(CDFI Subchapter S Corporation 

Senior Securities) 

 A-1 

ANNEX A 

FORM OF SENIOR SUBORDINATED SECURITIES

(FORM OF FACE OF SECURITY) 

“THIS SENIOR SUBORDINATED SECURITY WILL BE ISSUED AND MAY 

BE TRANSFERRED ONLY IN MINIMUM DENOMINATIONS OF $1,000 

AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTED 

TRANSFER OF SUCH SECURITIES IN A DENOMINATION OF LESS THAN 

$1,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF SHALL BE 

DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. 

ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE 

THE HOLDER OF SUCH SECURITIES FOR ANY PURPOSE, INCLUDING, 

BUT NOT LIMITED TO, THE RECEIPT OF PAYMENTS ON SUCH 

SECURITIES, AND SUCH PURPORTED TRANSFEREE SHALL BE 

DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH SECURITIES. 

THIS SECURITY IS SUBJECT TO THE TERMS AND CONDITIONS SET 

FORTH IN THE LETTER AGREEMENT BY AND BETWEEN THE 

COMPANY AND THE UNITED STATES DEPARTMENT OF THE 

TREASURY AND SECURITIES PURCHASE AGREEMENT – STANDARD 

TERMS (THE “AGREEMENT”), EACH OF WHICH ARE INCORPORATED 

INTO THIS SENIOR SUBORDINATED SECURITY. 

THIS OBLIGATION IS NOT A SAVINGS ACCOUNT OR DEPOSIT AND IS 

NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT 

INSURANCE CORPORATION, THE BOARD OF GOVERNORS OF THE 

FEDERAL RESERVE SYSTEM OR ANY OTHER GOVERNMENTAL 

AGENCY. 

THIS OBLIGATION IS SUBORDINATED TO [Insert for Issuers that are 

Bank or Savings Associations: THE CLAIMS OF GENERAL AND SECURED 

CREDITORS OF THE COMPANY AND IS NOT SECURED] [Insert for 

Issuers that are BHCs or SLHCs: SENIOR INDEBTEDNESS OF THE 

COMPANY IN ACCORDANCE WITH APPLICABLE HOLDING COMPANY 

REGULATIONS OF THE APPROPRIATE FEDERAL BANKING AGENCY]. 

THIS SECURITY HAS 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 THIS SECURITY IS NOTIFIED THAT THE 
(CDFI Subchapter S Corporation 

Senior Securities) 

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SELLER MAY BE RELYING ON THE EXEMPTION FROM SECTION 5 OF 

THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. ANY 

TRANSFEREE OF THIS SECURITY 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 144A 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 

COMPANY 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 THIS SECURITY IS TRANSFERRED A NOTICE 

SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. 

THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON 

TRANSFER AND OTHER PROVISIONS OF THE AGREEMENT BETWEEN 

THE COMPANY AND THE INVESTOR REFERRED TO THEREIN, A COPY 

OF WHICH IS ON FILE WITH THE COMPANY. THIS SECURITY 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.” 
(CDFI Subchapter S Corporation 

Senior Securities) 

 A-3 

[NAME OF COMPANY] 

CUSIP No._________ 

$___________ 

3.1% SENIOR SUBORDINATED SECURITY DUE [Insert for bank or savings associations: 

2023] [Insert for BHCs or SLHCs: 2040]

[Company], a [State corporation] (the “Company,” which term includes any 

permitted successor thereto), for value received, hereby promises to pay to the order of the 

United States Department of the Treasury or registered assigns, by wire transfer, the principal 

sum of $_________________ (___________ Dollars) on _________________, [Insert for bank 

or savings associations: 2023] [Insert for BHCs or SLHCs: 2040] (the “Maturity Date”) (or any 

earlier redemption date or date of acceleration of the Maturity Date) and to pay interest on the 

outstanding principal amount of this Senior Subordinated Security Due [Insert for bank or 

savings associations: 2023] [Insert for BHCs or SLHCs: 2040] (this “Senior Subordinated 

Security”) (i) from _________________, or from the most recent interest payment date to which 

interest has been paid or duly provided for, quarterly in arrears [Insert for BHCs or SLHCs: 

(subject to deferral as set forth in Section 6.4(c) of the Agreement)] on February 15, May 15, 

August 15 and November 15 of each year (each such date, an “Interest Payment Date”), 

commencing on _____ _________________, at the rate of 3.1% per annum, until the 

eighth anniversary of the date hereof, provided, however, that [(A)] if a CDFI Event shall have 

occurred and it or any other CDFI Event is continuing at all times, from and after the 180th day 

after the date on which the first CDFI Event occurred until the date on which no CDFI Events are 

continuing, the Interest Rate shall be 7.7% per annum, [To be inserted if Issuer was not a CDFI 

on February 3, 2010: and (B) if a CDFI Event shall have occurred and it or any other CDFI 

Event is continuing, at all times, from and after the 270th day after the date on which the first 

CDFI Event occurred until the date on which no CDFI Events are continuing, 13.8% per annum] 

and (ii) from and after the eighth anniversary of the date hereof, at a rate of 13.8% per annum 

(each such interest rate, the applicable “Interest Rate”) until the principal hereof shall have been 

paid or duly provided for, compounded quarterly, and on any overdue principal and on any 

overdue installment of interest (without duplication and to the extent that payment of such 

interest is enforceable under applicable law) at the same rate per annum. The amount of interest 

payable hereon shall be computed on the basis of a 360-day year comprised of twelve 30-day 

months. 

This Senior Subordinated Security is one of the Senior Subordinated Securities 

referred to in the Letter Agreement and Securities Purchase Agreement – Standard Terms, dated 

as of ________ (as amended, modified or restated from time to time, the “Agreement”), by and 

among the Company and the United States Department of the Treasury, as the initial Investor 

(the “Investor”). Capitalized terms used in this Senior Subordinated Security are defined in the 

Agreement, unless otherwise expressly stated herein. The Senior Subordinated Security is 

entitled to the benefits of the Agreement and is subject to all of the agreements, terms and 
(CDFI Subchapter S Corporation 

Senior Securities) 

 A-4 

conditions contained therein, all of which are incorporated herein by this reference. This Senior 

Subordinated Security may be redeemed, in whole or in part, in accordance with the terms and 

conditions set forth in the Agreement. 

Interest

The interest installment so payable, and punctually paid or duly provided for, on 

any Interest Payment Date will be paid to the person in whose name this Senior Subordinated 

Security is registered at the close of business on the regular record date for such installment of 

interest, which date shall be at the close of business on the 1st calendar day (whether or not a 

business day) of the month in which each Interest Payment Date occurs (each such date, the 

“Regular Record Date”). Any such installment of interest (other than Deferred Interest) not 

punctually paid or duly provided for shall forthwith cease to be payable to the Holders on such 

Regular Record Date and shall be paid to the person in whose name this Senior Subordinated 

Security is registered at the close of business on the date preceding the next Interest Payment 

Date, on the next Interest Payment Date, along with all other amounts then due and payable. In 

no event, however, shall interest exceed the maximum rate permitted by applicable law. 

If an Interest Payment Date or the Maturity Date falls on a day that is not a 

“business day” (as defined in the Agreement), the related payment of principal or interest will be 

paid on the next business day, with the same force and effect as if made on such date, and no 

interest on such payments will accrue from and after such Interest Payment Date or Maturity 

Date, as the case may be. Interest payable on the Maturity Date of the Senior Subordinated 

Securities will be paid to the registered Holder to whom the principal is payable upon 

presentation and surrender for cancellation. 

Method of Payment

The principal of this Senior Subordinated Security shall be payable upon 

surrender hereof and interest on this Senior Subordinated Security shall be payable at the office 

or agency of the Company or an agent appointed for that purpose in any coin or currency of the 

United States of America that at the time of payment is legal tender for payment of public and 

private debts; provided, however, that payment of interest shall be made by the Company to the 

Holders of this Senior Subordinated Security entitled thereto as shown on the Senior 

Subordinated Securities Register by wire transfer of immediately available funds to any account 

with a banking institution located in the United States designated by such Holder no later than 

the related Regular Record Date. 

Subordination

The indebtedness evidenced by this Senior Subordinated Security is, to the extent 

provided in the Agreement, senior to the Common Stock, but subordinate and junior in right of 

payment to the prior payment in full of [Insert for bank and savings associations: all claims of 

depositors and to the Company’s other debt obligations to its general and secured creditors]

[Insert for BHC and SLHC: senior indebtedness of the Company, in accordance with 

applicable holding company regulations of the Appropriate Federal Banking Agency], unless 

such debt obligations are explicitly made pari passu or subordinated to the Senior Subordinated 
(CDFI Subchapter S Corporation 

Senior Securities) 

 A-5 

Securities, if applicable. Each Holder of this Senior Subordinated Security, by accepting the 

same agrees to and shall be bound by such provisions of the Agreement. Each Holder hereof, by 

his or her acceptance hereof, hereby waives all notice of the acceptance of the subordination 

provisions contained herein and in the Agreement by each holder of Senior Indebtedness, 

whether now outstanding or hereafter incurred, and waives reliance by each such holder upon 

said provisions. 

The provisions of this Senior Subordinated Security are continued on the reverse 

side hereof and such provisions shall for all purposes have the same effect as though fully set 

forth at this place. 

IN WITNESS WHEREOF, the Company has caused this instrument to be duly 

executed this ____________ day of ____________, __________. 

[NAME OF COMPANY] 

By: ____________________________________ 

Name: 

Title: 

Attest: 

By: ____________________________________ 

Name: 

Title: 
(CDFI Subchapter S Corporation 

Senior Securities) 

 A-6 

(FORM OF REVERSE OF SECURITY) 

This Senior Subordinated Security is one of the Senior Subordinated Securities of 

the Company (herein sometimes referred to as the “Senior Subordinated Securities”), issued or to 

be issued under and pursuant to a Letter Agreement and Securities Purchase Agreement – 

Standard Terms, dated as of ________, 2010 (as amended, modified or restated from time to 

time, the “Agreement”), by and between the Company and the United States Department of the 

Treasury, as the initial Investor (the “Investor”), to which Agreement reference is hereby made 

for a description of the rights, limitations of rights, obligations, duties and immunities thereunder 

of Company and the Holders of the Senior Subordinated Securities. This Senior Subordinated 

Security is a single series security with a face value in aggregate principal amount as set forth on 

the front of this Senior Subordinated Security. 

Defaults and Remedies

If an Event of Default as provided for in Section 5.1 of the Agreement occurs, 

then the principal of, interest accrued on, and other obligations payable under this Senior 

Subordinated Security and the Transaction Documents, will immediately become due and 

payable. Notwithstanding anything to the contrary herein or in the Agreement, other than 

Section 5.2 of the Agreement, there is no right of acceleration for any default, including a default 

in the payment of principal or interest or the performance of any other covenant or obligation by 

the Company under this Senior Subordinated Security or the Agreement. 

Amendment and Waiver

No amendment, modification, termination or waiver of any provision of the 

Agreement, the Senior Subordinated Securities or any of the other Transaction Documents, or 

consent to any departure by the Company therefrom, shall be effective unless made in writing 

and signed by an officer or a duly authorized representative of the Company and in the case of 

the Senior Subordinated Securities, the Majority Holders; provided that for so long as the Senior 

Subordinated Securities are outstanding, the Investor may at any time and from time to time 

unilaterally amend Section 4.1(e) of the Agreement to the extent the Investor deems necessary, in 

its sole discretion, to comply with, or conform to, any changes after the Signing Date in any 

federal statutes, any rules and regulations promulgated thereunder and any other publications or 

interpretative releases of the Fund governing CDFIs, including, without limitation, any changes 

in the criteria for certification as a CDFI by the Fund; provided further that no amendment, 

modification, termination or waiver with respect to the Senior Subordinated Securities shall, 

unless in writing and signed by all Holders, do any of the following: (A) change the principal of 

or the rate of interest on any Senior Subordinated Security; (B) extend any date fixed for any 

payment of principal or interest; (C) change the definition of the terms “Holders” or “Majority 

Holders” or the percentage of Holders which shall be required for Holders to take any action 

hereunder; or (D) consent to the assignment, delegation or other transfer by the Company of any 

of its rights and obligations under any Transaction Documents. 

Any such consent or waiver by the Holder of this Senior Subordinated Security 

shall be conclusive and binding upon such Holder and upon all future Holders of this Senior 
(CDFI Subchapter S Corporation 

Senior Securities) 

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Subordinated Security and of any Senior Subordinated Security issued in exchange herefor or in 

place hereof (whether by registration of transfer or otherwise), irrespective of whether or not any 

notation of such consent or waiver is made upon this Senior Subordinated Security. 

No reference herein to the Agreement and no provision of this Senior 

Subordinated Security or of the Agreement shall alter or impair the obligation of the Company, 

which is absolute and unconditional, to pay the principal of and interest on this Senior 

Subordinated Security at the time and place and at the rate and in the money herein prescribed. 

Limitation on Dividends and Repurchases of Equity Securities

The Company’s ability to declare and pay dividends and purchase or acquire 

shares of Common Stock, other equity securities, trust preferred securities or any Senior 

Subordinated Security is limited by the terms of the Agreement. The Company’s ability to 

redeem this Senior Subordinated Security is limited by the terms of the Agreement. 

Interest Deferral and Voting Rights

The Company may defer interest paid on the Senior Subordinated Securities, 

subject to the terms and conditions in the Agreement. The Holders of this Senior Subordinated 

Security will be permitted to vote for two directors in the event interest is deferred for eight 

quarters (regardless of whether such quarters are consecutive). [Insert for BHCs or SLHCs: 

Deferral of interest in excess of 20 quarters constitutes an “Event of Default” as defined in the 

Agreement.] 

Denominations; Transfer; Exchange

The Senior Subordinated Securities are issuable only in registered form without 

coupons in minimum denominations of $1,000.00 and integral multiples of $1,000.00 in excess 

thereof. As provided in the Agreement, this Senior Subordinated Security is transferable by the 

Holder hereof on the Senior Subordinated Securities Register maintained by the Company or its 

agent, upon surrender of this Senior Subordinated Security for registration of transfer at the 

office or agency of the Company or its agent, accompanied by a written instrument or 

instruments of transfer in form satisfactory to the Company duly executed by the Holder hereof 

or his or her attorney duly authorized in writing, and thereupon one or more new Senior 

Subordinated Securities of authorized denominations and for the same aggregate principal 

amount will be issued to the designated transferee or transferees. No service charge will be 

made for any such registration of transfer, but the Company may require payment of a sum 

sufficient to cover any tax or other governmental charge payable in relation thereto. 

Prior to due presentment for registration of transfer of this Senior Subordinated 

Security, the Company and any agent thereof may deem and treat the Holder hereof as the 

absolute owner hereof (whether or not this Senior Subordinated Security shall be overdue and 

notwithstanding any notice of ownership or writing hereon made) for the purpose of receiving 

payment of or on account of the principal hereof and (subject to the Agreement) interest due 

hereon and for all other purposes, and none of the Company or any agent thereof shall be 

affected by any notice to the contrary. 
(CDFI Subchapter S Corporation 

Senior Securities) 

 A-8 

No Recourse Against Others

No recourse shall be had for the payment of the principal of or interest on this 

Senior Subordinated Security, or for any claim based hereon, or otherwise in respect hereof, or 

based on or in respect of the Agreement or any other Transaction Document, against any 

incorporator, shareholder, employee, officer or director, as such, past, present or future, as such, 

of the Company or of any successor thereto, whether by virtue of any constitution, statute or rule 

of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, 

by the acceptance hereof and as part of the consideration for the issuance hereof, expressly 

waived and released. 

Governing Law

THE AGREEMENT AND THIS SENIOR SUBORDINATED SECURITY 

SHALL EACH BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE 

FEDERAL LAWS 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. 

Abbreviations

The following abbreviations, when used in the inscription on the face of this 

Senior Subordinated Security, shall be construed as though they were written out in full 

according to applicable laws or regulations: 

TEN CON – as tenants in common TEN ENT – as tenants in the entireties 

JT TEN – as joint tenants with right of survival 

UNIF GIFT MIN ACT – under Uniform Gift to Minors Act and not as 

tenants 

Additional abbreviations may also be used though not in the above list. 
(CDFI Subchapter S Corporation 

Senior Securities) 

 A-9 

ASSIGNMENT 

FOR VALUE RECEIVED, the undersigned hereby assigns and transfers this 

Senior Subordinated Security to: 

 ____________________________________ 

(Assignee’s social security or tax 

identification number) 

 ____________________________________ 

(Address and zip code of assignee) 

and irrevocably appoints ________________ agent to transfer this Senior Subordinated Security 

on the books of the Company. The agent may substitute another to act for him or her. 

Date: ______________________ 

Signature: ______________________________ 

(Sign exactly as your name appears on the other side of this Senior Subordinated Security) 

Signature Guarantee:______________________ 

[Signature must be guaranteed by an “eligible 

guarantor institution” that is a bank, 

stockbroker, savings and loan association or 

credit union meeting the requirements of the 

Registrar, which requirements include 

membership or participation in the Securities 

Transfer Agents Medallion Program 

(“STAMP”) or such other “signature guarantee 

program” as may be determined by the Registrar 

in addition to, or in substitution for, STAMP, all 

in accordance with the Securities Exchange Act 

of 1934, as amended.]