a44fnbcapitaltrustguaran






GUARANTEE AGREEMENT  FIRST NATIONAL BANKSHARES CORPORATION  Dated as of February 26, 2004  . DOCSDC1:177614.4  





 






TABLE OF CONTENTS  ARTICLE I  DEFINITIONS AND INTERPRETATION  Page  SECTION 1.1. Definitions and Interpretation ........................................................................... ii  ARTICLE II  POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE  SECTION 2.1 Powers and Duties of the Guarantee Trustee ..................................................... 4  SECTION 2.2 Certain Rights of the Guarantee Trustee ............................................................ 6  SECTION 2.3 Not Responsible for Recitals or Issuance of Guarantee ..................................... 8  SECTION 2.4 Events of Default; Waiver. ................................................................................. 8  SECTION 2.5 Events of Default; Notice ................................................................................... 8  ARTICLE III  THE GUARANTEE TRUSTEE  SECTION 3 .I The Guarantee Trustee; Eligibility ..................................................................... 8  SECTION 3.2 Appointment, Removal and Resignation of the Guarantee Trustee ................... 9  ARTICLEN  GUARANTEE  SECTION 4.1 Guarantee ......................................................................................................... 10  SECTION 4.2 Waiver of Notice and Demand ......................................................................... 10  SECTION 4.3 Obligations Not Affected ................................................................................. 10  SECTION 4.4 Rights of Holders ............................................................................................. 11  SECTION 4.5 Guarantee of Payment ...................................................................................... 12  SECTION 4.6 Subrogation ...................................................................................................... 12  SECTION 4.7 Independent Obligations .................................................................................. 12  SECTION 4.8 Enforcement ..................................................................................................... 12  ARTICLEV  LIMITATION OF TRANSACTIONS; SUBORDINATION  SECTION 5.1 Limitation ofTransactions ............................................................................... 13  SECTION 5.2 Ranking ............................................................................................................ 13  ARTICLE VI  TERMINATION  SECTION 6.1 Termination ...................................................................................................... 14  I  DOCSDC1:177614.4  





 






ARTICLE VII  INDEMNIFICATION  SECTION 7.1 Exculpation ...................................................................................................... 14  SECTION 7.2 Indemnification ................................................................................................ 14  SECTION 7.3 Compensation; Reimbursement of Expenses ................................................... 15  ARTICLE VITT  MISCELLANEOUS  SECTION 8.1 Successors and Assigns .................................................................................... 16  SECTION 8.2 Amendments .................................................................................................... 16  SECTION 8.3 Notices ............................................................................................................. 16  SECTION 8.4 Benefit .............................................................................................................. 17  SECTION 8.5 Governing Law ................................................................................................ 17  SECTION 8.6 Counterparts ...................................................................................................... 17  GUARANTEE AGREEMENT  This GUARANTEE AGREEMENT (the "Guarantee"), dated as of February 26,  2004, is executed and delivered by First National Bankshares Corporation, a bank holding  company incorporated in West Virginia (the "Guarantor"), and Wilmington Trust Company, a  Delaware banking corporation, as trustee (the "Guarantee Trustee"), for the benefit of the  Holders (as defined herein) from time to time of the Capital Securities (as defined herein) of  FNB Capital Trust One, a Delaware statutory trust (the "Issuer").  WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the  "Declaration"), dated as of February 26, 2004, among the trustees named therein of the Issuer,  First National Bankshares Corporation, as sponsor, and the Holders from time to time of  undivided beneficial interests in the assets of the Issuer, the Issuer is issuing on the date hereof  securities, having an aggregate liquidation amount of up to $6,000,000, designated the Capital  Securities (the "Capital Securities"); and  WHEREAS, as incentive for the Holders to purchase the Capital Securities, the  Guarantor desires irrevocably and unconditionally to agree, to the extent set forth in this  Guarantee, to pay to the Holders of Capital Securities the Guarantee Payments (as defined  herein) and to make certain other payments on the terms and conditions set forth herein.  NOW, THEREFORE, in consideration of the purchase by each Holder of the  Capital Securities, which purchase the Guarantor hereby agrees shall benefit the Guarantor, the  Guarantor executes and delivers this Guarantee for the benefit of the Holders.  ARTICLE I  DEFINITIONS AND INTERPRETATION  · SECTION 1.1. Definitions and Intemretation.  In this Guarantee, unless the context otherwise requires:  11  DOCSDC1:!77614.4  





 






(a) capitalized terms used in this Guarantee but not defined in the preamble above  have the respective meanings assigned to them in this Section 1.1;  (b) a term defined anywhere in this Guarantee has the same meaning throughout;  ( c) all references to "the Guarantee" or "this Guarantee" are to this Guarantee as  modified, supplemented or amended from time to time;  (d) all references in this Guarantee to Articles and Sections are to Articles and  Sections of this Guarantee, unless otherwise specified;  ( e) terms defined in the Declaration as of the date of execution of this Guarantee  have the same meanings when used in this Guarantee, unless otherwise defined in this  Guarantee or unless the context otherwise requires; and  (f) a reference to jhe singular includes the plural and vice versa.  "Beneficiaries" means any Person to whom the Issuer is or hereafter becomes  indebted or liable.  "Corporate Trust Office" means the office of the Guarantee Trustee at which the  corporate trust business of the Guarantee Trustee shall, at any particular time, be principally  administered, which office at the date of execution of this Guarantee is located at Rodney Square  North, 1100 North Market Street, Wilmington, Delaware 19890-0001.  "Covered Person" means any Holder of Capital Securities.  "Debentures" means the junior subordinated debentures of First National  Bankshares Corporation, designated the Floating Rate Junior Subordinated Debt Securities due  2034, held by the Institutional Trustee (as defined in the Declaration) of the Issuer.  "Event of Default" has the meaning set forth in Section 2.4.  "Guarantee Payments" means the following payments or distributions, without  duplication, with respect to the Capital Securities, to the extent not paid or made by the Issuer: (i)  any accrued and unpaid Distributions (as defined in the Declaration) which are required to be  paid on such Capital Securities to the extent the Issuer has funds available in the Property  Account (as defined in the Declaration) therefor at such time, (ii) the Redemption Price (as  defined in the Indenture) to the extent the Issuer has funds available in the Property Account  therefor at such time, with respect to the Capital Securities at maturity or any Capital Securities  called for redemption by the Issuer, (iii) the Special Redemption Price (as defmed in the  Indenture) to the extent the Issuer has funds available in the Property Account therefor at such  time, with respect to Capital Securities called for redemption upon the occurrence of a Special  Event (as defined in the Indenture), and (iv) upon a voluntary or involuntary liquidation,  dissolution, winding-up or termination of the Issuer (other than in connection with the  ·-distribution of Debentures to the Holders of the Capital Securities in exchange therefor as  provided in the Declaration), the lesser of(a) the aggregate of the liquidation amount and all  accrued and unpaid Distributions on the Capital Securities to the date of payment, to the extent  2  DOCSDC1:177614.4  





 






the Issuer has funds available in the Property Account therefor at such time, and (b) the amount  of assets of the Issuer remaining available for distribution to Holders in liquidation of the Issuer  after satisfaction ofliabilities to creditors of the Issuer as required by applicable law (in either  case, the "Liquidation Distribution").  "Guarantee Trustee" means Wilmington Trust Company, until a Successor  Guarantee Trustee has been appointed and has accepted such appointment pursuant to the terms  of this Guarantee and thereafter means each such Successor Guarantee Trustee.  "Holder" means any holder, as registered on the books and records of the Issuer,  of any Capital Securities; provided, however, that, in determining whether the holders of the  requisite percentage of Capital Securities have given any request, notice, consent or waiver  hereunder, "Holder" shall not include the Guarantor or any Affiliate of the Guarantor.  "Indemnified Person" means the Guarantee Trustee (including in its individual  capacity), any Affiliate of the Guarantee Trustee, or any officers, directors, shareholders,  members, partners, employees, representatives, nominees, custodians or agents of the Guarantee  Trustee.  "Indenture" means the Indenture, dated as of February 26, 2004, between the  Guarantor and Wilmington Trust Company, not in its individual capacity but solely as trustee,  and any indenture supplemental thereto pursuant to which the Debentures are to be issμed to the  Institutional Trustee of the Issuer.  "Liquidation Distribution" has the meaning set forth in the definition of  "Guarantee Payments" herein.  "Majority in liquidation amount of the Capital Securities" means Holder(s) of  outstanding Capital Securities, voting together as a class, but separately from the holders of  Common Securities, of more than 50% of the aggregate liquidation amount (including the stated  amount that would be paid on redemption, liquidation or otherwise, plus accrued and unpaid  Distributions to, but excluding, the date upon which the voting percentages are determined) of all  Capital Securities then outstanding.  "Obligations" means any costs, expenses or liabilities (but not including liabilities  related to taxes) of the Issuer, other than obligations of the Issuer to pay to holders of any Trust  Securities the amounts due such holders pursuant to the terms of the Trust Securities.  "Officer's Certificate" means, with respect to any Person, a certificate signed by  one Authorized Officer of such Person. Any Officer's Certificate delivered with respect to  compliance with a condition or covenant provided for in this Guarantee shall include:  (a) a statement that each officer signing the Officer's Certificate has read the  covenant or condition and the definitions relating thereto;  (b) a brief statement of the nature and scope of the examination or investigation  undertaken by each officer in rendering the Officer's Certificate;  3  DOCSDC1:177614.4  





 






(c) a statement that each such officer has made such examination or investigation  as, in such officer's opinion, is necessary to enable such officer to express an informed  opinion as to whether or not such covenant or condition has been complied with; and  ( d) a statement as to whether, in the opinion of each such officer, such condition  or covenant has been complied with.  "Person" means a legal person, including any individual, corporation, estate,  partnership, joint venture, association, joint stock company, limited liability company, trust,  unincorporated association, or government or any agency or political subdivision thereof, or any  other entity of whatever nature.  "Responsible Officer" means, with respect to the Guarantee Trustee, any officer  within the Corporate Trust Office of the Guarantee Trustee with direct responsibility for the  administration of any matters relating to this Guarantee, including any vice president, any  assistant. vice president, any secretary, any assistant secretary, the treasurer, any assistant  treasurer, any trust officer or other officer of the Corporate Trust Office of the Guarantee Trustee  customarily performing functions similar to those performed by any of the above designated  officers and also means, with respect to a particular corporate trust matter, any other officer to  whom such matter is referred because of that officer's knowledge of and familiarity with the  particular subject.  "Successor Guarantee Trustee" means a successor Guarantee Trustee possessing  the qualifications to act as Guarantee Trustee under Section 3. !.  "Trust Securities" means the Common Securities and the Capital Securities.  ARTICLE II  POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE  SECTION 2.1. Powers and Duties of the Guarantee Trustee.  (a) This Guarantee shall be held by the Guarantee Trustee for the benefit of the  Holders of the Capital Securities, and the Guarantee Trustee shall not transfer this  Guarantee to any Person except a Holder of Capital Securities exercising his or her rights  pursuant to Section 4.4(b) or to a Successor Guarantee Trustee on acceptance by such  Successor Guarantee Trustee of its appointment to act as Successor Guarantee Trustee.  The right, title and interest of the Guarantee Trustee shall automatically vest in any  Successor Guarantee Trustee, and such vesting and cessation of title shall be effective  whether or not conveyancing documents have been executed and delivered pursuant to  the appointment of such Successor Guarantee Trustee.  (b) If an Event of Default actually known to a Responsible Officer of the  Guarantee Trustee has occurred and is continuing, the Guarantee Trustee shall enforce  this Guarantee for the benefit of the Holders of the Capital Securities.  ( c) The Guarantee Trustee, before the occurrence of any Event of Default and  after the curing or waiving of all Events of Default that may have occurred, shall  4  DOCSDC1:177614.4  





 






undertake to perform only such duties as are specifically set forth in this Guarantee, and  no implied covenants shall be read into this Guarantee against the Guarantee Trustee. In  case an Event of Default has occurred (that has not been cured or waived pursuant to  Section 2.4(b )) and is actually known to a Responsible Officer of the Guarantee Trustee,  the Guarantee Trustee shall exercise such of the rights and powers vested in it by this  Guarantee, and use the same degree of care and skill in its exercise thereof, as a prudent  person would exercise or use under the circumstances in the conduct of his or her own  affairs. ·  (d) No provision of this Guarantee shall be construed to relieve the Guarantee  Trustee from liability for its own negligent action, its own negligent failure to act, or its  own willful misconduct, except that:  DOCSDC1:177614.4  (i) prior to the occurrence of any Event of Default and after the curing or  waiving of all Events of Default that may have occurred:  (A) the duties and obligations of the Guarantee Trustee shall be  determined solely by the express provisions ofthis Guarantee, and the  Guarantee Trustee shall not be liable except for the performance of such  duties and obligations as are specifically set forth in this Guarantee, and  no implied covenants or obli¥ations shall be read into this Guarantee  against the Guarantee Trustee; and  (B) in the absence of bad faith on the part of the Guarantee  Trustee, the Guarantee Trustee may conclusively rely, as to the truth of the  statements and the correctness of the opinions expressed therein, upon any  certificates or opinions furnished to the Guarantee Trustee and conforming  to the requirements of this Guarantee; but in the case of any such  certificates or opinions furnished to the Guarantee Trustee, the Guarantee  Trustee shall be under a duty to examine the same to determine whether or  not on their face they conform to the requirements of this Guarantee;  (ii) the Guarantee Trustee shall not be liable for any error of judgment  made in good faith by a Responsible Officer of the Guarantee Trustee, unless it  shall be proved that such Responsible Officer of the Guarantee Trustee or the  Guarantee Trustee was negligent in ascertaining the pertinent facts upon which  such judgment was made;  (iii) the Guarantee Trustee shall not be liable with respect to any action  taken or omitted to be taken by it in good faith in accordance with the written  direction of the Holders of not less than a Majority in liquidation amount of the  Capital Securities relating to the time, method and place of conducting any.  proceeding for any remedy available to the Guarantee Trustee, or exercising any  trust or power conferred upon the Guarantee Trustee under this Guarantee; and  (iv) no provision of this Guarantee shall require the Guarantee Trustee to  expend or risk its own funds or otherwise incur personal financial liability in the  5  





 






performance of any of its duties or in the exercise of any of its rights or powers, if  the Guarantee Trustee shall have reasonable grounds for believing that the  repayment of such funds is not reasonably assured to it under the terms of this  Guarantee, or security and indemnity, reasonably satisfactory to the Guarantee  Trustee, against such risk or liability is not reasonably assured to it.  SECTION 2.2. Certain Rights of the Guarantee Trustee.  DOCSDC1:177614.4  (a) Subject to the provisions of Section 2.1:  (i) The Guarantee Trustee may conclusively rely, and shall be fully  protected in acting or refraining from acting upon, any resolution, certificate,  statement, instrument, opinion, report, notice, request, direction, consent, order,  bond, debenture, note, other evidence of indebtedness or other paper or document  believed by it to be genuine and to have been signed, sent or presented by the  proper party or parties.  (ii) Any direction or act of the Guarantor contemplated by this Guarantee  shall be sufficiently evidenced by an Officer's Certificate.  (iii) Whenever, in the administration of this Guarantee, the Guarantee  Trustee shall deem it desirable that a matter be proved or established before  taking, suffering or omitting any action hereunder, the Guarantee Trustee (unless  other evidence is herein specifically prescribed) may, in the absence of bad faith  on its part, request and conclusively rely upon an Officer's Certificate of the  Guarantor which, upon receipt of such request, shall be promptly delivered by the  Guarantor.  (iv) The Guarantee Trustee shall have no duty to see to any recording,  filing or registration of any instrument or other writing (or any rerecording,  refiling or reregistration thereof).  (v) The Guarantee Trustee may consult with counsel of its selection, and  the advice or opinion of such counsel with respect to legal matters shall be full  and complete authorization and protection in respect of any action taken, suffered  or omitted by it hereunder in good faith and in accordance with such advice or  opinion. Such counsel may be counsel to the Guarantor or any of its Affiliates  and may include any of its employees. The Guarantee Trustee shall have the right  at any time to seek instructions concerning the administration of this Guarantee  from any court of competent jurisdiction.  (vi) The Guarantee Trustee shall be under no obligation to exercise any of  the rights or powers vested in it by this Guarantee at the request or direction of  any Holder, unless such Holder shall have provided to the Guarantee Trustee such  security and indemnity, reasonably satisfactory to the Guarantee Trustee, against  the costs, expenses (including attorneys' fees and expenses and the expenses of  the Guarantee Trustee's agents, nominees or custodians) and liabiiities that might  be incurred by it in complying with such request or direction, including such  6  





 






reasonable advances as may be requested by the Guarantee Trustee; provided,  however, that nothing contained in this Section 2.2(a)(vi) shall be taken to relieve  the Guarantee Trustee, upon the occurrence of an Event of Default, of its  obligation to exercise the rights and powers vested in it by this Guarantee.  (vii) The Guarantee Trustee shall not be bound to make any investigation  into the facts or matters stated in any resolution, certificate, statement, instrument,  opinion, report, notice, request, direction, consent, order, bond, debenture, note,  other evidence of indebtedness or other paper or document, but the Guarantee  Trustee, in its discretion, may make such further inquiry or investigation into such  facts or matters as it may see fit.  (viii) The Guarantee Trustee may execute any of the trusts or powers  hereunder or perform any duties hereunder either directly or by or through agents,  nominees, custodians or attorneys, and the Guarantee Trustee shall not be  responsible for any misconduct or negligence on the part of any agent or attorney  appointed with due care by it hereunder.  (ix) Any action taken by the Guarantee Trustee or its agents hereunder  shall bind the Holders of the Capital Securities, and the signature of the Guarantee  Trustee or its agents alone shall be sufficient and effective to perform any such  action. No third party shall be required to inquire as to the authority of the  Guarantee Trustee to so act or as to its compliance with any of the terms and  provisions of this Guarantee, both of which shall be conclusively evidenced by  the Guarantee Trustee's or its agent's taking such action.  (x) Whenever in the administration of this Guarantee the Guarantee  Trustee shall deem it desirable to receive instructions with respect to enforcing  any remedy or right or taking any other action hereunder, the Guarantee Trustee  (A) may request instructions from the Holders of a Majority in liquidation amount  of the Capital Securities, (B) may refrain from enforcing such remedy or right or  taking such other action until such instructions are received and (C) shall be  protected in conclusively relying on or acting in accordance with such  instructions.  (xi) The Guarantee Trustee shall not be liable for any action taken,  suffered, or omitted to be taken by it in good faith and reasonably believed by it to  be authorized or within the discretion or rights or powers conferred upon it by this  Guarantee.  (b) No provision of this Guarantee shall be deemed to impose any duty or  obligation on the Guarantee Trustee to perform any act or acts or exercise any right,  power, duty or obligation conferred or imposed on it, in any jurisdiction in which it shall  be illegal or in which the Guarantee Trustee shall be unqualified or incompetent in  accordance with applicable law to perform any such act or acts or to exercise any such  right, power, duty or obligation. No permissive power or authority available to the  Guarantee Trustee shall be construed to be a duty.  7  DOCSDC1:177614.4  





 






SECTION 2.3. Not Responsible for Recitals or Issuance of Guarantee.  The recitals contained in this Guarantee shall be taken as the statements of the  Guarantor, and the Guarantee Trustee does not assume any responsibility for their correctness.  The Guarantee Trustee makes no representation as to the validity or sufficiency of this  Guarantee.  SECTION 2.4. Events of Default; Waiver.  (a) An Event of Default under this Guarantee will occur upon the failure of the  Guarantor to perform any of its payment or other obligations hereunder.  (b) The Holders of a Majority in liquidation amount of the Capital Securities  may, voting or consenting as a class, on behalf of the Holders of all of the Capital  Securities, waive any past Event of Default and its consequences. Upon such waiver, any  such Event of Default shall cease to exist, and shall be deemed to have been cured, for  every purpose of this Guarantee, but no such waiver shall extend to any subsequent or  other default or Event of Default or impair any right consequent thereon.  SECTION 2.5. Events of Default; Notice.  (a) The Guarantee Trustee shall, within 90 days after the occurrence of an Event  of Default, transmit by mail, first class postage prepaid, to the Holders of the Capital  Securities, notices of all Events of Default actually known to a Responsible Officer of the  Guarantee Trustee, unless such defaults have been cured before the giving of such notice,  provided, however, that the Guarantee Trustee shall be protected in withholding such  notice if and so long as a Responsible Officer of the Guarantee Trustee in good faith  determines that the withholding of such notice is in the interests of the Holders of the  Capital Securities.  (b) The Guarantee Trustee shall not be charged with knowledge of any Event of  Default unless the Guarantee Trustee shall have received written notice thereof from the  Guarantor or a Holder of the Capital Securities, or a Responsible Officer of the Guarantee  Trustee charged with the administration of this Guarantee shall have actual knowledge  thereof.  ARTICLE III  THE GUARANTEE TRUSTEE  SECTION 3.1. The Guarantee Trustee; Eligibility.  DOCSDC1:177614.4  (a) There shall at all times be a Guarantee Trustee which shall:  (i) not be an Affiliate of the Guarantor; and  (ii) be a corporation or national association organized and doing business  under the laws of the United States of America or any State or Territory thereof or  of the District of Columbia, or Person authorized under such laws to exercise  8  





 






corporate trust powers, having a combined capital and surplus of at least 50  million U.S. dollars ($50,000,000), and subject to supervision or examination by  Federal, State, Territorial or District of Columbia authority. If such corporation  or national association publishes reports of condition at least armually, pursuant to  law or to the requirements of the supervising or examining authority referred to  above, then, for the purposes of this Section 3.l(a)(ii), the combined capital and  surplus of such corporation or national association shall be deemed to be its  combined capital and surplus as set forth in its most recent report of condition so  published.  (b) If at any time the Guarantee Trustee shall cease to be eligible to so act under  Section 3.l(a), the Guarantee Trustee shall immediately resign in the marmer and with the  effect set forth in Section 3.2(c).  ( c) If the Guarantee Trustee has or shall acquire any "conflicting interest" within  the meaning of Section 31 O(b) of the Trust Indenture Act, the Guarantee Trustee shall  either eliminate such interest or resign to the extent and in the marmer provided by, and  subject to, this Guarantee.  SECTION 3.2. Appointment, Removal and Resignation of the Guarantee Trustee.  (a) Subject to Section 3.2(b), the Guarantee Trustee maybe appointed or  removed without cause at any time by the Guarantor except during an Event of Default.  (b) The Guarantee Trustee shall not be removed in accordance with Section  3.2(a) until a Successor Guarantee Trustee has been appointed and has accepted such  appointment by written instrument executed by such Successor Guarantee Trustee and  delivered to the Guarantor.  ( c) The Guarantee Trustee appointed to office shall hold office until a Successor  Guarantee Trustee shall have been appointed or until its removal or resignation. The  Guarantee Trustee may resign from office (without need for prior or subsequent  accounting) by an instrument in writing executed by the Guarantee Trustee and delivered  to the Guarantor, which resignation shall not take effect until a Successor Guarantee  Trustee has been appointed and has accepted such appointment by an instrument in  writing executed by such Successor Guarantee Trustee and delivered to the Guarantor  and the resigning Guarantee Trustee.  ( d) If no Successor Guarantee Trustee shall have been appointed and accepted  appointment as provided in this Section 3 .2 within 60 days after delivery of an instrument  ofremoval or resignation, the Guarantee Trustee resigning or being removed may  petition any court of competent jurisdiction for appointment of a Successor Guarantee  Trustee. Such court may thereupon, after prescribing such notice, if any, as it may deem  proper, appoint a Successor Guarantee Trustee.  (e) No Guarantee Trustee shall be liable for the acts or omissions to act of any  Successor Guarantee Trustee.  9  DOCSDCl:l 77614.4  





 






(f) Upon termination of this Guarantee or removal or resignation of the  Guarantee Trustee pursuant to this Section 3 .2, the Guarantor shall pay to the Guarantee  Trustee all amounts owing to the Guarantee Trustee under Sections 7.2 and 7 .3 accrued to  the date of such termination, removal or resignation.  SECTION 4.1. Guarantee.  ARTICLE IV  GUARANTEE  (a) The Guarantor irrevocably and unconditionally agrees to pay in full to the  Holders the Guarantee Payments (without duplication of amounts theretofore paid by the  Issuer), as and when due, regardless of any defense (except as defense of payment by the  Issuer), right of set-off or counterclaim that the Issuer may have or assert. The  Guarantor's obligation to make a Guarantee Payment may be satisfied by direct payment  of the required amounts by the Guarantor to the Holders or by causing the Issuer to pay  such amounts to the Holders.  (b) The Guarantor hereby also agrees to assume any and all Obligations of the  Issuer and in the event any such Obligation is not so assumed, subject to the terms and  conditions hereof, the Guarantor hereby irrevocably and unconditionally guarantees to  each Beneficiary the full payment, when and as due, of any and all Obligations to such  Beneficiaries. This Guarantee is intended to be for the Beneficiaries who have received  notice hereof.  SECTION 4.2. Waiver ofNotice and Demand.  The Guarantor hereby waives notice of acceptance of this Guarantee and of any  liability to which it applies or may apply, presentment, demand for payment, any right to require  a proceeding first against the Issuer or any other Person before proceeding against the Guarantor,  protest, notice of nonpayment, notice of dishonor, notice of redemption and all other notices and  demands.  SECTION 4.3. Obligations Not Affected.  The obligations, covenants, agreements and duties of the Guarantor under this  Guarantee shall in no way be affected or impaired by reason of the happening from time to time  of any of the following:  (a) the release or waiver, by operation of law or otherwise, of the performance or  observance by the Issuer of any express or implied agreement, covenant, term or  condition relating to the Capital Securities to be performed or observed by the Issuer;  (b) the extension of time for the payment by the Issuer of all or any portion of the  Distributions, Redemption Price, Special Redemption Price, Liquidation Distribution or  any other sums payable under the terms of the Capital Securities or the extension of time  for the performance of any other obligation under, arising out of, or in connection with,  the Capital Securities (other than an extension of time for the payment of the  10  DOCSDCl :177614.4  





 






Distributions, Redemption Price, Special Redemption Price, Liquidation Distribution or  other sums payable that results .from the extension of any interest payment period on the  Debentures or any extension of the maturity date of the Debentures permitted by the  Indenture);  (c) any failure, omission, delay or lack of diligence on the part of the Holders to  enforce, assert or exercise any right, privilege, power or remedy conferred on the Holders  pursuant to the terms of the Capital Securities, or any action on the part of the Issuer  granting indulgence or extension of any kind;  (d) the voluntary or involuntary liquidation, dissolution, sale of any collateral,  receivership, insolvency, bankruptcy, assignment for the benefit of creditors,  reorganization, arrangement, composition or readjustment of debt of, or other similar  proceedings affecting, the Issuer or any of the assets of the Issuer;  ( e) any invalidity of, or defect or deficiency in, the Capital Securities;  (f) the settlement or compromise of any obligation guaranteed hereby or hereby  incurred; or  (g) any other circumstance whatsoever that might otherwise constitute a legal or  equitable discharge or defense of a guarantor, it being the intent of this Section 4.3 that  the obligations of the Guarantor hereunder shall be absolute and unconditional under any  and all circumstances.  There shall be no obligation of the Holders to give notice to, or obtain consent of,  the Guarantor with respect to the happening of any of the foregoing.  SECTION 4.4. Rights of Holders.  (a) The Holders of a Majority in liquidation amount of the Capital Securities have  the right to direct the time, method and place of conducting any proceeding for any  remedy available to the Guarantee Trustee in respect of this Guarantee or to direct the  exercise of any trust or power conferred upon the Guarantee Trustee under this  Guarantee; provided, however, that (subject to Sections 2.1and2.2) the Guarantee  Trustee shall have the right to decline to follow any such direction if the Guarantee  Trustee shall determine that the actions so directed would be unjustly prejudicial to the  Holders not taking part in such direction or if the Guarantee Trustee being advised by  counsel determines that the action or proceeding so directed may not lawfully be taken or  if the Guarantee Trustee in good faith by its board of directors or trustees, executive  committee or a trust committee of directors or trustees and/or Responsible Officers shall  determine that the action or proceeding so directed would involve the Guarantee Trustee  in personal liability.  (b) Any Holder of Capital Securities may institute a legal proceeding directly  against the Guarantor to enforce the Guarantee Trustee's rights under this Guarantee,  without first instituting a legal proceeding against the Issuer, the Guarantee Trustee or  any other Person. The Guarantor waives any right or remedy to require that any such  11  DOCSDCl:l77614.4  





 






action be brought first against the Issuer, the Guarantee Trustee or any other Person·  before so proceeding directly against the Guarantor.  SECTION 4.5. Guarantee of Payment.  This Guarantee creates a guarantee of payment and not of collection.  SECTION 4.6. Subrogation.  The Guarantor shall be subrogated to all (if any) rights of the Holders of Capital  Securities against the Issuer in respect of any amounts paid to such Holders by the Guarantor  under this Guarantee; provided, however, that the Guarantor shall not (except to the extent  required by applicable provisions oflaw) be entitled to enforce or exercise any right that it may  acquire by way of subrogation or any indemnity, reimbursement or other agreement, in all cases  as a result of payment under this Guarantee, if, after giving effect to any such payment, any  amounts are due and unpaid under this Guarantee. If any amount shall be paid to the Guarantor  in violation of the preceding sentence, the Guarantor agrees to hold such amount in trust for the  Holders and to pay over such amount to the Holders.  SECTION 4.7. Independent Obligations.  The Guarantor acknowledges that its obligations hereunder are independent of the  obligations of the Issuer with respect to the Capital Securities and that the Guarantor shall be  liable as principal and as debtor hereunder to make Guarantee Payments pursuant to the terms of  this Guarantee notwithstanding the occurrence of any event referred to in subsections (a) through  (g), inclusive, of Section 4.3 hereof.  SECTION 4.8. Enforcement.  A Beneficiary may enforce the Obligations of the Guarantor contained in Section  4.1 (b) directly against the Guarantor, and the Guarantor waives any right or remedy to require  that any action be brought against the Issuer or any other person or entity before proceeding  against the Guarantor.  The Guarantor shall be subrogated to all rights (if any) of ~y Beneficiary against  the Issuer in respect of any amounts paid to the Beneficiaries by the Guarantor under this  Guarantee; provided, however, that the Guarantor shall not (except to the extent required by  applicable provisions oflaw) be entitled to enforce or exercise any rights that it may acquire by  way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a result  of payment under this Guarantee, if, after giving effect to such payment, any amounts are due  and unpaid under this Guarantee.  12  DOCSDC1:177614.4  





 






ARTICLEV  LIMITATION OF TRANSACTIONS; SUBORDINATION  SECTION 5 .1. Limitation of Transactions.  So long as any Capital Securities remain outstanding, if (a) there shall have  occurred and be continuing an Event of Default or (b) the Guarantor shall have selected an  Extension Period as provided in the Declaration and such period, or any extension thereof, shall  have commenced and be continuing, then the Guarantor may not (x) declare or pay any  dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment with  respect to, any of the Guarantor's capital stock or (y) make any payment of principal of or  interest or premium, if any, on or repay, repurchase or redeem any debt securities of the  Guarantor that rank pari passu in all respects with or junior in interest to the Debentures (other  than (i) payments under this Guarantee, (ii) repurchases, redemptions or other acquisitions of  shares of capital stock of the Guarantor (A) in connection with any employment contract, benefit  plan or other similar arrangement with or for the benefit of one or more employees, officers,  directors, or consultants, (B) in connection with a dividend reinvestment or stockholder stock  purchase plan or (C) in connection with the issuance of capital stock of the Guarantor (or  securities convertible into or exercisable for such capital stock), as consideration in an  acquisition transaction entered into prior to the occurrence of the Event of Default or the  applicable Extension Period, (iii) as a result of any exchange or conversion of any class or series  of the Guarantor's capital stock (or any capital stock of a subsidiary of the Guarantor) for any  class or series of the Guarantor's capital stock or of any class or series of the Guarantor's  indebtedness for any class or series of the Guarantor's capital stock, (iv) the purchase of  fractional interests in shares of the Guarantor's capital stock pursuant to the conversion or  exchange provisions of such capital stock or the security being converted or exchanged, (v) any  declaration of a dividend in connection with any stockholder's rights plan, or the issuance of  rights, stock or other property under any stockholder's rights plan, or the redemption or  repurchase of rights pursuant thereto, or (vi) any dividend in the form of stock, warrants, options  or other rights where the dividend stock or the stock issuable upon exercise of such warrants,  options or other rights is the same stock as that on which the dividend is being paid or ranks pari  passu with or junior to such stock).  SECTION 5.2. Ranking.  This Guarantee will constitute an unsecured obligation of the Guarantor and will  rank subordinate and junior in right of payment to all present and future Senior Indebtedness (as  defined in the Indenture) of the Guarantor. By their acceptance thereof, each Holder of Capital  Securities agrees to the foregoing provisions of this Guarantee and the other terms set forth  herein.  The right of the Guarantor to participate in any distribution of assets of any of its  subsidiaries upon any such subsidiary's liquidation or reorganization or otherwise is subject to  the prior claims of creditors of that subsidiary, except to the extent the Guarantor may itself be  . .i:eGpgnized as a creditor of that subsidiary. Accordingly, the Guarantor's obligations under this  Guarantee will be effectively subordinated to all existing and future liabilities of the Guarantor's  subsidiaries, and claimants should look only to the assets of the Guarantor for payments  13  DOCSDCl:!77614.4  





 






thereunder. This Guarantee does not limit the incurrence or issuance of other secured or  unsecured debt of the Guarantor, including Senior Indebtedness of the Guarantor, under any  indenture or agreement that the Guarantor may enter into in the future or otherwise.  SECTION 6.1. Termination.  ARTICLE VI  TERMINATION  This Guarantee shall terminate as to the Capital Securities (i) upon full payment  of the Redemption Price or the Special Redemption Price, as the case may be, of all Capital .  Securities then outstanding, (ii) upon the distribution of all of the Debentures to the Holders of  all of the Capital Securities or (iii) upon full payment of the amounts payable in accordance with  the Declaration upon dissolution of the Issuer. This Guarantee will continue to be effective or  will be reinstated, as the case may be, if at any time any Holder of Capital Securities must restore  payment of any sums paid under the Capital Securities or under this Guarantee.  SECTION 7 .1. Exculpation.  ARTICLE VII  INDEMNIFICATION  (a) No Indemnified Person shall be liable, responsible or accountable in damages  or otherwise to the Guarantor or any Covered Person for any loss, damage or claim  incurred by reason of any act or omission of such Indemnified Person in good faith in  accordance with this Guarantee and in a manner that such Indemnified Person reasonably  believed to be within the scope of the authority conferred on such Indemnified Person by  this Guarantee or by law, except that an Indemnified Person shall be liable for any such  loss, damage or claim incurred by reason of such Indemnified Person's negligence or  willful misconduct with respect to such acts or omissions.  (b) An Indemnified Person shall be fully protected in relying in good faith upon  the records of the Issuer or the Guarantor and upon such information, opinions, reports or  statements presented to the Issuer or the Guarantor by any Person as to matters the  Indemnified Person reasonably believes are within such other Person's professional or  expert competence and who, if selected by such Indemnified Person, has been selected  with reasonable care by such Indemnified Person, including information, opinions,  reports or statements as to the value and amount of the assets, liabilities, profits, losses, or  any other facts pertinent to the existence and amount of assets from which Distributions  to Holders of Capital Securities might properly be paid.  SECTION 7.2. Indemnification.  (a) The Guarantor agrees to indemnify each Indemnified Person for, and to hold  each Indemnified Person harmless against, any and all loss, liability, damage, claim or  expense incurred without negligence or willful misconduct on the part of the Indemnified  Person, arising out of or in connection with the acceptance or administration of the trust  or trusts hereunder, including but not limited to the costs and expenses (including  14  DOCSDC1:177614.4  





 






reasonable lega,1 fees and expenses) of the Indemnified Person defending itself against, or  investigating, any claim or liability in connection with the exercise or performance of any  of the Indemnified Person's powers or duties hereunder. The obligation to indemnify as  set forth in this Section 7 .2 shall survive the resignation or removal of the Guarantee  Trustee and the termination of this Guarantee.  (b) Promptly after receipt by an Indemnified Person under this Section 7 .2 of  notice of the commencement of any action, such Indemnified Person will, if a claim in  respect thereof is to be made against the Guarantor under this Section 7 .2, notify the  Guarantor in writing of the commencement thereof; but the failure so to notify the  Guarantor (i) will not relieve the Guarantor from liability under paragraph (a) above  unless and to the extent that the Guarantor did not otherwise learn of such action and such  failure results in the forfeiture by the Guarantor of substantial rights and defenses and  (ii) will not, in any event, relieve the Guarantor from any obligations to any Indemnified  Person other than the indemnification obligation provided in paragraph (a) above. The  Guarantor shall be entitled to appoint counsel of the Guarantor's choice at the  Guarantor's expense to represent the Indemnified Person in any action for which  indemnification is sought (in which case the Guarantor shall not thereafter be responsible  for the fees and expenses of any separate counsel retained by the Indemnified Person or  Persons except as set forth below); provided, however, that such counsel shall be  satisfactory to the Indemnified Person. Notwithstanding the Guarantor's election to  appoint counsel to represent the Indemnified Person in any action, the Indemnified  Person shall have the right to employ separate counsel (including local counsel), and the  Guarantor shall bear the reasonable fees, costs and expenses of such separate counsel, if  (i) the use of counsel chosen by the Guarantor to represent the Indemnified Person would  present such counsel with a conflict of interest, (ii) the actual or potential defendants in,  or targets of, any such action include both the Indemnified Person and the Guarantor and  the Indemnified Person shall have reasonably concluded that there may be legal defenses  available to it and/or other Indemnified Persons which are different from or additional to  those available to the Guarantor, (iii) the Guarantor shall not have employed counsel  satisfactory to the Indemnified Person to represent the Indemnified Person within a  reasonable time after notice of the institution of such action or (iv) the Guarantor shall  authorize the Indemnified Person to employ separate counsel at the expense of the  Guarantor. The Guarantor will not, without the prior written consent of the Indemnified  Persons, settle or compromise or consent to the entry of any judgment with respect to any  pending or threatened claim, action, suit or proceeding in respect of which  indemnification or contribution may be sought hereunder (whether or not the Indemnified  Persons are actual or potential parties to such claim or action) unless such settlement,  compromise or consent includes an unconditional release of each Indemnified Person  from all liability arising out of such claim, action, suit or proceeding.  SECTION 7.3. Compensation; Reimbursement of Expenses.  The Guarantor agrees:  (a) to pay to the Guarantee Trustee from time to time such compensation for all  services rendered by it hereunder as the parties shall agree to from time to time (which  15  DOCSDCl:l77614.4  





 






compensation shall not be limited by any provision oflaw in regard to the compensation of a  trustee of an express trust); and  (b) except as otherwise expressly provided herein, to reimburse the Guarantee  Trustee upon request for all reasonable expenses, disbursements and advances incurred or made  by it in accordance with any provision of this Guarantee (including the reasonable compensation  and the expenses and disbursements of its agents and counsel), except any such expense,  disbursement or advance as may be attributable to its negligence or willful misconduct.  The provisions of this Section 7.3 shall survive the resignation or removal of the  Guarantee Trustee and the termination of this Guarantee.  ARTICLE VIII  MISCELLANEOUS  SECTION 8.1. Successors and Assigns.  All guarantees and agreements contained in this Guarantee shall bind the  succe_ssors, assigns, receivers, trustees and representatives of the Guarantor and shall inure to the  benefit of the Holders of the Capital Securities then outstanding. Except in connection with any  merger or consolidation of the Guarantor with or into another entity or any sale, transfer or lease  of the Guarantor's assets to another entity, in each case to the extent permitted under the  Indenture, the Guarantor may not assign its rights or delegate its obligations under this Guarantee  without the prior approval of the Holders of not less than a Majority in liquidation amount of the  Capital Securities.  SECTION 8.2. Amendments.  Except with respect to any changes that do not adversely affect the rights of  Holders of the Capital Securities in any material respect (in which case no consent of Holders  will be required), this Guarantee may be amended only with the prior approval of the Holders of  not Jess than a Majority in liquidation amount of the Capital Securities. The provisions of the  Declaration with respect to amendments thereof shall apply equally with respect to amendments  of the Guarantee.  SECTION 8.3. Notices.  All notices provided for in this Guarantee shall be in writing, duly signed by the  party giving such notice, and shall be delivered, telecopied or mailed by first class mail, as  follows:  (a) If given to the Guarantee Trustee, at the Guarantee Trustee's mailing address  set forth below (or such other address as the Guarantee Trustee may give notice ofto the  Holders of the Capital Securities):  DOCSDCl:l77614.4  Wilmington Trust Company  Rodney Square North  1100 North Market Street  16  





 






Wilmington, Delaware 19890-0001  Attention: Corporate Trust Administration  Telecopy: 302-651-8882  Telephone: 302-651-1000  (b) If given to the Guarantor, at the Guarantor's mailing address set forth below  (or such other address as the Guarantor may give notice of to the Holders of the Capital  Securities and to the Guarantee Trustee):  First National Bankshares Corporation  One Cedar St.  Ronceverte, West Virginia 24970  Attention: Matthew L. Bums  Telecopy: (304) 647-4500  Telephone: (304) 647-4209  (c) If given to any Holder of the Capital Securities, at the address set forth on the  books and records of the Issuer.  All such notices shall be deemed to have been given when received in person,  telecopied with receipt confirmed, or mailed by first class mail, postage prepaid, except that if a  notice or other document is refused delivery or cannot be delivered because of a changed address  of which no notice was given, such notice or other document shall be deemed to have been  delivered on the date of such refusal or inability to deliver.  SECTION 8.4. Benefit.  This Guarantee is solely for the benefit of the Holders of the Capital Securities  and, subject to Section 2.l(a), is not separately transferable from the Capital Securities.  SECTION 8.5. Governing Law.  THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN  ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD  TO CONFLICT OF LAWS PRINCIPLES THEREOF.  SECTION 8.6. Counterparts.  This Guarantee may contain more than one counterpart of the signature page and  this Guarantee may be executed by the affixing of the signature of the Guarantor and the  Guarantee Trustee to any of such counterpart signature pages. All of such counterpart signature  pages shall be read as though one, and they shall have the same force and effect as though all of  the signers had signed a singie signature page.  17  DOCSDC1:177614.4  





 






THIS GUARANTEE is executed as of the day and year first above written.  FIRST NATIONAL BANK.SHARES  CORPORATION,  as Guarantor  By: /.,. 1)/.m1~3  Name: L. Thomas Bulla .....:::  Title: Chief Executive Officer  WILMINGTON TRUST COMP ANY, as  Guarantee Trustee  By:~~~~~~~~~~~~~  Name:  Title:  





 






I  \  '  THIS GUARANTEE is executed as of the day and year first above written.  FIRST NATIONAL BANKSHARES  CORPORATION,  as Guarantor  By: ____________ _  Name: L. Thomas Bulla  Title: Chief Executive Officer  WILMINGTON TRUST COMP ANY, as  G=~~  By: ~  Nam~}  Title: De~ise M. Geran  Vice President