Document:

ex10-1.htm

    Exhibit
10.1

     

    SUBSCRIPTION
AGREEMENT

    

    This
Subscription Agreement (“Agreement”) is dated as of April 22, 2009, by and
between Rahaxi Inc., a Nevada corporation (“Company”) and the undersigned
purchaser (“Purchaser”).

    

    1.           Subscription.

    

    (a)  Sale and Issuance of Common
Stock.  Subject to the terms and conditions of this Agreement,
the Company will issue and sell to Purchaser, and Purchaser shall purchase from
the Company: (i) 100,000,000
(One Hundred Million) shares of restricted common
stock (the “Shares” or “Securities”) of the Company at a purchase price of $0.01 (One-Cent) per share,
for an aggregate purchase price (“Purchase Price”) of $1,000,000 (One Million
Dollars). The Shares shall contain the applicable legends set forth
herein and shall be subject to resale restrictions in accordance with Rule 144
promulgated under the U.S. Securities Act of 1933, as amended (“Act”), and in
accordance with the terms and conditions of this Subscription
Agreement.  All currency references in this Agreement are to U.S.
Dollars.

     

    (b)  Closing.  The
closing (Closing”) of the purchase and sale of the Securities shall take place
concurrently with the execution of this Agreement.  At the Closing,
the Purchaser shall wire transfer to the Company immediately available funds
equal to the Purchase Price and the Company shall promptly issue instructions to
its transfer agent to issue the Shares set forth in Section 1(a) above to
Purchaser.  If Purchaser fails to consummate the Closing for any
reason, other than a breach by the Company of the express terms of this
Agreement, then the Company shall have full legal recourse and all remedies
under applicable law including the right to cancel all shares issued under the
Agreement and to seek monetary damages or specific
performance.  Purchaser’s obligation to pay the Purchase Price and
affect the Closing is not contingent upon any minimum price of the Company’s
common stock on the OTC Bulletin Board as of the Closing.

     

    2.   Representations
by Purchaser.

    

    The
Purchaser represents and warrants as follows:

    

    (a)  Purchaser
has read and carefully reviewed the Company’s public filings made with the U.S.
Securities and Exchange Commission (“SEC”) for periods covering at least the
prior 18 months (“SEC Filings”); has read this Subscription Agreement (including
any and all amendments and addendums thereto) and the Exhibits thereto relating
to the offering of the Securities, and has relied only on the information
contained therein or otherwise provided to him in writing by the Company, and
agrees to be bounds by all the terms contained therein.  Without
limiting the foregoing, the Purchaser acknowledges that Purchaser has read the
Risk Factors contained in the SEC Filings.

    

    (b)  Purchaser
understands that he is subscribing for the Securities without being furnished
any offering material other than as set forth in Section 2(a) above, and that
Purchaser has had an opportunity to obtain additional information in writing
concerning the terms and conditions of this offering, the Company, and any other
matters relating directly or in directly to this purchase of the Securities, or
as may be necessary to verify the accuracy of the information contained in the
SEC Filings or as otherwise provided in writing.

    

    (c)  Purchaser
understands that the Securities have not been registered under the Act pursuant
to Regulation S promulgated thereunder by the SEC relating to the offer and sale
of securities outside the United States, and Purchaser has no right to require
such registration (legends will be placed on any certificates evidencing the
Securities with respect to restrictions on distribution, transfer, resale,
assignment or subdivision of the Securities imposed by federal securities
laws).  Purchaser understands that the Securities are characterized as
"restricted securities" under the Act inasmuch as they are being acquired from
the Company in a transaction not involving a public offering and that under the
Act and applicable regulations thereunder such securities may be resold without
registration under the Act only in certain limited circumstances.  In
this connection, such Purchaser represents that Purchaser is familiar with Rule
144 under the Act as presently in effect, and understands the resale
limitations, including volume limitations, imposed thereby and by the
Act.  In addition, Purchaser understands that the SEC has not approved
or disapproved these securities, nor has it passed upon or endorsed the merits
of this offering, or the accuracy or adequacy of the documents provided by the
Company.

    

    (d)  The
Securities are being purchased him for Purchaser’s own account, as principal,
for investment and not with the view toward or for resale in connection with the
distribution of a security.

    

    (e)  Purchaser
or Purchaser’s agents or investment advisers have such knowledge and experience
and financial and business matters that will enable Purchaser to utilize
information of made available to Purchaser in connection with the offering of
the Securities to evaluate the risks of the prospective investment and to make
an informed investment decision.

    

    (f)  Purchaser
recognizes that the Company has a history of significant losses, has never
generated a profit, and that the Securities as an investment involve a high
degree of risk.

    

    (g)  Purchaser
understands that Purchaser’s right to transfer the Securities will be
restricted, which include restrictions against transfers unless the transfer is
not in violation of the Act, and all other applicable securities
laws.  Purchaser realizes that the Securities cannot be readily resold
under the Act, and therefore Purchaser must not purchase the Securities unless
Purchaser has liquid assets sufficient to assure Purchaser that such purchases
will cause Purchaser no undue financial difficulties and that Purchaser can
still provide for Purchaser’s current needs and possible personal
contingencies.

    

    (h)  All
information which Purchaser has provided to the Company concerning Purchaser,
Purchaser’s financial position and knowledge of financial and business matters
is correct and complete as of the date set forth at the end
hereof.  The Purchaser hereby agrees to indemnify, defend and hold
harmless the Company and all of its shareholders, officers, directors,
affiliates and advisors from any and all damages, losses, liabilities, costs and
expenses (including reasonable attorney’s fees) that they may incur by reason of
the Purchaser’s failure to fulfill all of the terms and conditions of this
Agreement or by reason of the untruth or inaccuracy of any of the
representations, warranties or agreements contained herein or in any other
documents he has furnished to any of the Company in connection with this
transaction.  This indemnification includes, but is not limited to,
any damages, losses, liabilities, costs and expenses (including reasonable
attorney’s fees) incurred by the Company or any of its shareholders, officers,
directors, affiliates or advisors defending against any alleged violation of
federal or state securities laws which is based upon or related to any untruth
or inaccuracy of any of Purchaser’s representations, warranties or agreements
contained herein or in any other documents he has furnished to any of the
foregoing in connection with this transaction.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (i)  The
Purchaser understands and agrees that:  (i) Purchaser may not transfer
or assign this Agreement, or any interest herein, and any purported transfer
shall be void;  (ii) Purchaser hereby acknowledges and agrees that
Purchaser is not entitled to cancel, terminate or revoke the Agreement and that
this Agreement will be binding on Purchaser’s heirs, successors and personal
representatives;  (iii) this Agreement constitutes the entire
agreement among the parties hereto with respect to the sale of the Securities
and may be amended, modified or terminated only by writing executed by all
parties (except as provided herein with respect to rejection of this Agreement
by the Company);  (iv) within five (5) days after receipt of a written
request from the Company, the Purchaser agrees to provide such information and
to execute and deliver such documents as may be reasonably necessary to comply
with any and all laws and regulations to which the Company is subject; and (v)
the representations and warranties of the Purchaser set forth herein shall
survive the sale of the Securities pursuant to this Agreement.

    

    (j)  At
no time was the Purchaser presented with or solicited by any publicly issued or
circulated newspaper, mail, radio, television or other form of general
advertising or solicitation in connection with the offer, sale and purchase of
the Securities.

    

    (k)  Other
than the amount Purchaser is subscribing for as set froth in Section 1 hereof,
no minimum amount is required to be sold in order to effect the
Closing.  The Company will require additional funding to continue as a
going concern and fund working capital.  No assurance can be made that
such additional funds will be available to the Company.

    

    (l)   Purchaser
acknowledges that Purchaser understands that the Company has in the past, and
expects to in the future, continue to issue shares of common stock to investors,
as well as to consultants, employees, officers and directors.  The
Company has in the past, and expects to in the future, use stock issuances in
lieu of cash payments to certain consultants, vendors, employees and other
parties. Such issuances are made in the sole discretion of the Board of
Directors and may substantially and materially dilute the Purchaser’s ownership
in the Company.

    

    (m) No
director, officer, agent or employee of Company or any other person has at any
time expressly or implicitly represented, guaranteed, or warranted to it, him or
her that (a) Purchaser may freely transfer the Securities, (b) that a percentage
of profit or amount or type of consideration will be realized as a result of an
investment in the Securities, (c) that past performance or experience on the
part of the directors, officers, agents or employees of Company or any other
person in any way indicates the predictable results of the ownership of the
Securities or of Company's overall business, (d) that any cash distributions
from Company's operations or otherwise will be made to the Purchaser by any
specific date or will be made at all, (e) that any specific tax benefits will
accrue as a result of an investment in Company or (f) that the Company’s common
stock price will be at or above the per share purchase price set forth in
Section 1(a) above at or following the Closing.

    

    (n)  Purchaser
is an “accredited investor” as defined in Rule 501 promulgated under the
Act.

    

    (o)  Purchaser
is duly incorporated, domiciled and in good standing in the Isle of Man.
Purchaser, and Purchaser’s legal counsel, are familiar with Regulation S under
the Act.  Purchaser is not a United States person and is located
outside of the U.S.

    

    3.    Legends.  It is
understood that the certificates evidencing the Securities will bear a legend
substantially similar to the following:

     

    THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY OTHER
JURISDICTIONS AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM.  THE ISSUER OF THESE SECURITIES MAY REQUIRE AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE
EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND
ANY APPLICABLE STATE SECURITIES LAWS

    

    4.    SEC Reporting; Compliance with
Applicable Law.  Purchaser represents and warrants that it, and
its legal counsel, are familiar with U.S. securities law, including, without
limitation, the provisions of Sections 13 and 16 of the Exchange Act of 1934, as
amended, and the rules promulgated thereunder.  Purchaser covenants
that it shall, at all times following the Closing, comply with applicable U.S.
law and securities filings requirements, including the complete, accurate and
timely filing of all required reports, including Forms 3, 4 and 5 under Section
16, and Schedule 13D under Section 13 of the Exchange Act.

     

    5.    General Provisions.

     

    (a)           Governing Law;
Venue.  This Agreement will be governed by and construed in
accordance with the laws of the State of Nevada, without giving effect to that
body of laws pertaining to conflict of laws.  With respect to any
dispute, proceeding, claim or controversy arising out of this Agreement or
related to this Agreement, each party hereby consents to the jurisdiction and
exclusive venue of the federal courts in Clark County, Nevada, and waives any
objection or defense based on forum non conveniens or any other claims relating
to venue.

     

    (b)           Counterparts.  This
Agreement may be executed in any number of counterparts, including facsimile
signatures, each of which when so executed and delivered will be deemed an
original, and all of which together shall constitute one and the same
agreement.

     

    (c)           Amendments and
Waivers.  This Agreement may be amended and the observance of
any term of this Agreement may be waived, only with the written consent of the
Company and the Purchaser.

     

    (d)           Severability.  If
any provision of this Agreement is determined by any court of competent
jurisdiction to be invalid, illegal or unenforceable in any respect, such
provision will be enforced to the maximum extent possible given the intent of
the parties hereto.  If such clause or provision cannot be so
enforced, such provision shall be stricken from this Agreement and the remainder
of this Agreement shall be enforced as if such invalid, illegal or unenforceable
clause or provision had (to the extent not enforceable) never been contained in
this Agreement.  Notwithstanding the forgoing, if the value of this
Agreement based upon the substantial benefit of the bargain for any party is
materially impaired, which determination as made by the presiding court or
arbitrator of competent jurisdiction shall be binding, then both parties agree
to substitute such provision(s) through good faith negotiations.

     

    (e)           Entire
Agreement.  This Agreement, together with all the Exhibits
hereto, constitute the entire agreement and understanding of the parties with
respect to the subject matter of this Agreement, and supersede any and all prior
understandings and agreements, whether oral or written, between or among the
parties hereto with respect to the specific subject matter hereof.

     

    (f)           Adjustments for Stock
Splits, Etc.  Wherever in this Agreement there is a reference
to a specific number of shares of Common Stock of the Company of any class or
series, then, upon the occurrence of any subdivision, combination or stock
dividend of such class or series of stock, the specific number of shares so
referenced in this Agreement shall automatically be proportionally adjusted to
reflect the affect on the outstanding shares of such class or series of stock by
such subdivision, combination or stock dividend.

     

    (g)           Third
Parties.  Nothing in this Agreement, express or implied, is
intended to confer upon any person, other than the parties hereto and their
successors and assigns, any rights or remedies under or by reason of this
Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Executed
this 22nd day of April, 2009.

    

    PURCHASER:

    PENDLE
PROPERTIES LIMITED,

    an Isle
of Man corporation

    

    

    By                                                      By                                                      

         G.
Watterson,
Director                                                   
H. Parsons, Director

    

    

    

    

    SUBSCRIPTION
ACCEPTED:

    

    RAHAXI
INC.,

    a Nevada
corporation

    

    

    By:_______________________________

    Name:
Paul Egan, PresidentOrder to Cease and Desist between Security Bank of Bibb County

 Exhibit 10.1 
 FEDERAL DEPOSIT INSURANCE CORPORATION 
 WASHINGTON, D.C. 

					
	  
	 		    	
		 	)	    	
	In the Matter of	 	)	    	
		 	)	    	ORDER TO
	SECURITY BANK OF BIBB COUNTY	 	)	    	CEASE AND DESIST
	MACON, GEORGIA	 	)	    	
		 	)	    	FDIC-09-050b
	(INSURED STATE NONMEMBER BANK)        	 	)	    	
	  
	 	)	    	

 Security Bank of Bibb County, Macon, Georgia (“Bank”), having been advised of its right
to a NOTICE OF CHARGES AND OF HEARING detailing the unsafe or unsound banking practices and violations of law and/or regulations alleged to have been committed by the Bank and of its right to a hearing on the alleged charges under section 8(b)(1) of
the Federal Deposit Insurance Act (“Act”), 12 U.S.C. § 1818(b)(1), and having waived those rights, entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF AN ORDER TO CEASE AND DESIST (“CONSENT AGREEMENT”) with a
representative for the Legal Division of the Federal Deposit Insurance Corporation (“FDIC”) and the Commissioner (the “Commissioner”) for the State of Georgia, Department of Banking and Finance (the “Department”), dated
the 3rd day of April, 2009, whereby solely for the purpose of this proceeding and without admitting or denying the alleged charges of unsafe or unsound banking practices and violations of law and/or regulations, the Bank consented to the issuance of
an ORDER TO CEASE AND DESIST (“ORDER”) by the FDIC and the Commissioner. The Commissioner may issue an order to cease and desist pursuant to Official Code of Georgia Annotated § 7-1-91(1985). 

 The FDIC and the Commissioner considered the matter and determined that they have reason to believe that
the Bank has engaged in unsafe or unsound banking practices and has committed violations of law and/or regulations. The FDIC and the Commissioner, therefore, accepted the CONSENT AGREEMENT and issued the following: 
 ORDER TO CEASE AND DESIST 
 IT
IS HEREBY ORDERED, that the Bank, its institution-affiliated parties, as that term is defined in section 3(u) of the Act, 12 U.S.C. § 1813(u), and its successors and assigns cease and desist from the following unsafe and unsound banking
practices and violations of law and/or regulation: 
  

	 	(a)	operating with a board of directors (“Board) that has failed to provide adequate supervision over and direction to the management of the Bank; 

  

	 	(b)	operating with management whose policies and practices are detrimental to the Bank and jeopardize the safety of its deposits; 

  

	 	(c)	operating with a large volume of poor quality loans; 

  

	 	(d)	following hazardous lending and lax collection policies and practices; 

  

	 	(e)	operating in such a manner as to produce operating losses; 

  

	 	(f)	operating with inadequate equity capital in relation to the volume and quality of assets held by the Bank 

  

	 	(g)	operating with inadequate provisions for liquidity and funds management; 

  

	 	(h)	operating with inadequate allowance for loan and lease losses (“ALLL”); 

  

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	 	(i)	operating in violation of laws and/or regulations, and in contravention of statements of policy as more fully described on pages 19 through 22 of the Report of Examination of the
Bank dated March 10, 2008 (“Report”). 

 IT IS FURTHER ORDERED, that the Bank, its institution-affiliated
parties, and its successors and assigns, take affirmative action as follows: 
 BOARD OF DIRECTORS 
 1. Beginning with the effective date of this ORDER, the Board shall increase its participation in the affairs of the Bank, assuming full responsibility for the approval
of sound policies and objectives and for the supervision of all of the Bank’s activities, consistent with the role and expertise commonly expected for directors of banks of comparable size. This participation shall include meetings to be held
no less frequently than monthly at which, at a minimum, the following areas shall be reviewed and approved: reports of income and expenses; new, overdue, renewal, insider, charged-off, and recovered loans; investment activity; operating policies;
and individual committee actions. Board minutes shall document these reviews and approvals, including the names of any dissenting directors. 
 COMPLIANCE WITH ORDER 
 2. Within 30 days from the effective date of this ORDER, the Board shall establish a Board committee
(“Directors’ Committee”), consisting of at least four members, to oversee the Bank’s compliance with the ORDER. Three of the members of the Directors’ Committee shall not be officers of the Bank. The Directors’
Committee shall receive from Bank management monthly reports detailing the Bank’s actions with respect to compliance with the ORDER. The Directors’ Committee shall present a report 

  

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detailing the Bank’s adherence to the ORDER to the Board at each regularly scheduled Board meeting. Such report shall be recorded in the appropriate
minutes of the Board’s meeting and shall be retained in the Bank’s records. Establishment of this committee, does not in any way diminish the responsibility of the entire Board to ensure compliance with the provisions of this ORDER.

 MANAGEMENT 
 3. (a) Within 60
days from the effective date of this ORDER, the Bank shall have and retain qualified management. Each member of management shall have qualifications and experience commensurate with his or her duties and responsibilities at the Bank. Each member of
management shall be provided appropriate written authority from the Bank’s Board, with such authority recorded in the Board minutes, to implement the provisions of this ORDER. Management shall include: 
 (i) a chief executive officer with proven ability in managing a bank of comparable size and complexity and in effectively implementing lending,
investment and operating policies in accordance with sound banking practices; 
 (ii) a senior lending officer with a significant amount of
appropriate lending, collection, and loan supervision experience, and experience in upgrading a low quality loan portfolio; and 
 (iii) a
chief operations officer with a significant amount of appropriate experience in managing the operations of a bank of similar size and complexity in accordance with sound banking practices. 
 (b) The qualifications of management shall be assessed on its ability to: 
 (i) comply with the requirements of this ORDER; 
  

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 (ii) operate the Bank in a safe and sound manner; 
 (iii) comply with applicable laws and regulations; and 
 (iv) restore all aspects of the Bank to a safe and sound condition, including asset quality, earnings, capital adequacy, management effectiveness, risk management, liquidity and sensitivity to market risk. 

(c) During the life of this ORDER, the Bank shall notify the FDIC’s Atlanta Regional Office (“Regional Director”) and the Commissioner
(collectively, “Supervisory Authorities”) as determined at subsequent examinations and/or visitations in writing when it proposes to add any individual to the Bank’s Board or employ any individual as a senior executive officer, as
that term is defined in section 303.102 of the FDIC’s Rules and Regulations, 12 C.F.R. § 303.102. The notification should include a description of the background and experience of the individual or individuals to be added or employed and
must be received at least 30 days before such addition or employment is intended to become effective. If the Regional Director issues a notice of disapproval pursuant to section 32 of the Act, 12 U.S.C. § 1831i, with respect to any proposed
individual, then such individual may not be added or employed by the Bank. 
 CAPITAL 
 4. (a) Within 30 days from the effective date of this ORDER, the Bank shall have Tier 1 capital in such an amount as to equal or exceed eight (8%) percent of
the Bank’s total assets. Thereafter, during the life of this ORDER, the Bank shall maintain Tier 1 capital in such an amount as to equal or exceed eight (8%) percent of the Bank’s total assets. 
  

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 (b) Within 30 days from the effective date of this ORDER, the Bank shall develop and adopt a plan to meet
the minimum risk-based capital requirements for a well-capitalized bank, as described in the FDIC Statement of Policy on Risk-Based Capital contained in Appendix A to Part 325 of the FDIC’s Rules and Regulations, 12 C.F.R. Part 325, Appendix A.
The Plan shall be in a form and manner acceptable to the Supervisory Authorities as determined at subsequent examinations and/or visitations. 
 (c) The level of Tier 1 capital to be maintained during the life of this ORDER pursuant to Subparagraph 4(a) shall be in addition to a fully funded ALLL, the adequacy of which shall be satisfactory to the Supervisory Authorities as
determined at subsequent examinations and/or visitations. 
 (d) Any increase in Tier 1 capital necessary to meet the requirements of
Paragraph 4(a) of this ORDER may not be accomplished through a reduction from the Bank’s ALLL. 
 (e) For the purposes of this ORDER,
the terms “Tier 1 capital” and “total assets” shall have, the meanings ascribed to them in Part 325 of the FDIC’s Rules and Regulations, 12 C.F.R. §§ 325.2(v) and 325.2(x). 
 ALLOWANCE FOR LOAN AND LEASE LOSSES 
 5. Within
30 days from the effective date of this ORDER, the Board shall review the adequacy of the ALLL and establish a comprehensive policy for determining the adequacy of the ALLL. For the purpose of this determination, the adequacy of the ALLL shall be
determined after the charge-off of all loans or other items classified “Loss”. The policy shall provide for a review of the ALLL at least once each calendar quarter. Said review should be completed at least ten (10) days prior to the
end of each quarter, in 

  

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order that the findings of the Board with respect to the ALLL may be properly reported in the quarterly Reports of Condition and Income. The review should
focus on the results of the Bank’s internal loan review, loan and lease loss experience, trends of delinquent and non-accrual loans, an estimate of potential loss exposure of significant credits, concentrations of credit, and present and
prospective economic conditions. A deficiency in the ALLL shall be remedied in the calendar quarter it is discovered, prior to submitting the Report of Condition, by a charge to current operating earnings. The minutes of the Board meeting at which
such review is undertaken shall indicate the results of the review. The Bank’s policy for determining the adequacy of the ALLL and its implementation shall be satisfactory to the Supervisory Authorities as determined at subsequent examinations
and/or visitations. 
 LIQUIDITY AND FUNDS MANAGEMENT 
 6. (a) Within 60 days from the effective date of this ORDER, the Bank shall review, revise and adopt its written liquidity, contingency funding and funds management policy to provide effective guidance and
control over the Bank’s funds management activities, which policy shall include, at a minimum, revisions to address all items of criticism enumerated on pages 7 through 9 of the Report. Such policy and its implementation shall be in a form and
manner acceptable to the Supervisory Authorities as determined at subsequent examinations and/or visitations. The revised policy shall provide for a periodic review of the Bank’s deposit structure. Such review shall include the volume and trend
of total deposits and the volume and trend of the various types of deposits offered, the maturity distribution of time deposits, rates being paid on each type of deposit, rates being paid by trade area competition, caps on large time deposits,
public funds, out-of-area deposits, and any other information needed. 
  

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 (b) Within 60 days from the effective date of this ORDER, the Bank shall implement adequate models for
managing liquidity. 
 (c) The Bank shall calculate monthly the liquidity and dependency ratios, following the format utilized internally,
and provide the calculations to the Board for review with such review noted in the Board minutes. 
 BROKERED DEPOSITS

 7. (a) Upon the effective date of this ORDER, the Bank shall not increase the amount of brokered deposits above the amount outstanding on
that date. 
 (b) Within 10 days of the effective date of this ORDER, the Bank shall submit to the Supervisory Authorities a written plan for
eliminating its reliance on brokered deposits. The plan should contain details such as the current composition of brokered deposits by maturity and explain the means by which such deposits will be paid or rolled over. The Supervisory Authorities
shall have the right to reject the Bank’s plan for utilizing brokered deposits and may request periodic progress reports on the level, source, and use of brokered deposits within the Bank’s plan. For purposes of this ORDER, brokered
deposits are defined as described in section 337.6 of the FDIC’s Rules and Regulations. 12 C.F.R. § 337.6. 
 CASH DIVIDENDS

 8. The Bank shall not pay cash dividends without the prior written consent of the Supervisory Authorities. 
  

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 CHARGE-OFF AND REDUCTION OF CLASSIFIED ITEMS 
 9. (a) Immediately upon the effective date of this ORDER, the Bank shall eliminate from its books, by charge-off or collection, all assets or portions of assets
classified “Loss” that have not been previously collected or charged off. Elimination of these assets through proceeds of other loans made by the Bank is not considered collection for purposes of this paragraph. 
 (b) Additionally, while this ORDER remains in effect, the Bank shall, within 30 days of the receipt of any official Report of Examination of the Bank
from the Supervisory Authorities, eliminate from its books, by collection, charge-off, or other proper entries, the remaining balance of any assets classified “Loss” unless otherwise approved in writing by the Supervisory Authorities.

 (c) (i) Within 180 days from the effective date of this ORDER, the Bank shall have reduced the assets classified
“Substandard” in the Report by 25%. 
 (ii) Within 360 days from the effective date of this ORDER, the Bank shall have reduced the
assets classified “Substandard” in the Report by 45%. 
 (iii) Within 540 days from the effective date of this ORDER, the Bank
shall have reduced the assets classified “Substandard” in the Report by 60%. 
 (d) The requirements of this paragraph are not to
be construed as standards for future operation of the Bank. Following compliance with the reduction schedule, the Bank shall continue to reduce the total volume of adversely classified assets. Reduction of these assets through proceeds of other
loans made by the Bank is not considered collection for the purpose of this paragraph. As used in Subparagraph 9(c), the word “reduce” means: 
 (i) to collect; 
  

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 (ii) to charge-off; or 
 (iii) to sufficiently improve the quality of assets adversely classified to warrant removing any adverse classification, as determined by the Supervisory Authorities. 
 NO ADDITIONAL CREDIT 
 10. (a) Beginning
with the effective date of this ORDER, the Bank shall not extend, directly or indirectly, any additional credit to, or for the benefit of, any borrower who has a loan or other extension of credit from the Bank that has been charged off or
classified, in whole or in part, “Loss” or “Doubtful” and is uncollected. The requirements of this paragraph shall not prohibit the Bank from renewing (after collection in cash of interest due from the borrower) any credit
already extended to any borrower. 
 (b) Additionally, during the life of this ORDER, the Bank shall not extend, directly or indirectly, any
additional credit to, or for the benefit of, any borrower who has a loan or other extension of credit from the Bank that has been classified, in whole or part, “Substandard”, or is listed for “Special Mention” and is uncollected.

 (c) Subparagraph 10(b) shall not apply if the Bank’s failure to extend further credit to a particular borrower would be detrimental
to the best interests of the Bank. Prior to the extending of any additional credit pursuant to this paragraph, either in the form of a renewal, extension, or further advance of funds, such additional credit shall be approved by a majority of the
Board, or a designated committee thereof, who shall certify, in writing: 
 (i) why the failure of the Bank to extend such credit would be
detrimental to the best interests of the Bank; 
  

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 (ii) that the Bank’s position would be improved thereby; including an explanatory statement of how
the Bank’s position would be improved; and 
 (iii) an appropriate workout plan has been developed and will be implemented in
conjunction with the additional credit to be extended. 
 (d) The signed certification shall be made a part of the minutes of the Board or
designated committee, and a copy of the signed certification shall be retained in the borrower’s credit file. 
 LENDING AND
COLLECTION POLICIES 
 11. (a) Within 90 days from the effective date of this ORDER, the Bank shall revise, adopt, and implement a written
lending, underwriting and collection policy to provide effective guidance and control over the Bank’s lending function, which policy shall include, at a minimum, revisions to address criticisms and recommendations enumerated on page 5 and 6 of
the Report pertaining to the administration of acquisition, development and construction (“ADC”) loans as well as commercial real estate lending and specific guidelines for placing loans on a nonaccrual basis. In addition, the Bank shall
obtain adequate and current documentation for all loans in the Bank’s loan portfolio. Such policy and its implementation shall be in a form and manner acceptable to the Supervisory Authorities as determined at subsequent examinations and/or
visitations. 
 (b) Within 30 days from the effective date of this ORDER, the Board shall adopt and implement a policy limiting the use of
loan interest reserves. Such policy shall confine the use of interest reserves to properly underwritten ADC loans where 

  

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development or building plans have specific timetables that commence within a reasonable time of the loan’s approval and that include realistic
completion dates. Interest reserves shall be used only for payment of interest on ADC loans for projects that are progressing according to their timetables. Interest reserves may be supplemented only with the prior written approval of the Board or a
committee thereof, so long as the approval documents a prudent reason for the supplement. 
 REDUCE CONCENTRATIONS OF CREDIT 

 12. Within 90 days from the effective date of this ORDER, the Bank shall develop a written plan and policy for systematically reducing the Bank’s
portfolio of loans or other extensions of credit advanced or committed, directly or indirectly, to or for the benefit of any borrowers noted on pages 25 through 54 of the Report. At a minimum, the plan shall include: 
 (i) amounts and percent of capital to which the Bank shall reduce each concentration; 
 (ii) time-frames for achieving the reduction in dollar levels identified in response to Subparagraph 12(a)(i); 
 (iii) provisions for the submission of monthly, written progress reports to the Board for review and notation in the minutes of its meetings; and

 (iv) procedures for monitoring the Bank’s compliance with the plan. 
 PLAN FOR EXPENSES AND PROFITABILITY 
 13. (a) Within 60 days from the effective date
of this ORDER, the Bank shall formulate and fully implement a written plan and a comprehensive budget for all categories of income and expense. The plan and budget required by this paragraph shall 

  

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include formal goals and strategies, consistent with sound banking practices and taking into account the Bank’s other written policies, to improve the
Bank’s net interest margin, increase interest income, reduce discretionary expenses, control overhead, and improve and sustain earnings of the Bank. The plan shall include a projected balance sheet and a description of the operating assumptions
that form the basis for and adequately support major projected income and expense components. Thereafter, the Bank shall formulate such a plan and budget by November 30 of each subsequent year. The plan and budget required by Subparagraph 13(a)
of this ORDER shall be acceptable to the Supervisory Authorities as determined at subsequent examinations and/or visitations. 
 (b)
Following the end of each calendar quarter, the Board shall evaluate the Bank’s actual performance in relation to the plan and budget required by Subparagraph 13(a) of this ORDER and shall record the results of the evaluation, and any actions
taken by the Bank, in the minutes of the Board meeting at which such evaluation is undertaken. 
 WRITTEN STRATEGIC PLAN

 14. Within 90 days from the effective date of this ORDER, the Bank shall prepare and submit to the Supervisory Authorities its written strategic
plan consisting of long-term goals designed to improve the condition of the Bank and its viability and strategies for achieving those goals. The plan shall be in a form and manner acceptable to the Supervisory Authorities, but at a minimum shall
cover three years and provide specific objectives for asset growth, market focus, earnings projections, capital needs, and liquidity position. 
  

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 VIOLATIONS OF LAW AND 
 CONTRAVENTIONS OF STATEMENTS OF POLICY 
 15. Within 60 days from the effective date of
this ORDER, the Bank shall eliminate and/or correct all violations of law and regulations, which are more fully set out on pages 19 through 22 of the Report. Within 60 days from the effective date of this ORDER, the Bank shall also correct all
contraventions of FDIC Statements of Policy which are referenced on page 9 of the Report and listed more particularly among the violations of law set out on pages 19 through 22 of the Report. In addition, the Bank shall take all necessary steps to
ensure future compliance with all applicable laws, regulations and statements of policy. 
 DISCLOSURE 
 16. Following the effective date of this ORDER, the Bank shall send to its shareholders or otherwise furnish a description of this ORDER in conjunction with the
Bank’s next shareholder communication and also in conjunction with its notice or proxy statement preceding the Bank’s next shareholder meeting. The description shall fully describe the ORDER in all material respects. The description and
any accompanying communication, statement, or notice shall be sent to the FDIC, Registration and Disclosure Section, Washington, D.C. 20429 and the Commissioner, Georgia Department of Banking and Finance, 2990 Brandywine Rd., Suite 200, Atlanta,
Georgia 30341-5565, at least fifteen (15) days prior to dissemination to shareholders. Any changes requested to be made by the FDIC and Commissioner shall be made prior to dissemination of the description, communication, notice, or statement.

  

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 PROGRESS REPORTS 
 17. Within 30 days of the end of the first quarter following the effective date of this ORDER, and within 30 days of the end of each quarter thereafter, the Bank shall furnish written progress reports to the
Supervisory Authorities detailing the form and manner of any actions taken to secure compliance with this ORDER and the results thereof. Such reports shall include a copy of the Bank’s Report of Condition and the Bank’s Report of Income.
Such reports may be discontinued when the corrections required by this ORDER have been accomplished and the Supervisory Authorities have released the Bank in writing from making further reports. 
 This ORDER shall become effective immediately from the date of its issuance. The provisions of this ORDER shall remain effective and enforceable except
to the extent that, and until such time as, any provisions of this ORDER shall have been modified, terminated, suspended, or set aside by the FDIC. Pursuant to delegated authority. 
 Dated at Atlanta, Georgia, this 17th day of April, 2009. 
  

	
	 

	Mark S. Schmidt
	Regional Director
	Atlanta Region
	Federal Deposit Insurance Corporation

  

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 The Georgia Department of Banking and Finance having duly approved the foregoing ORDER, and the Bank,
through its Board, agree that the issuance of said ORDER by the FDIC shall be binding as between the Bank and the Georgia Commissioner of Banking and Finance to the same degree and to the same legal effect that such ORDER would be binding if the
Department had issued a separate ORDER that included and incorporated all of the provisions of the foregoing ORDER, pursuant to Official Code of Georgia Annotated § 7-1-91(1985). 
 Dated this     of April, 2009. 
  

	
	 

	Robert M. Braswell
	Commissioner
	Department of Banking and Finance
	State of Georgia

  

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