(CDFI Subchapter S Corporation 

Senior Securities) 

 D-1 

ANNEX D 

FORM OF CDCI SENIOR SUBORDINATED SECURITIES

(FORM OF FACE OF SECURITY) 

“THIS CDCI 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 EXCHANGE AGREEMENT – STANDARD TERMS (THE 

“AGREEMENT”), EACH OF WHICH ARE INCORPORATED INTO THIS 

CDCI 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 
(CDFI Subchapter S Corporation 

Senior Securities) 

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LAWS. EACH PURCHASER OF THIS SECURITY IS NOTIFIED THAT THE 

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) 

 D-3 

[NAME OF COMPANY] 

CUSIP No._________ 

$___________ 

3.1% CDCI 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 CDCI Senior Subordinated Security Due [Insert for bank 

or savings associations: 2023] [Insert for BHCs or SLHCs: 2040] (this “CDCI 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 5.4(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 CDCI Senior Subordinated Security is one of the CDCI Senior Subordinated 

Securities referred to in the Letter Agreement and Exchange 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 CDCI Senior Subordinated Security are defined 

in the Agreement, unless otherwise expressly stated herein. The CDCI Senior Subordinated 

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

Senior Securities) 

 D-4 

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

CDCI 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 CDCI 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 CDCI 

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 CDCI 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 CDCI Senior Subordinated Security shall be payable upon 

surrender hereof and interest on this CDCI 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 CDCI 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 CDCI 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 
(CDFI Subchapter S Corporation 

Senior Securities) 

 D-5 

such debt obligations are explicitly made pari passu or subordinated to the CDCI Senior 

Subordinated Securities, if applicable. Each Holder of this CDCI 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 CDCI 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) 

 D-6 

(FORM OF REVERSE OF SECURITY) 

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

Securities of the Company (herein sometimes referred to as the “CDCI Senior Subordinated 

Securities”), issued or to be issued under and pursuant to a Letter Agreement and Exchange 

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 CDCI Senior Subordinated 

Securities. This CDCI Senior Subordinated Security is a single series security with a face value 

in aggregate principal amount as set forth on the front of this CDCI Senior Subordinated 

Security. 

Defaults and Remedies

If an Event of Default as provided for in Section 7.1 of the Agreement occurs, 

then the principal of, interest accrued on, and other obligations payable under this CDCI 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 7.2 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 CDCI Senior Subordinated Security or the Agreement. 

Amendment and Waiver

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

Agreement, the CDCI 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 CDCI Senior Subordinated Securities, the Majority Holders; provided that for 

so long as the CDCI Senior Subordinated Securities are outstanding, the Investor may at any 

time and from time to time unilaterally amend Section 4.1(d) 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 CDCI 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 CDCI 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. 
(CDFI Subchapter S Corporation 

Senior Securities) 

 D-7 

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

Security shall be conclusive and binding upon such Holder and upon all future Holders of this 

CDCI Senior Subordinated Security and of any CDCI 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 CDCI 

Senior Subordinated Security. 

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

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

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

Interest Deferral and Voting Rights

The Company may defer interest paid on the CDCI Senior Subordinated 

Securities, subject to the terms and conditions in the Agreement. The Holders of this CDCI 

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 and SLHCs: Deferral of interest in excess of 20 quarters constitutes an “Event of 

Default” as defined in the Agreement.] 

Denominations; Transfer; Exchange

The CDCI 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 CDCI Senior Subordinated Security is 

transferable by the Holder hereof on the CDCI Senior Subordinated Securities Register 

maintained by the Company or its agent, upon surrender of this CDCI 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 CDCI 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 CDCI 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 CDCI Senior Subordinated Security 

shall be overdue and notwithstanding any notice of ownership or writing hereon made) for the 
(CDFI Subchapter S Corporation 

Senior Securities) 

 D-8 

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. 

No Recourse Against Others

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

CDCI 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 CDCI 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 

CDCI 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) 

 D-9 

ASSIGNMENT 

FOR VALUE RECEIVED, the undersigned hereby assigns and transfers this 

CDCI 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 CDCI 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 CDCI 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.]