designated Preferred Stock with
respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and
the distribution of assets upon liquidation, dissolution or winding up of the Issuer will not be


A- 9









 






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 Designated
Preferred Stock.




     (d) Changes after Provision for Redemption. No vote or consent of the holders of
Designated Preferred Stock shall be required pursuant to Section 7(c) above if, at or prior to the
time when any such vote or consent would otherwise be required pursuant to such Section, all
outstanding shares of the Designated Preferred Stock shall have been redeemed, or shall have been
called for redemption upon proper notice and sufficient funds shall have been deposited in trust
for such redemption, in each case pursuant to Section 5 above.



     (e) Procedures for Voting and Consents. The rules and procedures for calling and
conducting any meeting of the holders of Designated 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 or any duly
authorized committee 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 Charter, the Bylaws, and
applicable law and the rules of any national securities exchange or other trading facility on which
Designated Preferred Stock is listed or traded at the time.



     Section 8. Record Holders. To the fullest extent permitted by applicable law, the
Issuer and the transfer agent for Designated Preferred Stock may deem and treat the record holder
of any share of Designated Preferred Stock as the true and lawful owner thereof for all purposes,
and neither the Issuer nor such transfer agent shall be affected by any notice to the contrary.



     Section 9. Notices. All notices or communications in respect of Designated Preferred
Stock shall be sufficiently given if given in writing and delivered in person or by first class
mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of
Designations, in the Charter or Bylaws or by applicable law. Notwithstanding the foregoing, if
shares of Designated Preferred Stock are issued in book-entry form through The Depository Trust
Company or any similar facility, such notices may be given to the holders of Designated Preferred
Stock in any manner permitted by such facility.



     Section 10. No Preemptive Rights. No share of Designated Preferred Stock shall have
any rights of preemption whatsoever as to any securities of the Issuer, 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.



     Section 11. Replacement Certificates. The Issuer shall replace any mutilated
certificate at the holder’s expense upon surrender of that certificate to the Issuer. The Issuer
shall replace certificates that become destroyed, stolen or lost at the holder’s



A-10









 







expense upon delivery to the Issuer of reasonably satisfactory evidence that the certificate
has been destroyed, stolen or lost, together with any indemnity that may be reasonably required by
the Issuer.



     Section 12. Other Rights. The shares of Designated 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 Charter or as provided by applicable law.




A-11












 





ANNEX C




FORM OF WAIVER 



In consideration for the benefits I will receive as a result of my employer’s participation in the
United States Department of the Treasury’s TARP Capital Purchase Program, I hereby voluntarily
waive any claim against the United States or any state or territory thereof or my employer or any
of its directors, officers, employees and agents for any changes to my compensation or benefits
that are required in order to comply with Section 111 of the Emergency Economic Stabilization Act
of 2008, as amended (“EESA”), and rules, regulations, guidance or other requirements issued
thereunder (collectively, the “EESA Restrictions”).



I acknowledge that the EESA Restrictions may require modification of the employment, compensation,
bonus, incentive, severance, retention and other benefit plans, arrangements, policies and
agreements (including so-called “golden parachute” agreements), whether or not in writing, that I
have with my employer or in which I participate as they relate to the period the United States
holds any equity or debt securities of my employer acquired through the TARP Capital Purchase
Program and I hereby consent to all such modifications. I further acknowledge and agree that if my
employer notifies me in writing that I have received payments in violation of the EESA
Restrictions, I shall repay the aggregate amount of such payments to my employer no later than
fifteen business days following my receipt of such notice.



This waiver includes all claims I may have under the laws of the United States or any other
jurisdiction related to the requirements imposed by the EESA Restrictions (including without
limitation, any claim for any compensation or other payments or benefits I would otherwise receive
absent the EESA Restrictions, any challenge to the process by which the EESA Restrictions were
adopted and any tort or constitutional claim about the effect of the foregoing on my employment
relationship) and I hereby agree that I will not at any time initiate, or cause or permit to be
initiated on my behalf, any such claim against the United States, my employer or its directors,
officers, employees or agents in or before any local, state, federal or other agency, court or
body.



In witness whereof, I execute this waiver on my own behalf, thereby communicating my acceptance and
acknowledgement to the provisions herein.





	 	 	 	 	 
	 	Respectfully,  	 	 
	 
	 	
 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 	Date  	 	 



 









 






	 	 	 	 	 



ANNEX D




FORM OF OPINION





     (a) The Company has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the state of its incorporation.



     (b) The Preferred Shares have been duly and validly authorized, and, when issued and delivered
pursuant to the Agreement, the Preferred Shares will be duly and validly issued and fully paid and
non-assessable, will not be issued in violation of any preemptive rights, and will rank pari passu
with or senior to all other series or classes of Preferred Stock issued on the Closing Date with
respect to the payment of dividends and the distribution of assets in the event of any dissolution,
liquidation or winding up of the Company.



     (c) The Warrant has been duly authorized and, when executed and delivered as contemplated by
the Agreement, will constitute a valid and legally binding obligation of the Company enforceable
against the Company in accordance with its terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and general equitable principles, regardless of whether such
enforceability is considered in a proceeding at law or in equity.



     (d) The shares of Warrant Preferred Stock issuable upon exercise of the Warrant have been duly
authorized and reserved for issuance upon exercise of the Warrant and when so issued in accordance
with the terms of the Warrant will be validly issued, fully paid and non-assessable, and will rank
pari passu with or senior to all other series or classes of Preferred Stock, whether or not issued
or outstanding, with respect to the payment of dividends and the distribution of assets in the
event of any dissolution, liquidation or winding up of the Company.



     (e) The Company has the corporate power and authority to execute and deliver the Agreement and
the Warrant and to carry out its obligations thereunder (which includes the issuance of the
Preferred Shares, Warrant and Warrant Shares).



     (f) The execution, delivery and performance by the Company of the Agreement and the Warrant and
the consummation of the transactions contemplated thereby have been duly authorized by all
necessary corporate action on the part of the Company and its stockholders, and no further approval
or authorization is required on the part of the Company.



     (g) The Agreement is a valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’
rights generally and general equitable principles, regardless of whether such enforceability is
considered in a proceeding at law or in



 









 







equity; provided, however, such counsel need express no opinion with respect to Section 4.5(h)
or the severability provisions of the Agreement insofar as Section 4.5(h) is concerned.



 









 





ANNEX E




FORM OF WARRANT




[SEE ATTACHED]




 









 







ANNEX E




FORM OF WARRANT TO PURCHASE PREFERRED STOCK



THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD 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. THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS
OF A SECURITIES PURCHASE AGREEMENT BETWEEN THE ISSUER OF THESE SECURITIES AND THE INVESTOR REFERRED
TO THEREIN, A COPY OF WHICH IS ON FILE WITH THE ISSUER. THE SECURITIES REPRESENTED BY THIS
INSTRUMENT MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID AGREEMENT. ANY
SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE VOID.




WARRANT

to purchase

890.00890

Shares of Preferred Stock




of Community First, Inc.




Issue Date: February 27, 2009




     1. Definitions. Unless the context otherwise requires, when used herein the following
terms shall have the meanings indicated.



     “Board of Directors” means the board of directors of the Company, including any duly
authorized committee thereof.



     “business day” means any day except Saturday, Sunday and any day on which banking institutions
in the State of New York generally are authorized or required by law or other governmental actions
to close.



     “Charter” means, with respect to any Person, its certificate or articles of incorporation,
articles of association, or similar organizational document.



     “Company” means the Person whose name, corporate or other organizational form and jurisdiction
of organization is set forth in Item 1 of Schedule A hereto.



 









 





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



     “Exercise Price” means the amount set forth in Item 2 of Schedule A hereto.



     “Expiration Time” has the meaning set forth in Section 3.



     “Issue Date” means the date set forth in Item 3 of Schedule A hereto.



     “Liquidation Amount” means the amount set forth in Item 4 of Schedule A hereto.



     “Original Warrantholder” means the United States Department of the Treasury. Any actions
specified to be taken by the Original Warrantholder hereunder may only be taken by such Person and
not by any other Warrantholder.



     “Person” has the meaning given to it in Section 3(a)(9) of the Exchange Act and as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act.



     “Preferred Stock” means the series of perpetual preferred stock set forth in Item 5 of
Schedule A hereto.



     “Purchase Agreement” means the Securities Purchase Agreement — Standard Terms incorporated
into the Letter Agreement, dated as of the date set forth in Item 6 of Schedule A hereto, as
amended from time to time, between the Company and the United States Department of the Treasury
(the “Letter Agreement”), including all annexes and schedules thereto.



     “Regulatory Approvals” with respect to the Warrantholder, means, to the extent applicable and
required to permit the Warrantholder to exercise this Warrant for shares of Preferred Stock and to
own such Preferred Stock without the Warrantholder being in violation of applicable law, rule or
regulation, the receipt of any necessary approvals and authorizations of, filings and registrations
with, notifications to, or expiration or termination of any applicable waiting period under, the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations
thereunder.



     “SEC” means the U.S. Securities and Exchange Commission.



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



     “Shares” has the meaning set forth in Section 2.



     “Warrantholder” has the meaning set forth in Section 2.



     “Warrant” means this Warrant, issued pursuant to the Purchase Agreement.



2









 





     2. Number of Shares; Exercise Price. This certifies that, for value received, the
United States Department of the Treasury or its permitted assigns (the “Warrantholder”) is
entitled, upon the terms and subject to the conditions hereinafter set forth, to acquire from the
Company, in whole or in part, after the receipt of all applicable Regulatory Approvals, if any, up
to an aggregate of the number of fully paid and nonassessable shares of Preferred Stock set forth
in Item 7 of Schedule A hereto (the “Shares”), at a purchase price per share of Preferred Stock
equal to the Exercise Price.



     3. Exercise of Warrant; Term. Subject to Section 2, to the extent permitted by
applicable laws and regulations, the right to purchase the Shares represented by this Warrant is
exercisable, in whole or in part by the Warrantholder, at any time or from time to time after the
execution and delivery of this Warrant by the Company on the date hereof, but in no event later
than 5:00 p.m., New York City time on the tenth anniversary of the Issue Date (the “Expiration
Time”), by (A) the surrender of this Warrant and Notice of Exercise annexed hereto, duly completed
and executed on behalf of the Warrantholder, at the principal executive office of the Company
located at the address set forth in Item 8 of Schedule A hereto (or such other office or agency of
the Company in the United States as it may designate by notice in writing to the Warrantholder at
the address of the Warrantholder appearing on the books of the Company), and (B) payment of the
Exercise Price for the Shares thereby purchased, by having the Company withhold, from the shares of
Preferred Stock that would otherwise be delivered to the Warrantholder upon such exercise, shares
of Preferred Stock issuable upon exercise of the Warrant with an aggregate Liquidation Amount equal
in value to the aggregate Exercise Price as to which this Warrant is so exercised.



     If the Warrantholder does not exercise this Warrant in its entirety, the Warrantholder will be
entitled to receive from the Company within a reasonable time, and in any event not exceeding three
business days, a new warrant in substantially identical form for the purchase of that number of
Shares equal to the difference between the number of Shares subject to this Warrant and the number
of Shares as to which this Warrant is so exercised. Notwithstanding anything in this Warrant to the
contrary, the Warrantholder hereby acknowledges and agrees that its exercise of this Warrant for
Shares is subject to the condition that the Warrantholder will have first received any applicable
Regulatory Approvals.



     4. Issuance of Shares; Authorization. Certificates for Shares issued upon exercise of
this Warrant will be issued in such name or names as the Warrantholder may designate and will be
delivered to such named Person or Persons within a reasonable time, not to exceed three business
days after the date on which this Warrant has been duly exercised in accordance with the terms of
this Warrant. The Company hereby represents and warrants that any Shares issued upon the exercise
of this Warrant in accordance with the provisions of Section 3 will be duly and validly authorized
and issued, fully paid and nonassessable and free from all taxes, liens and charges (other than
liens or charges created by the Warrantholder, income and franchise taxes incurred in connection
with the exercise of the Warrant or taxes in respect of any transfer occurring contemporaneously
therewith). The Company agrees that the Shares so issued will be deemed to have been issued to the
Warrantholder as of the close of business on the date on which this Warrant and payment of the
Exercise Price are delivered to the Company in accordance with



3









 







the terms of this Warrant, notwithstanding that the stock transfer books of the Company may
then be closed or certificates representing such Shares may not be actually delivered on such date.
The Company will at all times reserve and keep available, out of its authorized but unissued
preferred stock, solely for the purpose of providing for the exercise of this Warrant, the
aggregate number of shares of Preferred Stock then issuable upon exercise of this Warrant at any
time. The Company will use reasonable best efforts to ensure that the Shares may be issued without
violation of any applicable law or regulation or of any requirement of any securities exchange on
which the Shares are listed or traded.



     5. No Rights as Stockholders; Transfer Books. This Warrant does not entitle the
Warrantholder to any voting rights or other rights as a stockholder of the Company prior to the
date of exercise hereof. The Company will at no time close its transfer books against transfer of
this Warrant in any manner which interferes with the timely exercise of this Warrant.



     6. Charges, Taxes and Expenses. Issuance of certificates for Shares to the
Warrantholder upon the exercise of this Warrant shall be made without charge to the Warrantholder
for any issue or transfer tax or other incidental expense in respect of the issuance of such
certificates, all of which taxes and expenses shall be paid by the Company.



     7. Transfer/Assignment.



     (A) Subject to compliance with clause (B) of this Section 7, this Warrant and all rights
hereunder are transferable, in whole or in part, upon the books of the Company by the registered
holder hereof in person or by duly authorized attorney, and a new warrant shall be made and
delivered by the Company, of the same tenor and date as this Warrant but registered in the name of
one or more transferees, upon surrender of this Warrant, duly endorsed, to the office or agency of
the Company described in Section 3. All expenses (other than stock transfer taxes) and other
charges payable in connection with the preparation, execution and delivery of the new warrants
pursuant to this Section 7 shall be paid by the Company.



     (B) The transfer of the Warrant and the Shares issued upon exercise of the Warrant are subject
to the restrictions set forth in Section 4.4 of the Purchase Agreement. If and for so long as
required by the Purchase Agreement, this Warrant shall contain the legends as set forth in Section
4.2(a) of the Purchase Agreement.



     8. Exchange and Registry of Warrant. This Warrant is exchangeable, upon the surrender
hereof by the Warrantholder to the Company, for a new warrant or warrants of like tenor and
representing the right to purchase the same aggregate number of Shares. The Company shall maintain
a registry showing the name and address of the Warrantholder as the registered holder of this
Warrant. This Warrant may be surrendered for exchange or exercise in accordance with its terms, at
the office of the Company, and the Company shall be entitled to rely in all respects, prior to
written notice to the contrary, upon such registry.



4









 





     9. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and in the case of any such loss, theft or destruction, upon receipt of a bond, indemnity
or security reasonably satisfactory to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of this Warrant, the Company shall make and deliver, in lieu of such
lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same aggregate number of Shares as provided for in such lost, stolen,
destroyed or mutilated Warrant.



     10. Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not be a business day,
then such action may be taken or such right may be exercised on the next succeeding day that is a
business day.



     11. Rule 144 Information. The Company covenants that it will use its reasonable best
efforts to timely file all reports and other documents required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations promulgated by the SEC thereunder
(or, if the Company is not required to file such reports, it will, upon the request of any
Warrantholder, make publicly available such information as necessary to permit sales pursuant to
Rule 144 under the Securities Act), and it will use reasonable best efforts to take such further
action as any Warrantholder may reasonably request, in each case to the extent required from time
to time to enable such holder to, if permitted by the terms of this Warrant and the Purchase
Agreement, sell this Warrant without registration under the Securities Act within the limitation of
the exemptions provided by (A) Rule 144 under the Securities Act, as such rule may be amended from
time to time, or (B) any successor rule or regulation hereafter adopted by the SEC. Upon the
written request of any Warrantholder, the Company will deliver to such Warrantholder a written
statement that it has complied with such requirements.



     12. Adjustments and Other Rights. For so long as the Original Warrantholder holds this
Warrant or any portion thereof, if any event occurs that, in the good faith judgment of the Board
of Directors of the Company, would require adjustment of the Exercise Price or number of Shares
into which this Warrant is exercisable in order to fairly and adequately protect the purchase
rights of the Warrants in accordance with the essential intent and principles of the Purchase
Agreement and this Warrant, then the Board of Directors shall make such adjustments in the
application of such provisions, in accordance with such essential intent and principles, as shall
be reasonably necessary, in the good faith opinion of the Board of Directors, to protect such
purchase rights as aforesaid.



     Whenever the Exercise Price or the number of Shares into which this Warrant is exercisable
shall be adjusted as provided in this Section 12, the Company shall forthwith file at the principal
office of the Company a statement showing in reasonable detail the facts requiring such adjustment
and the Exercise Price that shall be in effect and the number of Shares into which this Warrant
shall be exercisable after such adjustment, and the Company shall also cause



5









 







a copy of such statement to be sent by mail, first class postage prepaid, to each Warrantholder at
the address appearing in the Company’s records.



     13. No Impairment. The Company will not, by amendment of its Charter or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the
terms to be observed or performed hereunder by the Company, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in taking of all such action
as may be necessary or appropriate in order to protect the rights of the Warrantholder.



     14. Governing Law. This Warrant will be governed by and construed 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 Company and the Warrantholder agrees (a) to submit to the
exclusive jurisdiction and venue of the United States District Court for the District of Columbia
for any civil action, suit or proceeding arising out of or relating to this Warrant or the
transactions contemplated hereby, and (b) that notice may be served upon the Company at the address
in Section 17 below and upon the Warrantholder at the address for the Warrantholder set forth in
the registry maintained by the Company pursuant to Section 8 hereof. To the extent permitted by
applicable law, each of the Company and the Warrantholder hereby unconditionally waives trial by
jury in any civil legal action or proceeding relating to the Warrant or the transactions
contemplated hereby or thereby.



     15. Binding Effect. This Warrant shall be binding upon any successors or assigns of
the Company.



     16. Amendments. This Warrant may be amended and the observance of any term of this
Warrant may be waived only with the written consent of the Company and the Warrantholder.



     17. Notices. Any notice, request, instruction or other document to be given hereunder
by any party to the other will be in writing and will be deemed to have been duly given (a) on the
date of delivery if delivered personally, or by facsimile, upon confirmation of receipt, or (b) on
the second business day following the date of dispatch if delivered by a recognized next day
courier service. All notices hereunder shall be delivered as set forth in Item 9 of Schedule A
hereto, or pursuant to such other instructions as may be designated in writing by the party to
receive such notice.



     18. Entire Agreement. This Warrant, the forms attached hereto and Schedule A hereto
(the terms of which are incorporated by reference herein), and the Letter Agreement (including all
documents incorporated therein), contain the entire agreement between the parties with



6









 







respect to the subject matter hereof and supersede all prior and contemporaneous arrangements
or undertakings with respect thereto.



[Remainder of page intentionally left blank]




7









 








[Form of Notice of Exercise]

Date:                     




TO:     Community First, Inc.




RE:     Election to Purchase Preferred Stock




     The undersigned, pursuant to the provisions set forth in the attached Warrant, hereby agrees
to subscribe for and purchase such number of shares of Preferred Stock covered by the Warrant such
that after giving effect to an exercise pursuant to Section 3(B) of the Warrant, the undersigned
will receive the net number of shares of Preferred Stock set forth below. The undersigned, in
accordance with Section 3 of the Warrant, hereby agrees to pay the aggregate Exercise Price for
such shares of Preferred Stock in the manner set forth in Section 3(B) of the Warrant.



Number of Shares of Preferred Stock:1                                                  
           




     The undersigned agrees that it is exercising the attached Warrant in full and that, upon
receipt by the undersigned of the number of shares of Preferred Stock set forth above, such Warrant
shall be deemed to be cancelled and surrendered to the Company.



	 	 	 	 	 
	 	Holder: 	 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 





 




			
	1.	 	Number of shares to be received by the undersigned upon
exercise of the attached Warrant pursuant to Section 3(B) thereof.




8









 











     IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by a duly
authorized officer.



Dated: February 27, 2009




	 	 	 	 	 
	 	COMPANY: COMMUNITY FIRST, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Marc R. Lively 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 
	 	Attest:

 	 
	 	By:  	 	 
	 	 	Name:  	Dianne Scroggins 	 
	 	 	Title:  	Chief Financial Officer 	 
	 



[Signature Page to Warrant]














 








SCHEDULE A




Item 1 

Name: Community First, Inc.

Corporate or other organizational form: Corporation

Jurisdiction of organization: Tennessee





Item 2 

Exercise Price:2 $0.01



Item 3 

Issue Date: February 27, 2009



Item 4

Liquidation Amount: $1,000



Item 5

Series of Perpetual Preferred Stock: Fixed Rate Cumulative Perpetual Preferred Stock, Series B



Item 6

Date of Letter Agreement between the Company and the United States Department of the Treasury:
February 27, 2009



Item 7

Number of shares of Preferred Stock:3 890.00890



Item 8




			
	Company’s address:	 	501 S. James Campbell Blvd.

Columbia, TN 38401





Item 9





			
	Notice information:	 	501 S. James Campbell Blvd.

Columbia, TN 38401
Attn: Marc R. Lively

          President and Chief Executive Officer

          Telephone: (931) 490-3434

          Facsimile: (931) 388-3188







 




			
	2	 	$0.01 per share or such greater amount as the Charter
may require as the par value of the Preferred Stock.
	 
	3	 	The initial number of shares of Preferred Stock for
which this Warrant is exercisable shall include the number of shares required
to effect the cashless exercise pursuant to Section 3(B) of this Warrant (e.g.,
such number of shares of Preferred Stock having an aggregate Liquidation Amount
equal in value to the aggregate Exercise Price) such that, following exercise
of this Warrant and payment of the Exercise Price in accordance with such
Section 3(B), the net number of shares of Preferred Stock delivered to the
Warrantholder (and rounded to the nearest whole share) would have an aggregate
Liquidation Amount equal to 5% of the aggregate amount invested by the United
States Department of the Treasury on the investment date.














 





SCHEDULE A




ADDITIONAL TERMS AND CONDITIONS



Company Information:



     Name of the Company: Community First, Inc.



     Corporate or other organizational form: Corporation



     Jurisdiction of Organization: Tennessee



     Appropriate Federal Banking Agency: Board of Governors of the Federal Reserve System



	 	 	 	 	 	 	 
	 	Notice Information:	Community First,
Inc.

501 S. James Campbell Blvd.

Columbia, TN 38401
	 	 	 	Attn:	  Marc R. Lively

  President and Chief Executive Officer

  Telephone: (931) 490-3434

  Facsimile: (931) 388-3188





Terms of the Purchase:



     Series of Preferred Stock Purchased: Fixed Rate Cumulative Perpetual Preferred Stock, Series A



     Per Share Liquidation Preference of Preferred Stock: $1,000



     Number of Shares of Preferred Stock Purchased: 17,806



     Dividend Payment Dates on the Preferred Stock: February 15, May 15, August 15 and November 15



     Series of Warrant Preferred Stock: Fixed Rate Cumulative Perpetual Preferred Stock, Series B



     Number of Warrant Shares: 890.00890



     Number of Net Warrant Shares (after net settlement): 890



     Exercise Price of the Warrant: $0.01



     Purchase Price: $17,806,000


Closing:



     Location of Closing: Hughes Hubbard & Reed LLP, One Battery Park Plaza, New York, NY 10004-1482



     Time of Closing: 9:00 A.M. EST



     Date of Closing: February 27, 2009



 









 





Wire Information for Closing:



[Redacted]

 

 

 

 




Contact
for Confirmation of Wire Information: 


Dianne Scroggins

Chief Financial Officer

Community First, Inc.

Telephone: (931) 490-3401

Facsimile: (931) 490-3452




 









 








SCHEDULE B




CAPITALIZATION



Capitalization Date: January 31, 2009


Common Stock



     Par value: No par value



     Total Authorized: 5,000,000



     Outstanding: 3,210,686



     Subject to warrants, options, convertible securities, etc.: 296,577



     Reserved for benefit plans and other issuances: 770,974



     Remaining authorized but unissued: 721,763



     Shares
issued after Capitalization Date (other than pursuant to warrants,

     options, convertible securities, etc. as set forth above): None


Preferred Stock



     Par value: No par value



     Total Authorized: 2,500,000



     Outstanding (by series): None



     Reserved for issuance: None



     Remaining authorized but unissued: 2,500,000



	 	 	 	 	 
	Holders of 5% or more	 	Percentage owned as of	 	 
	of any class of capital stock	 	Capitalization Date	 	Primary Address
	Eslick E. Daniel, MD
	 	7.17%	 	4682 Bass Alderson Rd.
	 
	 	 	 	Williamsport, TN 38487






 









 






SCHEDULE C




LITIGATION



List any exceptions to the representation and warranty in Section 2.2(1) of the Securities Purchase
Agreement — Standard Terms.


 

 

 


If none, please so indicate by checking the box: þ.




 









 








SCHEDULE D




COMPLIANCE WITH LAWS



List any exceptions to the representation and warranty in the second sentence of Section 2.2(m) of
the Securities Purchase Agreement — Standard Terms.


 

 

 


If none, please so indicate by checking the box: þ.


 


List any exceptions to the representation and warranty in the last sentence of Section 2.2(m) of
the Securities Purchase Agreement — Standard Terms.


 

 

 


If none, please so indicate by checking the box: þ.



 









 








SCHEDULE E




REGULATORY AGREEMENTS



List any exceptions to the representation and warranty in Section 2.2(s) of the Securities Purchase
Agreement — Standard Terms.


 

 

 


If none, please so indicate by checking the box: þ.