Exhibit
10.1


 




 





 


AMENDED
AND RESTATED DECLARATION


OF TRUST


 


by and
among


 


WILMINGTON
TRUST COMPANY,


as
Delaware Trustee,


 


WILMINGTON
TRUST COMPANY,


as
Institutional Trustee,


 


YADKIN
VALLEY FINANCIAL CORPORATION,


as
Sponsor,


 


and


 


WILLIAM A.
LONG, EDWIN E. LAWS and


JULIE A.
MASON,


as
Administrators,


 


Dated as
of November 1, 2007


 




 





 

















 


TABLE OF
CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I INTERPRETATION AND DEFINITIONS

  	
  1

  
	
  Section 1.1.

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II ORGANIZATION

  	
  7

  
	
  Section 2.1.

  	
  Name

  	
  7

  
	
  Section 2.2.

  	
  Office

  	
  7

  
	
  Section 2.3.

  	
  Purpose

  	
  7

  
	
  Section 2.4.

  	
  Authority

  	
  8

  
	
  Section 2.5.

  	
  Title to
  Property of the Trust

  	
  8

  
	
  Section 2.6.

  	
  Powers and
  Duties of the Trustees and the Administrators

  	
  8

  
	
  Section 2.7.

  	
  Prohibition of
  Actions by the Trust and the Institutional Trustee

  	
  11

  
	
  Section 2.8.

  	
  Powers and
  Duties of the Institutional Trustee

  	
  12

  
	
  Section 2.9.

  	
  Certain Duties
  and Responsibilities of the Trustees and Administrators

  	
  13

  
	
  Section 2.10.

  	
  Certain Rights
  of Institutional Trustee

  	
  14

  
	
  Section 2.11.

  	
  Delaware Trustee

  	
  16

  
	
  Section 2.12.

  	
  Execution of
  Documents

  	
  16

  
	
  Section 2.13.

  	
  Not Responsible
  for Recitals or Issuance of Securities

  	
  16

  
	
  Section 2.14.

  	
  Duration of
  Trust

  	
  17

  
	
  Section 2.15.

  	
  Mergers

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE III SPONSOR

  	
  18

  
	
  Section 3.1.

  	
  Sponsor’s
  Purchase of Common Securities

  	
  18

  
	
  Section 3.2.

  	
  Responsibilities
  of the Sponsor

  	
  18

  
	
  Section 3.3.

  	
  Expenses

  	
  18

  
	
  Section 3.4.

  	
  Right to Proceed

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV INSTITUTIONAL TRUSTEE AND ADMINISTRATORS

  	
  19

  
	
  Section 4.1.

  	
  Number of
  Trustees

  	
  19

  
	
  Section 4.2.

  	
  Delaware
  Trustee; Eligibility

  	
  19

  
	
  Section 4.3.

  	
  Institutional
  Trustee; Eligibility

  	
  20

  
	
  Section 4.4.

  	
  Administrators

  	
  20

  
	
  Section 4.5.

  	
  Appointment,
  Removal and Resignation of Trustees and Administrators

  	
  20

  
	
  Section 4.6.

  	
  Vacancies Among
  Trustees

  	
  22

  
	
  Section 4.7.

  	
  Effect of
  Vacancies

  	
  22

  
	
  Section 4.8.

  	
  Meetings of the
  Trustees and the Administrators

  	
  22

  
	
  Section 4.9.

  	
  Delegation of
  Power

  	
  22

  
	
  Section 4.10.

  	
  Conversion,
  Consolidation or Succession to Business

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE V DISTRIBUTIONS

  	
  23

  
	
  Section 5.1.

  	
  Distributions

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI ISSUANCE OF SECURITIES

  	
  23

  
	
  Section 6.1.

  	
  General
  Provisions Regarding Securities

  	
  23

  
	
  Section 6.2.

  	
  Paying Agent,
  Transfer Agent and Registrar

  	
  24

  
	
  Section 6.3.

  	
  Form and Dating

  	
  24

  
	
  Section 6.4.

  	
  Mutilated,
  Destroyed, Lost or Stolen Certificates

  	
  25

  
	
  Section 6.5.

  	
  Temporary
  Securities

  	
  25

  



 


i

















 


	
  Section 6.6.

  	
  Cancellation

  	
  25

  
	
  Section 6.7.

  	
  Rights of
  Holders; Waivers of Past Defaults

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII DISSOLUTION AND TERMINATION OF TRUST

  	
  27

  
	
  Section 7.1.

  	
  Dissolution and
  Termination of Trust

  	
  27

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII TRANSFER OF INTERESTS

  	
  28

  
	
  Section 8.1.

  	
  General

  	
  28

  
	
  Section 8.2.

  	
  Transfer
  Procedures and Restrictions

  	
  28

  
	
  Section 8.3.

  	
  Deemed Security
  Holders

  	
  30

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
  INSTITUTIONAL TRUSTEE OR OTHERS

  	
  31

  
	
  Section 9.1.

  	
  Liability

  	
  31

  
	
  Section 9.2.

  	
  Exculpation

  	
  31

  
	
  Section 9.3.

  	
  Fiduciary Duty

  	
  31

  
	
  Section 9.4.

  	
  Indemnification

  	
  32

  
	
  Section 9.5.

  	
  Outside
  Businesses

  	
  34

  
	
  Section 9.6.

  	
  Compensation;
  Fee

  	
  34

  
	
   

  	
   

  	
   

  
	
  ARTICLE X ACCOUNTING

  	
  34

  
	
  Section 10.1.

  	
  Fiscal Year

  	
  34

  
	
  Section 10.2.

  	
  Certain
  Accounting Matters

  	
  35

  
	
  Section 10.3.

  	
  Banking

  	
  35

  
	
  Section 10.4.

  	
  Withholding

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI AMENDMENTS AND MEETINGS

  	
  36

  
	
  Section 11.1.

  	
  Amendments

  	
  36

  
	
  Section 11.2.

  	
  Meetings of the
  Holders of Securities; Action by Written Consent

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND THE DELAWARE
  TRUSTEE

  	
  38

  
	
  Section 12.1.

  	
  Representations
  and Warranties of Institutional Trustee

  	
  38

  
	
  Section 12.2.

  	
  Representations
  of the Delaware Trustee

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII MISCELLANEOUS

  	
  39

  
	
  Section 13.1.

  	
  Notices

  	
  39

  
	
  Section 13.2.

  	
  Governing Law

  	
  40

  
	
  Section 13.3.

  	
  Intention of the
  Parties

  	
  41

  
	
  Section 13.4.

  	
  Headings

  	
  41

  
	
  Section 13.5.

  	
  Successors and
  Assigns

  	
  41

  
	
  Section 13.6.

  	
  Partial
  Enforceability

  	
  41

  
	
  Section 13.7.

  	
  Counterparts

  	
  41

  



 


	
  Annex I

  	
  Terms of
  Securities

  
	
  Exhibit A-1

  	
  Form of Capital
  Security Certificate

  
	
  Exhibit A-2

  	
  Form of Common
  Security Certificate

  
	
  Exhibit B

  	
  Specimen of
  Initial Debenture

  
	
  Exhibit C

  	
  Placement
  Agreement

  



 


ii

















 


AMENDED
AND RESTATED


 


DECLARATION
OF TRUST


 


OF


 


YADKIN
VALLEY STATUTORY TRUST I


 


November 1,
2007


 


AMENDED AND RESTATED DECLARATION OF TRUST (“Declaration”)
dated and effective as of November 1, 2007, by the Trustees (as defined
herein), the Administrators (as defined herein), the Sponsor (as defined
herein) and by the holders, from time to time, of undivided beneficial
interests in the Trust (as defined herein) to be issued pursuant to this
Declaration;


 


WHEREAS, the Trustees, the Administrators and the
Sponsor established Yadkin Valley Statutory Trust I (the “Trust”),
a statutory trust under the Statutory Trust Act (as defined herein) pursuant to
a Declaration of Trust dated as of October 30, 2007 (the “Original
Declaration”), and a Certificate of Trust filed with the Secretary of State
of the State of Delaware on October 30, 2007, for the sole purpose of
issuing and selling certain securities representing undivided beneficial
interests in the assets of the Trust and investing the proceeds thereof in
certain debentures of the Debenture Issuer (as defined herein);


 


WHEREAS, as of the date hereof, no interests in the
Trust have been issued; and


 


WHEREAS, the Trustees, the Administrators and the
Sponsor, by this Declaration, amend and restate each and every term and
provision of the Original Declaration;


 


NOW, THEREFORE, it being the intention of the parties
hereto to continue the Trust as a statutory trust under the Statutory Trust Act
and that this Declaration constitutes the governing instrument of such
statutory trust, the Trustees declare that all assets contributed to the Trust
will be held in trust for the benefit of the holders, from time to time, of the
securities representing undivided beneficial interests in the assets of the
Trust issued hereunder, subject to the provisions of this Declaration. The
parties hereto hereby agree as follows:


 


INTERPRETATION AND DEFINITIONS


 


Definitions.


 


Unless the context otherwise requires:


 


Capitalized terms used in this Declaration but not
defined in the preamble above have the respective meanings assigned to them in
this 0;


 


a term defined anywhere in this Declaration has the
same meaning throughout;


 


all references to “the Declaration” or “this
Declaration” are to this Declaration as modified, supplemented or amended from
time to time;


 


all references in this Declaration to Articles and
Sections and Annexes and Exhibits are to Articles and Sections of and Annexes
and Exhibits to this Declaration unless otherwise specified; and


 


1

















 


a reference to the singular includes the plural and
vice versa.


 


“Acceleration Event of Default” has the meaning
set forth in the Indenture.


 


“Additional Interest” has the meaning set forth
in the Indenture.


 


“Administrative Action” has the meaning set
forth in paragraph 4(a) of Annex I.


 


“Administrators” means each of William A.
Long, Edwin E. Laws and Julie A. Mason, solely in such Person’s
capacity as Administrator of the Trust created and continued hereunder and not
in such Person’s individual capacity, or such Administrator’s successor in
interest in such capacity, or any successor appointed as herein provided.


 


“Affiliate” has the same meaning as given to
that term in Rule 405 of the Securities Act or any successor rule
thereunder.


 


“Authorized Officer” of a Person means any
Person that is authorized to bind such Person.


 


“Bankruptcy Event” means, with respect to any
Person:


 


(a)           a
court having jurisdiction in the premises shall enter a decree or order for
relief in respect of such Person in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its property,
or ordering the winding-up or liquidation of its affairs and such decree or
order shall remain unstayed and in effect for a period of 90 consecutive
days; or


 


(b)           such
Person shall commence a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, shall consent to
the entry of an order for relief in an involuntary case under any such law, or
shall consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) of such Person of any substantial part of its property, or shall make
any general assignment for the benefit of creditors, or shall fail generally to
pay its debts as they become due.


 


“Business Day” means any day other than
Saturday, Sunday or any other day on which banking institutions in New York
City or Wilmington, Delaware are permitted or required by any applicable law or
executive order to close.


 


“Capital Securities” has the meaning set forth
in paragraph 1(a) of Annex I.


 


“Capital Security Certificate” means a
definitive Certificate in fully registered form representing a Capital Security
substantially in the form of Exhibit A-1.


 


“Capital Treatment Event” has the meaning set
forth in paragraph 4(a) of Annex I.


 


“Certificate” means any certificate evidencing
Securities.


 


“Closing Date” has the meaning set forth in the
Placement Agreement.


 


“Code” means the Internal Revenue Code of 1986,
as amended from time to time, or any successor legislation.


 


“Common Securities” has the meaning set forth
in paragraph 1(b) of Annex I.


 


2

















 


“Common Security Certificate” means a
definitive Certificate in fully registered form representing a Common Security
substantially in the form of Exhibit A-2.


 


“Company Indemnified Person” means (a) any
Administrator; (b) any Affiliate of any Administrator; (c) any
officers, directors, shareholders, members, partners, employees,
representatives or agents of any Administrator; or (d) any officer,
employee or agent of the Trust or its Affiliates.


 


“Corporate Trust Office” means the office of
the Institutional Trustee at which the corporate trust business of the
Institutional Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this Declaration is
located at Rodney Square North, 1100 North Market Street, Wilmington,
Delaware  19890-1600, Attn: Corporate
Trust Administration.


 


“Coupon Rate” has the meaning set forth in
paragraph 2(a) of Annex I.


 


“Covered Person” means:  (a) any Administrator, officer,
director, shareholder, partner, member, representative, employee or agent of
(i) the Trust or (ii) any of the Trust’s Affiliates; and (b) any
Holder of Securities.


 


“Creditor” has the meaning set forth in
Section 3.3.


 


“Debenture Issuer” means Yadkin Valley
Financial Corporation, a North Carolina corporation, in its capacity as issuer
of the Debentures under the Indenture.


 


“Debenture Trustee” means Wilmington Trust
Company, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.


 


“Debentures” means the Floating Rate Junior
Subordinated Deferrable Interest Debentures due 2037 to be issued by the
Debenture Issuer under the Indenture.


 


“Defaulted Interest” has the meaning set forth
in the Indenture.


 


“Delaware Trustee” has the meaning set forth in
Section 4.2.


 


“Determination Date” has the meaning set forth
in paragraph 4(a) of Annex I.


 


“Direct Action” has the meaning set forth in 0.


 


“Distribution” means a distribution payable to
Holders of Securities in accordance with 0.


 


“Distribution Payment Date” has the meaning set
forth in paragraph 2(b) of Annex I.


 


“Distribution Period” means (i) with
respect to the Distribution paid on the first Distribution Payment Date, the
period beginning on (and including) the date of original issuance and ending on
(but excluding) the Distribution Payment Date in December 2007 and
(ii) thereafter, with respect to a Distribution paid on each successive Distribution
Payment Date, the period beginning on (and including) the preceding
Distribution Payment Date and ending on (but excluding) such current
Distribution Payment Date.


 


“Distribution Rate” means, for the Distribution
Period beginning on (and including) the date of original issuance and ending on
(but excluding) the Distribution Payment Date in December 2007, the rate per
annum of 6.21375%, and for each Distribution Period beginning on or after the
Distribution Payment Date in December 2007, the Coupon Rate for such
Distribution Period.


 


3

















 


“Event of Default” means any one of the
following events (whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):


 


(a)           the
occurrence of an Indenture Event of Default; or


 


(b)           default
by the Trust in the payment of any Redemption Price or Special Redemption Price
of any Security when it becomes due and payable; or


 


(c)           default
in the performance, or breach, in any material respect, of any covenant or
warranty of the Institutional Trustee in this Declaration (other than those
specified in clause (a) or (b) above) and continuation of such default or
breach for a period of 60 days after there has been given, by registered
or certified mail to the Institutional Trustee and to the Sponsor by the
Holders of at least 25% in aggregate liquidation amount of the outstanding
Capital Securities, a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a “Notice of
Default” hereunder; or


 


(d)           the
occurrence of a Bankruptcy Event with respect to the Institutional Trustee if a
successor Institutional Trustee has not been appointed within 90 days
thereof.


 


“Extension Period” has the meaning set forth in
paragraph 2(b) of Annex I.


 


“Federal Reserve” has the meaning set forth in
paragraph 3 of Annex I.


 


“Fiduciary Indemnified Person” shall mean each
of the Institutional Trustee (including in its individual capacity), the
Delaware Trustee (including in its individual capacity), any Affiliate of the
Institutional Trustee or Delaware Trustee and any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Institutional Trustee or Delaware Trustee.


 


“Fiscal Year” has the meaning set forth in 0.


 


“Guarantee” means the guarantee agreement to be
dated as of the Closing Date, of the Sponsor in respect of the Capital
Securities.


 


“Holder” means a Person in whose name a
Certificate representing a Security is registered, such Person being a
beneficial owner within the meaning of the Statutory Trust Act.


 


“Indemnified Person” means a Company
Indemnified Person or a Fiduciary Indemnified Person.


 


“Indenture” means the Indenture dated as of the
Closing Date, between the Debenture Issuer and the Debenture Trustee, and any
indenture supplemental thereto pursuant to which the Debentures are to be
issued, as such Indenture and any supplemental indenture may be amended,
supplemented or otherwise modified from time to time.


 


“Indenture Event of Default” means an “Event of
Default” as defined in the Indenture.


 


“Institutional Trustee” means the Trustee
meeting the eligibility requirements set forth in 0.


 


“Interest” means any interest due on the
Debentures including any Additional Interest and Defaulted Interest.


 


4

















 


“Investment Company” means an investment
company as defined in the Investment Company Act.


 


“Investment Company Act” means the Investment
Company Act of 1940, as amended from time to time, or any successor
legislation.


 


“Investment Company Event” has the meaning set
forth in paragraph 4(a) of Annex I.


 


“Liquidation” has the meaning set forth in
paragraph 3 of Annex I.


 


“Liquidation Distribution” has the meaning set
forth in paragraph 3 of Annex I.


 


“Majority in liquidation amount of the Securities”
means Holder(s) of outstanding Securities voting together as a single class or,
as the context may require, Holders of outstanding Capital Securities or
Holders of outstanding Common Securities voting separately as a class, who are
the record owners 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 the date upon which the
voting percentages are determined) of all outstanding Securities of the
relevant class.


 


“Maturity Date” has the meaning set forth in
paragraph 4(a) of Annex I.


 


“Officers’ Certificates” means, with respect to
any Person, a certificate signed by two Authorized Officers of such Person. Any
Officers’ Certificate delivered with respect to compliance with a condition or
covenant providing for it in this Declaration shall include:


 


(a)           a
statement that each officer signing the 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 Certificate;


 


(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.


 


“OTS” has the meaning set forth in
paragraph 3 of Annex I.


 


“Paying Agent” has the meaning specified in 0.


 


“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.


 


“Placement Agreement” means the Placement
Agreement relating to the offering and sale of Capital Securities in the form
of Exhibit C.


 


“Property Account” has the meaning set forth in
0(c).


 


“Pro Rata” has the meaning set forth in
paragraph 8 of Annex I.


 


5

















 


“Quorum” means a majority of the Administrators
or, if there are only two Administrators, both of them.


 


“Redemption Date” has the meaning set forth in
paragraph 4(a) of Annex I.


 


“Redemption/Distribution Notice” has the
meaning set forth in paragraph 4(e) of Annex I.


 


“Redemption Price” has the meaning set forth in
paragraph 4(a) of Annex I.


 


“Registrar” has the meaning set forth in 0.


 


“Relevant Trustee” has the meaning set forth in
0.


 


“Responsible Officer” means, with respect to
the Institutional Trustee, any officer within the Corporate Trust Office of the
Institutional Trustee, including any vice-president, any assistant
vice-president, any assistant secretary, the treasurer, any assistant
treasurer, any trust officer or other officer of the Corporate Trust Office of
the Institutional 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.


 


“Restricted Securities Legend” has the meaning
set forth in 0.


 


“Rule 3a-5” means Rule 3a-5 under the
Investment Company Act.


 


“Rule 3a-7” means Rule 3a-7 under the
Investment Company Act.


 


“Securities” means the Common Securities and
the Capital Securities.


 


“Securities Act” means the Securities Act of
1933, as amended from time to time, or any successor legislation.


 


“Special Event” has the meaning set forth in
paragraph 4(a) of Annex I.


 


“Special Redemption Date” has the meaning set
forth in paragraph 4(a) of Annex I.


 


“Special Redemption Price” has the meaning set
forth in paragraph 4(a) of Annex I.


 


“Sponsor” means Yadkin Valley Financial
Corporation, a North Carolina corporation, or any successor entity in a merger,
consolidation or amalgamation, in its capacity as sponsor of the Trust.


 


“Statutory Trust Act” means Chapter 38 of Title
12 of the Delaware Code, 12 Del. C. §§ 3801, et seq.
as may be amended from time to time.


 


“Successor Entity” has the meaning set forth in
0.


 


“Successor Delaware Trustee” has the meaning
set forth in 0.


 


“Successor Institutional Trustee” has the
meaning set forth in 0.


 


“Successor Securities” has the meaning set
forth in 0.


 


“Super Majority” has the meaning set forth in
paragraph 5(b) of Annex I.


 


6

















 


“Tax Event” has the meaning set forth in
paragraph 4(a) of Annex I.


 


“10% in liquidation amount of the Securities”
means Holder(s) of outstanding Securities voting together as a single class or,
as the context may require, Holders of outstanding Capital Securities or
Holders of outstanding Common Securities voting separately as a class, who are
the record owners of 10% or more of the aggregate liquidation amount (including
the stated amount that would be paid on redemption, liquidation or otherwise,
plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined) of all outstanding Securities of the relevant
class.


 


“3-Month LIBOR” has the meaning set forth in
paragraph 4(a) of Annex I.


 


“Transfer Agent” has the meaning set forth in
0.


 


“Treasury Regulations” means the income tax
regulations, including temporary and proposed regulations, promulgated under
the Code by the United States Treasury, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).


 


“Trust Property” means (a) the Debentures,
(b) any cash on deposit in, or owing to, the Property Account and
(c) all proceeds and rights in respect of the foregoing and any other
property and assets for the time being held or deemed to be held by the
Institutional Trustee pursuant to the trusts of this Declaration.


 


“Trustee” or “Trustees” means each
Person who has signed this Declaration as a trustee, so long as such Person
shall continue in office in accordance with the terms hereof, and all other
Persons who may from time to time be duly appointed, qualified and serving as
Trustees in accordance with the provisions hereof, and references herein to a
Trustee or the Trustees shall refer to such Person or Persons solely in their
capacity as trustees hereunder.


 


“U.S. Person” means a United States Person as
defined in Section 7701(a)(30) of the Code.


 


ORGANIZATION


 


Name. The Trust is named “Yadkin
Valley Statutory Trust I,” as such name may be modified from time to time
by the Administrators following written notice to the Holders of the Securities.
The Trust’s activities may be conducted under the name of the Trust or any
other name deemed advisable by the Administrators.


 


Office. The address of the
principal office of the Trust is c/o Wilmington Trust Company, Rodney Square
North, 1100 North Market Street, Wilmington, Delaware  19890-1600. On at least 10 Business Days
written notice to the Holders of the Securities, the Administrators may
designate another principal office, which shall be in a state of the United
States or in the District of Columbia.


 


Purpose. The exclusive
purposes and functions of the Trust are (a) to issue and sell the
Securities representing undivided beneficial interests in the assets of the
Trust, (b) to invest the gross proceeds from such sale to acquire the
Debentures, (c) to facilitate direct investment in the assets of the Trust
through issuance of the Common Securities and the Capital Securities and
(d) except as otherwise limited herein, to engage in only those other
activities necessary or incidental thereto. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, pledge any of its
assets, or otherwise undertake (or permit to be undertaken) any activity that
would cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust.


 


7

















 


Authority. Except as
specifically provided in this Declaration, the Institutional Trustee shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by a Trustee in accordance with its powers shall constitute the
act of and serve to bind the Trust. In dealing with the Trustees acting on
behalf of the Trust, no Person shall be required to inquire into the authority
of the Trustees to bind the Trust. Persons dealing with the Trust are entitled
to rely conclusively on the power and authority of the Trustees as set forth in
this Declaration. The Administrators shall have only those ministerial duties
set forth herein with respect to accomplishing the purposes of the Trust and
are not intended to be trustees or fiduciaries with respect to the Trust or the
Holders. The Institutional Trustee shall have the right, but shall not be
obligated except as provided in 0, to perform those duties assigned to the
Administrators.


 


Title to Property of the Trust. Except
as provided in 0 with respect to the Debentures and the Property Account or as
otherwise provided in this Declaration, legal title to all assets of the Trust
shall be vested in the Trust. The Holders shall not have legal title to any
part of the assets of the Trust, but shall have an undivided beneficial
interest in the assets of the Trust.


 


Powers and Duties of the Trustees and the
Administrators. The Trustees and the Administrators shall
conduct the affairs of the Trust in accordance with the terms of this
Declaration. Subject to the limitations set forth in paragraph (b) of this
Section, and in accordance with the following provisions (i) and (ii), the
Trustees and the Administrators shall have the authority to enter into all
transactions and agreements determined by the Institutional Trustee to be appropriate
in exercising the authority, express or implied, otherwise granted to the
Trustees or the Administrators, as the case may be, under this Declaration, and
to perform all acts in furtherance thereof, including without limitation, the
following:


 


Each Administrator shall have the power and authority
to act on behalf of the Trust with respect to the following matters:


 


the issuance and sale of the Securities;


 


to cause the Trust to enter into, and to execute and
deliver on behalf of the Trust, such agreements as may be necessary or
desirable in connection with the purposes and function of the Trust, including
agreements with the Paying Agent;


 


ensuring compliance with the Securities Act,
applicable state securities or blue sky laws;


 


the sending of notices (other than notices of
default), and other information regarding the Securities and the Debentures to
the Holders in accordance with this Declaration;


 


the consent to the appointment of a Paying Agent,
Transfer Agent and Registrar in accordance with this Declaration, which consent
shall not be unreasonably withheld or delayed;


 


execution and delivery of the Securities in accordance
with this Declaration;


 


execution and delivery of closing certificates
pursuant to the Placement Agreement and the application for a taxpayer
identification number;


 


8

















 


unless otherwise determined by the Holders of a
Majority in liquidation amount of the Securities or as otherwise required by
the Statutory Trust Act, to execute on behalf of the Trust (either acting alone
or together with any or all of the Administrators) any documents that the
Administrators have the power to execute pursuant to this Declaration;


 


the taking of any action incidental to the foregoing
as the Institutional Trustee may from time to time determine is necessary or
advisable to give effect to the terms of this Declaration for the benefit of
the Holders (without consideration of the effect of any such action on any
particular Holder);


 


to establish a record date with respect to all actions
to be taken hereunder that require a record date be established, including
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Capital Securities and Holders of Common Securities
as to such actions and applicable record dates; and


 


to duly prepare and file all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust on behalf of the Trust.


 


As among the Trustees and the Administrators, the
Institutional Trustee shall have the power, duty and authority to act on behalf
of the Trust with respect to the following matters:


 


the establishment of the Property Account;


 


the receipt of the Debentures;


 


the collection of interest, principal and any other
payments made in respect of the Debentures in the Property Account;


 


the distribution through the Paying Agent of amounts
owed to the Holders in respect of the Securities;


 


the exercise of all of the rights, powers and
privileges of a holder of the Debentures;


 


the sending of notices of default and other
information regarding the Securities and the Debentures to the Holders in
accordance with this Declaration;


 


the distribution of the Trust Property in accordance
with the terms of this Declaration;


 


to the extent provided in this Declaration, the
winding up of the affairs of and liquidation of the Trust and the preparation,
execution and filing of the certificate of cancellation with the Secretary of
State of the State of Delaware;


 


after any Event of Default (provided that such
Event of Default is not by or with respect to the Institutional Trustee) the
taking of any action incidental to the foregoing as the Institutional Trustee
may from time to time determine is necessary or advisable to give effect to the
terms of this Declaration and protect and conserve the Trust Property for the
benefit of the Holders (without consideration of the effect of any such action
on any particular Holder); and


 


9

















 


to take all action that may be necessary for the
preservation and the continuation of the Trust’s valid existence, rights,
franchises and privileges as a statutory trust under the laws of the State of
Delaware.


 


The Institutional Trustee shall have the power and
authority to act on behalf of the Trust with respect to any of the duties,
liabilities, powers or the authority of the Administrators set forth in
Section 2.6(a)(i)(D), (E) and (F) herein but shall not have a duty to do
any such act unless specifically requested to do so in writing by the Sponsor,
and shall then be fully protected in acting pursuant to such written request;
and in the event of a conflict between the action of the Administrators and the
action of the Institutional Trustee, the action of the Institutional Trustee
shall prevail.


 


So long as this Declaration remains in effect, the
Trust (or the Trustees or Administrators acting on behalf of the Trust) shall
not undertake any business, activities or transaction except as expressly
provided herein or contemplated hereby. In particular, neither the Trustees nor
the Administrators may cause the Trust to (i) acquire any investments or
engage in any activities not authorized by this Declaration, (ii) sell,
assign, transfer, exchange, mortgage, pledge, set-off or otherwise dispose of
any of the Trust Property or interests therein, including to Holders, except as
expressly provided herein, (iii) take any action that would reasonably be
expected (x) to cause the Trust to fail or cease to qualify as a “grantor trust”
for United States federal income tax purposes or (y) to require the trust to
register as an Investment Company under the Investment Company Act,
(iv) incur any indebtedness for borrowed money or issue any other debt or
(v) take or consent to any action that would result in the placement of a
lien on any of the Trust Property. The Institutional Trustee shall, at the sole
cost and expense of the Trust, defend all claims and demands of all Persons at
any time claiming any lien on any of the Trust Property adverse to the interest
of the Trust or the Holders in their capacity as Holders.


 


In connection with the issuance and sale of the
Capital Securities, the Sponsor shall have the right and responsibility to
assist the Trust with respect to, or effect on behalf of the Trust, the
following (and any actions taken by the Sponsor in furtherance of the following
prior to the date of this Declaration are hereby ratified and confirmed in all
respects):


 


the taking of any action necessary to obtain an
exemption from the Securities Act;


 


the determination of the States in which to take
appropriate action to qualify or register for sale all or part of the Capital
Securities and the determination of any and all such acts, other than actions
which must be taken by or on behalf of the Trust, and the advice to the
Administrators of actions they must take on behalf of the Trust, and the
preparation for execution and filing of any documents to be executed and filed
by the Trust or on behalf of the Trust, as the Sponsor deems necessary or
advisable in order to comply with the applicable laws of any such States in
connection with the sale of the Capital Securities;


 


the negotiation of the terms of, and the execution and
delivery of, the Placement Agreement providing for the sale of the Capital
Securities; and


 


the taking of any other actions necessary or desirable
to carry out any of the foregoing activities.


 


Notwithstanding anything herein to the contrary, the
Administrators and the Holders of a Majority in liquidation amount of the
Common Securities are authorized and directed to conduct the affairs of the
Trust and to operate the Trust so that the Trust will not (i) be deemed to be
an Investment Company required to be registered under the Investment Company
Act, and (ii) fail to be classified as a “grantor trust” for United States
federal income tax purposes. The Administrators and the Holders of a 


 


10

















 


Majority in liquidation
amount of the Common Securities shall not take any action inconsistent with the
treatment of the Debentures as indebtedness of the Debenture Issuer for United
States federal income tax purposes. In this connection, the Administrators and
the Holders of a Majority in liquidation amount of the Common Securities are
authorized to take any action, not inconsistent with applicable laws, the
Certificate of Trust or this Declaration, as amended from time to time, that
each of the Administrators and the Holders of a Majority in liquidation amount
of the Common Securities determines in their discretion to be necessary or
desirable for such purposes.


 


All expenses incurred by the Administrators or the
Trustees pursuant to this 0 shall be reimbursed by the Sponsor, and the
Trustees and the Administrators shall have no obligations with respect to such
expenses (for purposes of clarification, this Section 2.6(e) does not
contemplate the payment by the Sponsor of acceptance or annual administration
fees owing to the Trustees under this Declaration or the fees and expenses of
the Trustees’ counsel in connection with the closing of the transactions
contemplated by this Declaration).


 


The assets of the Trust shall consist of the Trust
Property.


 


Legal title to all Trust Property shall be vested at
all times in the Institutional Trustee (in its capacity as such) and shall be
held and administered by the Institutional Trustee and the Administrators for
the benefit of the Trust in accordance with this Declaration.


 


If the Institutional Trustee or any Holder has
instituted any proceeding to enforce any right or remedy under this Declaration
and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Institutional Trustee or to such Holder, then
and in every such case the Sponsor, the Institutional Trustee and the Holders
shall, subject to any determination in such proceeding, be restored severally
and respectively to their former positions hereunder, and thereafter all rights
and remedies of the Institutional Trustee and the Holders shall continue as
though no such proceeding had been instituted.


 


Prohibition of Actions by the Trust and the
Institutional Trustee. 


 


The Trust shall not, and the Institutional Trustee
shall cause the Trust not to, engage in any activity other than as required or
authorized by this Declaration. In particular, the Trust shall not and the
Institutional Trustee shall cause the Trust not to:


 


invest any proceeds received by the Trust from holding
the Debentures, but shall distribute all such proceeds to Holders of the
Securities pursuant to the terms of this Declaration and of the Securities;


 


acquire any assets other than as expressly provided
herein;


 


possess Trust Property for other than a Trust purpose;


 


make any loans or incur any indebtedness other than
loans represented by the Debentures;


 


possess any power or otherwise act in such a way as to
vary the Trust assets or the terms of the Securities in any way whatsoever
other than as expressly provided herein;


 


issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the Securities;


 


11

















 


carry on any “trade or business” as that phrase is
used in the Code; or


 


other than as provided in this Declaration (including
Annex I), (A) direct the time, method and place of exercising any
trust or power conferred upon the Debenture Trustee with respect to the
Debentures, (B) waive any past default that is waivable under the Indenture,
(C) exercise any right to rescind or annul any declaration that the
principal of all the Debentures shall be due and payable, or (D) consent
to any amendment, modification or termination of the Indenture or the
Debentures where such consent shall be required unless the Trust shall have
received a written opinion of counsel to the effect that such modification will
not cause the Trust to cease to be classified as a “grantor trust” for United
States federal income tax purposes.


 


Powers and Duties of the Institutional Trustee. 


 


The legal title to the Debentures shall be owned by
and held of record in the name of the Institutional Trustee in trust for the
benefit of the Trust and the Holders of the Securities. The right, title and
interest of the Institutional Trustee to the Debentures shall vest
automatically in each Person who may hereafter be appointed as Institutional
Trustee in accordance with 0. Such vesting and cessation of title shall be
effective whether or not conveyancing documents with regard to the Debentures have
been executed and delivered.


 


The Institutional Trustee shall not transfer its
right, title and interest in the Debentures to the Administrators or to the
Delaware Trustee.


 


The Institutional Trustee shall:


 


establish and maintain a segregated non-interest
bearing trust account (the “Property Account”) in the name of and under
the exclusive control of the Institutional Trustee, and maintained in the
Institutional Trustee’s trust department, on behalf of the Holders of the
Securities and, upon the receipt of payments of funds made in respect of the
Debentures held by the Institutional Trustee, deposit such funds into the
Property Account and make payments, or cause the Paying Agent to make payments,
to the Holders of the Capital Securities and Holders of the Common Securities
from the Property Account in accordance with 0. Funds in the Property Account
shall be held uninvested until disbursed in accordance with this Declaration;


 


engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Capital Securities and
the Common Securities to the extent the Debentures are redeemed or mature; and


 


upon written notice of distribution issued by the
Administrators in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect the
distribution of the Debentures to Holders of Securities upon the occurrence of
certain circumstances pursuant to the terms of the Securities.


 


The Institutional Trustee may bring or defend, pay,
collect, compromise, arbitrate, resort to legal action with respect to, or
otherwise adjust claims or demands of or against, the Trust which arises out of
or in connection with an Event of Default of which a Responsible Officer of the
Institutional Trustee has actual knowledge or arises out of the Institutional
Trustee’s duties and obligations under this Declaration; provided, however,
that if an Event of Default has occurred and is continuing and such event is
attributable to the failure of the Debenture Issuer to pay interest or
principal on the Debentures on the date such interest or principal is otherwise
payable (or in the case of redemption, on the redemption date), then a Holder
of the Capital Securities may directly institute a proceeding for enforcement
of payment to such Holder of the principal of or interest on the Debentures
having a principal amount equal to the aggregate 


 


12

















 


liquidation amount of the
Capital Securities of such Holder (a “Direct Action”) on or after the
respective due date specified in the Debentures. In connection with such Direct
Action, the rights of the Holders of the Common Securities will be subrogated
to the rights of such Holder of the Capital Securities to the extent of any
payment made by the Debenture Issuer to such Holder of the Capital Securities
in such Direct Action; provided, however, that no Holder of the
Common Securities may exercise such right of subrogation so long as an Event of
Default with respect to the Capital Securities has occurred and is continuing.


 


The Institutional Trustee shall continue to serve as a
Trustee until either:


 


the Trust has been completely liquidated and the
proceeds of the liquidation distributed to the Holders of the Securities
pursuant to the terms of the Securities and this Declaration; or


 


a Successor Institutional Trustee has been appointed
and has accepted that appointment in accordance with 0.


 


The Institutional Trustee shall have the legal power
to exercise all of the rights, powers and privileges of a Holder of the
Debentures under the Indenture and, if an Event of Default occurs and is
continuing, the Institutional Trustee may, for the benefit of Holders of the
Securities, enforce its rights as holder of the Debentures subject to the
rights of the Holders pursuant to this Declaration (including Annex I) and
the terms of the Securities.


 


The Institutional Trustee must exercise the powers set
forth in this 0 in a manner that is consistent with the purposes and functions
of the Trust set out in 0, and the Institutional Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set
out in 0.


 


Certain Duties and Responsibilities of the
Trustees and Administrators. 


 


The Institutional Trustee, before the occurrence of
any Event of Default and after the curing or waiving of all such Events of
Default that may have occurred, shall undertake to perform only such duties as
are specifically set forth in this Declaration and no implied covenants shall
be read into this Declaration against the Institutional Trustee. In case an
Event of Default has occurred (that has not been cured or waived pursuant to
0), the Institutional Trustee shall exercise such of the rights and powers
vested in it by this Declaration, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.


 


The duties and responsibilities of the Trustees and
the Administrators shall be as provided by this Declaration. Notwithstanding
the foregoing, no provision of this Declaration shall require any Trustee or
Administrator to expend or risk their own funds or otherwise incur any
financial liability in the performance of any of their duties hereunder, or in
the exercise of any of their rights or powers if it shall have reasonable
grounds to believe that repayment of such funds or adequate protection against
such risk of liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Declaration relating to the
conduct or affecting the liability of or affording protection to the Trustees
or Administrators shall be subject to the provisions of this Article. Nothing
in this Declaration shall be construed to relieve an Administrator or a Trustee
from liability for its own negligent act, its own negligent failure to act, or
its own willful misconduct. To the extent that, at law or in equity, a Trustee
or an Administrator has duties and liabilities relating to the Trust or to the
Holders, such Trustee or such Administrator shall not be liable to the Trust or
to any Holder for such Trustee’s or such Administrator’s good faith reliance on
the provisions of this Declaration. The provisions of this Declaration, to the
extent that they restrict the duties and liabilities of the Administrators or
the Trustee otherwise existing at law or in equity, are agreed by the Sponsor
and the Holders to replace such other duties and liabilities of the Administrators
or the Trustees.


 


13

















 


All payments made by the Institutional Trustee or a
Paying Agent in respect of the Securities shall be made only from the revenue
and proceeds from the Trust Property and only to the extent that there shall be
sufficient revenue or proceeds from the Trust Property to enable the
Institutional Trustee or a Paying Agent to make payments in accordance with the
terms hereof. Each Holder, by its acceptance of a Security, agrees that it will
look solely to the revenue and proceeds from the Trust Property to the extent
legally available for distribution to it as herein provided and that the
Trustees and the Administrators are not personally liable to it for any amount
distributable in respect of any Security or for any other liability in respect
of any Security. This 0 does not limit the liability of the Trustees expressly
set forth elsewhere in this Declaration.


 


The Institutional Trustee shall not be liable for its
own acts or omissions hereunder except as a result of its own negligent action,
its own negligent failure to act, or its own willful misconduct, except that:


 


the Institutional Trustee shall not be liable for any
error of judgment made in good faith by an Authorized Officer of the
Institutional Trustee, unless it shall be proved that the Institutional Trustee
was negligent in ascertaining the pertinent facts;


 


the Institutional 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 direction of the Holders of not less than a Majority in
liquidation amount of the Capital Securities or the Common Securities, as
applicable, relating to the time, method and place of conducting any proceeding
for any remedy available to the Institutional Trustee, or exercising any trust
or power conferred upon the Institutional Trustee under this Declaration;


 


the Institutional Trustee’s sole duty with respect to
the custody, safekeeping and physical preservation of the Debentures and the
Property Account shall be to deal with such property in a similar manner as the
Institutional Trustee deals with similar property for its fiduciary accounts
generally, subject to the protections and limitations on liability afforded to
the Institutional Trustee under this Declaration;


 


the Institutional Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree in
writing with the Sponsor; and money held by the Institutional Trustee need not
be segregated from other funds held by it except in relation to the Property
Account maintained by the Institutional Trustee pursuant to 0 and except to the
extent otherwise required by law; and


 


the Institutional Trustee shall not be responsible for
monitoring the compliance by the Administrators or the Sponsor with their
respective duties under this Declaration, nor shall the Institutional Trustee
be liable for any default or misconduct of the Administrators or the Sponsor.


 


Certain Rights of Institutional   Trustee. Subject to the provisions of 0:


 


the Institutional Trustee may conclusively rely and
shall fully be protected in acting or refraining from acting in good faith upon
any resolution, opinion of counsel, certificate, written representation of a
Holder or transferee, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, appraisal, 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;


 


if (i) in performing its duties under this
Declaration, the Institutional Trustee is required to decide between
alternative courses of action, (ii) in construing any of the provisions of
this Declaration, 


 


14

















 


the Institutional Trustee
finds the same ambiguous or inconsistent with any other provisions contained
herein, or (iii) the Institutional Trustee is unsure of the application of
any provision of this Declaration, then, except as to any matter as to which
the Holders of Capital Securities are entitled to vote under the terms of this
Declaration, the Institutional Trustee may deliver a notice to the Sponsor
requesting the Sponsor’s written instructions as to the course of action to be
taken and the Institutional Trustee shall take such action, or refrain from
taking such action, as the Institutional Trustee shall be instructed in
writing, in which event the Institutional Trustee shall have no liability
except for its own negligence or willful misconduct;


 


any direction or act of the Sponsor or the
Administrators contemplated by this Declaration shall be sufficiently evidenced
by an Officers’ Certificate;


 


whenever in the administration of this Declaration,
the Institutional Trustee shall deem it desirable that a matter be proved or
established before undertaking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically prescribed)
may request and conclusively rely upon an Officers’ Certificate as to factual
matters which, upon receipt of such request, shall be promptly delivered by the
Sponsor or the Administrators;


 


the Institutional Trustee shall have no duty to see to
any recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities laws)
or any rerecording, refiling or reregistration thereof;


 


the Institutional Trustee may consult with counsel of
its selection (which counsel may be counsel to the Sponsor or any of its
Affiliates) and the advice of such counsel 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 reliance thereon and in accordance
with such advice; the Institutional Trustee shall have the right at any time to
seek instructions concerning the administration of this Declaration from any
court of competent jurisdiction;


 


the Institutional Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this Declaration at the
request or direction of any of the Holders pursuant to this Declaration, unless
such Holders shall have offered to the Institutional Trustee security or
indemnity reasonably satisfactory to it against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction; provided, that nothing contained in this 0 shall be taken to
relieve the Institutional Trustee, subject to 0, upon the occurrence of an
Event of Default (that has not been cured or waived pursuant to
Section 6.7), to exercise such of the rights and powers vested in it by
this Declaration, and use the same degree of care and skill in their exercise,
as a prudent person would exercise or use under the circumstances in the
conduct of his or her own affairs;


 


the Institutional 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, consent, order,
approval, bond, debenture, note or other evidence of indebtedness or other
paper or document, unless requested in writing to do so by one or more Holders,
but the Institutional Trustee may make such further inquiry or investigation
into such facts or matters as it may see fit;


 


the Institutional Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly or
by or through its agents or attorneys and the Institutional Trustee shall not
be responsible for any misconduct or negligence on the part of or for the
supervision of, any such agent or attorney appointed with due care by it
hereunder;


 


whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action 


 


15

















 


hereunder the
Institutional Trustee (i) may request instructions from the Holders of the
Capital Securities which instructions may only be given by the Holders of the
same proportion in liquidation amount of the Capital Securities as would be
entitled to direct the Institutional Trustee under the terms of the Capital
Securities in respect of such remedy, right or action, (ii) may refrain
from enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be fully protected in acting in
accordance with such instructions;


 


except as otherwise expressly provided in this
Declaration, the Institutional Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this Declaration;


 


when the Institutional Trustee incurs expenses or
renders services in connection with a Bankruptcy Event, such expenses
(including the fees and expenses of its counsel) and the compensation for such
services are intended to constitute expenses of administration under any
bankruptcy law or law relating to creditors rights generally;


 


the Institutional Trustee shall not be charged with
knowledge of an Event of Default unless a Responsible Officer of the
Institutional Trustee obtains actual knowledge of such event or the
Institutional Trustee receives written notice of such event from any Holder,
the Sponsor or the Debenture Trustee;


 


any action taken by the Institutional Trustee or its
agents hereunder shall bind the Trust and the Holders of the Securities, and
the signature of the Institutional Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party shall be
required to inquire as to the authority of the Institutional Trustee to so act
or as to its compliance with any of the terms and provisions of this
Declaration, both of which shall be conclusively evidenced by the Institutional
Trustee’s or its agent’s taking such action; and


 


no provision of this Declaration shall be deemed to
impose any duty or obligation on the Institutional 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
Institutional 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
Institutional Trustee shall be construed to be a duty.


 


Delaware Trustee. Notwithstanding
any other provision of this Declaration other than 0, the Delaware Trustee
shall not be entitled to exercise any powers, nor shall the Delaware Trustee
have any of the duties and responsibilities of any of the Trustees or the
Administrators described in this Declaration (except as may be required under
the Statutory Trust Act). Except as set forth in 0, the Delaware Trustee shall
be a Trustee for the sole and limited purpose of fulfilling the requirements of
§ 3807 of the Statutory Trust Act.


 


Execution of Documents. Unless
otherwise determined in writing by the Institutional Trustee, and except as
otherwise required by the Statutory Trust Act, the Institutional Trustee, or
any one or more of the Administrators, as the case may be, is authorized to
execute on behalf of the Trust any documents that the Trustees or the
Administrators, as the case may be, have the power and authority to execute
pursuant to 0.


 


Not Responsible for Recitals or Issuance of
Securities. The recitals contained in this Declaration
and the Securities shall be taken as the statements of the Sponsor, and the
Trustees do not assume any responsibility for their correctness. The Trustees
make no representations as to the value or condition of the property of the
Trust or any part thereof. The Trustees make no representations as to the
validity or sufficiency of this Declaration, the Debentures or the Securities.


 


16

















 


Duration of Trust. The
Trust, unless earlier dissolved pursuant to the provisions of Article VII
hereof, shall be in existence for 35 years from the Closing Date.


 


Mergers. 


 


The Trust may not consolidate, amalgamate, merge with
or into, or be replaced by, or convey, transfer or lease its properties and
assets substantially as an entirety to any corporation or other body, except as
described in 0 and 0 and except in connection with the liquidation of the Trust
and the distribution of the Debentures to Holders of Securities pursuant to
Section 7.1(a)(iv) of the Declaration or Section 4 of Annex I.


 


The Trust may, with the consent of the Institutional
Trustee and without the consent of the Holders of the Capital Securities,
consolidate, amalgamate, merge with or into, or be replaced by a trust
organized as such under the laws of any state; provided that:


 


if the Trust is not the surviving entity, such
successor entity (the “Successor Entity”) either:


 


expressly assumes all of the obligations of the Trust
under the Securities; or


 


substitutes for the Securities other securities having
substantially the same terms as the Securities (the “Successor Securities”)
so that the Successor Securities rank the same as the Securities rank with
respect to Distributions and payments upon Liquidation, redemption and
otherwise;


 


the Sponsor expressly appoints a trustee of the Successor
Entity that possesses substantially the same powers and duties as the
Institutional Trustee as the Holder of the Debentures;


 


such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities) in any
material respect;


 


the Institutional Trustee receives written
confirmation from Moody’s Investor Services, Inc. and any other nationally
recognized statistical rating organization that rates securities issued by the
initial purchaser of the Capital Securities that it will not reduce or withdraw
the rating of any such securities because of such merger, conversion,
consolidation, amalgamation or replacement;


 


such Successor Entity has a purpose substantially
identical to that of the Trust;


 


prior to such merger, consolidation, amalgamation or
replacement, the Trust has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the effect
that:


 


such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities) in any
material respect;


 


following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be required to
register as an Investment Company; and


 


17

















 


following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to be classified
as a “grantor trust” for United States federal income tax purposes;


 


the Sponsor guarantees the obligations of such
Successor Entity under the Successor Securities at least to the extent provided
by the Guarantee;


 


the Sponsor owns 100% of the common securities of any
Successor Entity; and


 


prior to such merger, consolidation, amalgamation or
replacement, the Institutional Trustee shall have received an Officers’
Certificate of the Administrators and an opinion of counsel, each to the effect
that all conditions precedent under this 0 to such transaction have been
satisfied.


 


Notwithstanding 0, the Trust shall not, except with
the consent of Holders of 100% in aggregate liquidation amount of the
Securities, consolidate, amalgamate, merge with or into, or be replaced by any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger or
replacement would cause the Trust or Successor Entity to be classified as other
than a grantor trust for United States federal income tax purposes.


 


SPONSOR


 


Sponsor’s Purchase of Common Securities.
On the Closing Date, the Sponsor will purchase all of the Common Securities
issued by the Trust in an amount at least equal to 3% of the capital of the
Trust, at the same time as the Capital Securities are sold.


 


Responsibilities of the Sponsor.
In connection with the issue and sale of the Capital Securities, the
Sponsor shall have the exclusive right and responsibility to engage in, or
direct the Administrators to engage in, the following activities:


 


to determine the States in which to take appropriate
action to qualify the Trust or to qualify or register for sale all or part of the
Capital Securities and to do any and all such acts, other than actions which
must be taken by the Trust, and advise the Trust of actions it must take, and
prepare for execution and filing any documents to be executed and filed by the
Trust, as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States, to protect the limited liability of the
Holders of the Capital Securities or to enable the Trust to effect the purposes
for which it was created; and


 


to negotiate the terms of and/or execute on behalf of
the Trust, the Placement Agreement and other related agreements providing for
the sale of the Capital Securities.


 


Expenses. In connection with
the offering, sale and issuance of the Debentures to the Trust and in
connection with the sale of the Securities by the Trust, the Sponsor, in its
capacity as Debenture Issuer, shall:


 


pay all reasonable costs and expenses owing to the
Debenture Trustee pursuant to Section 6.6 of the Indenture;


 


be responsible for and shall pay all debts and
obligations (other than with respect to the Securities) and all costs and
expenses of the Trust, the offering, sale and issuance of the Securities 


 


18
















(including fees to
the placement agents in connection therewith), the costs and expenses
(including reasonable counsel fees and expenses) of the Institutional Trustee
and the Administrators, the costs and expenses relating to the operation of the
Trust, including, without limitation, costs and expenses of accountants,
attorneys, statistical or bookkeeping services, expenses for printing and
engraving and computing or accounting equipment, Paying Agents, Registrars,
Transfer Agents, duplicating, travel and telephone and other telecommunications
expenses and costs and expenses incurred in connection with the acquisition,
financing, and disposition of Trust assets and the enforcement by the
Institutional Trustee of the rights of the Holders (for purposes of clarification,
this Section 3.3(b) does not contemplate the payment by the Sponsor of
acceptance or annual administration fees owing to the Trustees pursuant to the
services to be provided by the Trustees under this Declaration or the fees and
expenses of the Trustees’ counsel in connection with the closing of the
transactions contemplated by this Declaration); and


 


pay any and all taxes (other than United States
withholding taxes attributable to the Trust or its assets) and all liabilities,
costs and expenses with respect to such taxes of the Trust.


 


The Sponsor’s obligations under this Section 3.3
shall be for the benefit of, and shall be enforceable by, any Person to whom
such debts, obligations, costs, expenses and taxes are owed (a “Creditor”)
whether or not such Creditor has received notice hereof. Any such Creditor may
enforce the Sponsor’s obligations under this Section 3.3 directly against
the Sponsor and the Sponsor irrevocably waives any right or remedy to require
that any such Creditor take any action against the Trust or any other Person
before proceeding against the Sponsor. The Sponsor agrees to execute such
additional agreements as may be necessary or desirable in order to give full
effect to the provisions of this Section 3.3.


 


Right to Proceed. The
Sponsor acknowledges the rights of Holders to institute a Direct Action as set
forth in 0 hereto.


 


INSTITUTIONAL TRUSTEE AND ADMINISTRATORS


 


Number of Trustees. The
number of Trustees shall initially be two, and;


 


at any time before the issuance of any Securities, the
Sponsor may, by written instrument, increase or decrease the number of
Trustees; and


 


after the issuance of any Securities, the number of
Trustees may be increased or decreased by vote of the Holder of a Majority in
liquidation amount of the Common Securities voting as a class at a meeting of
the Holder of the Common Securities; provided, however, that
there shall be a Delaware Trustee if required by 0; and there shall always be
one Trustee who shall be the Institutional Trustee, and such Trustee may also
serve as Delaware Trustee if it meets the applicable requirements, in which
case 0 shall have no application to such entity in its capacity as
Institutional Trustee.


 


Delaware Trustee; Eligibility.


 


If required by the Statutory Trust Act, one Trustee
(the “Delaware Trustee”) shall be:


 


a natural person at least 21 years of age who is a
resident of the State of Delaware; or


 


if not a natural person, an entity which is organized
under the laws of the United States or any state thereof or the District of
Columbia, has its principal place of business in the State of Delaware, and
otherwise meets the requirements of applicable law, including § 3807 of the
Statutory Trust Act.


 


19

















 


The initial Delaware Trustee shall be Wilmington Trust
Company.


 


Institutional Trustee; Eligibility.


 


There shall at all times be one Trustee which shall:


 


not be an Affiliate of the Sponsor;


 


not offer or provide credit or credit enhancement to
the Trust; and


 


be a banking corporation or trust company organized
and doing business under the laws of the United States of America or any state
thereof or the District of Columbia, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least 50
million U.S. dollars ($50,000,000.00), and subject to supervision or
examination by Federal, state, or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of the supervising or examining authority referred to
above, then for the purposes of this 0, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published.


 


If at any time the Institutional Trustee shall cease
to be eligible to so act under 0, the Institutional Trustee shall immediately
resign in the manner and with the effect set forth in 0.


 


If the Institutional Trustee has or shall acquire any “conflicting
interest” within the meaning of Section 310(b) of the Trust Indenture Act of
1939, as amended, the Institutional Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
this Declaration.


 


The initial Institutional Trustee shall be Wilmington
Trust Company.


 


Administrators. Each
Administrator shall be a U.S. Person, 21 years of age or older and authorized
to bind the Sponsor. The initial Administrators shall be William A. Long,
Edwin E. Laws and Julie A. Mason. There shall at all times be at
least one Administrator. Except where a requirement for action by a specific
number of Administrators is expressly set forth in this Declaration and except
with respect to any action the taking of which is the subject of a meeting of
the Administrators, any action required or permitted to be taken by the
Administrators may be taken by, and any power of the Administrators may be
exercised by, or with the consent of, any one such Administrator.


 


Appointment, Removal and Resignation of Trustees
and Administrators.


 


No resignation or removal of any Trustee (the “Relevant
Trustee”) and no appointment of a successor Trustee pursuant to this Article
shall become effective until the acceptance of appointment by the successor
Trustee in accordance with the applicable requirements of this 0.


 


Subject to 00, a Relevant Trustee may resign at any
time by giving written notice thereof to the Holders of the Securities and by
appointing a successor Relevant Trustee. Upon the resignation of the
Institutional Trustee, the Institutional Trustee shall appoint a successor by
requesting from at least three Persons meeting the eligibility requirements
their expenses and charges to serve as the successor Institutional Trustee on a
form provided by the Administrators, and selecting the Person who agrees to the
lowest expense and charges (the “Successor Institutional Trustee”). If the
instrument of acceptance by the successor Relevant Trustee required by this 0
shall not have been delivered to the Relevant Trustee within 60 days after the
giving of such notice of resignation or delivery of the instrument of removal,
the 


 


20

















 


Relevant Trustee may
petition, at the expense of the Trust, any federal, state or District of
Columbia court of competent jurisdiction for the appointment of a successor
Relevant Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper, appoint a Relevant Trustee. The Institutional
Trustee shall have no liability for the selection of such successor pursuant to
this 0.


 


Unless an Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by an act of the Holders of
a Majority in liquidation amount of the Common Securities. If any Trustee shall
be so removed, the Holders of the Common Securities, by act of the Holders of a
Majority in liquidation amount of the Common Securities delivered to the
Relevant Trustee, shall promptly appoint a successor Relevant Trustee, and such
successor Trustee shall comply with the applicable requirements of this 0. If
an Event of Default shall have occurred and be continuing, the Institutional
Trustee or the Delaware Trustee, or both of them, may be removed by the act of
the Holders of a Majority in liquidation amount of the Capital Securities,
delivered to the Relevant Trustee (in its individual capacity and on behalf of
the Trust). If any Trustee shall be so removed, the Holders of Capital
Securities, by act of the Holders of a Majority in liquidation amount of the
Capital Securities then outstanding delivered to the Relevant Trustee, shall
promptly appoint a successor Relevant Trustee or Trustees, and such successor
Trustee shall comply with the applicable requirements of this 0. If no
successor Relevant Trustee shall have been so appointed by the Holders of a
Majority in liquidation amount of the Capital Securities and accepted
appointment in the manner required by this 0 within 30 days after delivery of an
instrument of removal, the Relevant Trustee or any Holder who has been a Holder
of the Securities for at least six months may, on behalf of himself and all
others similarly situated, petition any federal, state or District of Columbia
court of competent jurisdiction for the appointment of a successor Relevant
Trustee. Such court may thereupon, after prescribing such notice, if any, as it
may deem proper, appoint a successor Relevant Trustee or Trustees.


 


The Institutional Trustee shall give notice of each
resignation and each removal of a Trustee and each appointment of a successor
Trustee to all Holders and to the Sponsor. Each notice shall include the name
of the successor Relevant Trustee and the address of its Corporate Trust Office
if it is the Institutional Trustee.


 


Notwithstanding the foregoing or any other provision
of this Declaration, in the event a Delaware Trustee who is a natural person
dies or is adjudged by a court to have become incompetent or incapacitated, the
vacancy created by such death, incompetence or incapacity may be filled by the
Institutional Trustee following the procedures in this 0 (with the successor
being a Person who satisfies the eligibility requirement for a Delaware Trustee
set forth in this Declaration) (the “Successor Delaware Trustee”).


 


In case of the appointment hereunder of a successor
Relevant Trustee, the retiring Relevant Trustee and each successor Relevant
Trustee with respect to the Securities shall execute and deliver an amendment
hereto wherein each successor Relevant Trustee shall accept such appointment
and which (a) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, each successor Relevant
Trustee all the rights, powers, trusts and duties of the retiring Relevant
Trustee with respect to the Securities and the Trust and (b) shall add to
or change any of the provisions of this Declaration as shall be necessary to
provide for or facilitate the administration of the Trust by more than one
Relevant Trustee, it being understood that nothing herein or in such amendment
shall constitute such Relevant Trustees co-trustees and upon the execution and
delivery of such amendment the resignation or removal of the retiring Relevant
Trustee shall become effective to the extent provided therein and each such
successor Relevant Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Relevant Trustee; but, on request of the Trust or any successor Relevant
Trustee, such retiring Relevant Trustee shall duly assign, transfer and deliver
to such successor Relevant Trustee all Trust Property, all proceeds thereof and
money 


 


21

















 


held by such retiring Relevant
Trustee hereunder with respect to the Securities and the Trust subject to the
payment of all unpaid fees, expenses and indemnities of such retiring Relevant
Trustee.


 


No Institutional Trustee or Delaware Trustee shall be
liable for the acts or omissions to act of any Successor Institutional Trustee
or Successor Delaware Trustee, as the case may be.


 


The Holders of the Capital Securities will have no
right to vote to appoint, remove or replace the Administrators, which voting
rights are vested exclusively in the Holders of the Common Securities.


 


Any successor Delaware Trustee shall file an amendment
to the Certificate of Trust with the Secretary of State of the State of
Delaware identifying the name and principal place of business of such Delaware
Trustee in the State of Delaware.


 


Vacancies Among Trustees. If
a Trustee ceases to hold office for any reason and the number of Trustees is
not reduced pursuant to 0, a vacancy shall occur. A resolution certifying the
existence of such vacancy by the Trustees or, if there are more than two, a
majority of the Trustees, shall be conclusive evidence of the existence of such
vacancy. The vacancy shall be filled with a Trustee appointed in accordance
with 0.


 


Effect of Vacancies. The
death, resignation, retirement, removal, bankruptcy, dissolution, liquidation,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to dissolve, terminate or annul the Trust or terminate this Declaration. Whenever
a vacancy in the number of Trustees shall occur, until such vacancy is filled
by the appointment of a Trustee in accordance with 0, the Institutional Trustee
shall have all the powers granted to the Trustees and shall discharge all the
duties imposed upon the Trustees by this Declaration.


 


Meetings of the Trustees and the Administrators.
Meetings of the Administrators shall be held from time to time upon the
call of an Administrator. Regular meetings of the Administrators may be held in
person in the United States or by telephone, at a place (if applicable) and
time fixed by resolution of the Administrators. Notice of any in-person
meetings of the Trustees with the Administrators or meetings of the
Administrators shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than
48 hours before such meeting. Notice of any telephonic meetings of the
Trustees with the Administrators or meetings of the Administrators or any
committee thereof shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than
24 hours before a meeting. Notices shall contain a brief statement of the
time, place and anticipated purposes of the meeting. The presence (whether in
person or by telephone) of a Trustee or an Administrator, as the case may be,
at a meeting shall constitute a waiver of notice of such meeting except where
the Trustee or an Administrator, as the case may be, attends a meeting for the
express purpose of objecting to the transaction of any activity on the grounds
that the meeting has not been lawfully called or convened. Unless provided
otherwise in this Declaration, any action of the Trustees or the
Administrators, as the case may be, may be taken at a meeting by vote of a
majority of the Trustees or the Administrators present (whether in person or by
telephone) and eligible to vote with respect to such matter, provided that a
Quorum is present, or without a meeting by the unanimous written consent of the
Trustees or the Administrators. Meetings of the Trustees and the Administrators
together shall be held from time to time upon the call of any Trustee or an
Administrator.


 


Delegation of Power. 


 


Any Administrator may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21
that is a U.S. Person his or her power for the purpose of executing any
documents contemplated in 0; and


 


22

















 


the Administrators shall have power to delegate from
time to time to such of their number the doing of such things and the execution
of such instruments either in the name of the Trust or the names of the
Administrators or otherwise as the Administrators may deem expedient, to the
extent such delegation is not prohibited by applicable law or contrary to the
provisions of the Trust, as set forth herein.


 


Conversion, Consolidation or Succession to
Business. Any Person into which the Institutional Trustee
or the Delaware Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee shall
be a party, or any Person succeeding to all or substantially all the corporate
trust business of the Institutional Trustee or the Delaware Trustee shall be
the successor of the Institutional Trustee or the Delaware Trustee hereunder,
provided such Person shall be otherwise qualified and eligible under this
Article and, provided, further, that such Person shall file an
amendment to the Certificate of Trust with the Secretary of State of the State
of Delaware as contemplated in 0.


 


DISTRIBUTIONS


 


Distributions. Holders shall
receive Distributions in accordance with the applicable terms of the relevant
Holder’s Securities. Distributions shall be made on the Capital Securities and
the Common Securities in accordance with the preferences set forth in their
respective terms. If and to the extent that the Debenture Issuer makes a
payment of Interest or any principal on the Debentures held by the
Institutional Trustee, the Institutional Trustee shall and is directed, to the
extent funds are available for that purpose, to make a distribution (a “Distribution”)
of such amounts to Holders.


 


ISSUANCE OF SECURITIES


 


General Provisions Regarding Securities. 


 


The Administrators shall, on behalf of the Trust,
issue one series of capital securities substantially in the form of
Exhibit A-1 representing undivided beneficial interests in the assets of
the Trust having such terms as are set forth in Annex I and one series of
common securities representing undivided beneficial interests in the assets of
the Trust having such terms as are set forth in Annex I. The Trust shall
issue no securities or other interests in the assets of the Trust other than
the Capital Securities and the Common Securities. The Capital Securities rank pari passu to, and payment thereon shall be made Pro Rata
with, the Common Securities except that, where an Event of Default has occurred
and is continuing, the rights of Holders of the Common Securities to payment in
respect of Distributions and payments upon liquidation, redemption and
otherwise are subordinated to the rights to payment of the Holders of the
Capital Securities as set forth in Annex I.


 


The Certificates shall be signed on behalf of the
Trust by one or more Administrators. Such signature shall be the facsimile or
manual signature of any Administrator. In case any Administrator of the Trust
who shall have signed any of the Securities shall cease to be such
Administrator before the Certificates so signed shall be delivered by the
Trust, such Certificates nevertheless may be delivered as though the person who
signed such Certificates had not ceased to be such Administrator, and any
Certificate may be signed on behalf of the Trust by such persons who, at the
actual date of execution of such Security, shall be an Administrator of the
Trust, although at the date of the execution and delivery of the Declaration
any such person was not such an Administrator. A Capital Security shall not be
valid until authenticated by the facsimile or manual signature of an Authorized
Officer of the Institutional Trustee. Such signature shall be conclusive
evidence that the Capital Security has been authenticated 


 


23

















 


under this Declaration. Upon
written order of the Trust signed by one Administrator, the Institutional
Trustee shall authenticate the Capital Securities for original issue. The
Institutional Trustee may appoint an authenticating agent that is a U.S. Person
acceptable to the Trust to authenticate the Capital Securities. A Common
Security need not be so authenticated.


 


The consideration received by the Trust for the
issuance of the Securities shall constitute a contribution to the capital of
the Trust and shall not constitute a loan to the Trust.


 


Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and, except as provided in Section 9.1(b) with respect to the
Common Securities, non-assessable.


 


Every Person, by virtue of having become a Holder in
accordance with the terms of this Declaration, shall be deemed to have
expressly assented and agreed to the terms of, and shall be bound by, this
Declaration and the Guarantee.


 


Paying Agent, Transfer Agent and Registrar.
The Trust shall maintain in Wilmington, Delaware, an office or agency where
the Capital Securities may be presented for payment (“Paying Agent”),
and an office or agency where Securities may be presented for registration of
transfer or exchange (the “Transfer Agent”). The Trust shall keep or
cause to be kept at such office or agency a register for the purpose of
registering Securities, transfers and exchanges of Securities, such register to
be held by a registrar (the “Registrar”). The Administrators may appoint
the Paying Agent, the Registrar and the Transfer Agent and may appoint one or
more additional Paying Agents or one or more co-Registrars, or one or more
co-Transfer Agents in such other locations as it shall determine. The term “Paying
Agent” includes any additional paying agent, the term “Registrar”
includes any additional registrar or co-Registrar and the term “Transfer
Agent” includes any additional transfer agent. The Administrators may
change any Paying Agent, Transfer Agent or Registrar at any time without prior
notice to any Holder. The Administrators shall notify the Institutional Trustee
of the name and address of any Paying Agent, Transfer Agent and Registrar not a
party to this Declaration. The Administrators hereby initially appoint the
Institutional Trustee to act as Paying Agent, Transfer Agent and Registrar for
the Capital Securities and the Common Securities. The Institutional Trustee or
any of its Affiliates in the United States may act as Paying Agent, Transfer
Agent or Registrar.


 


Form and Dating. The Capital
Securities and the Institutional Trustee’s certificate of authentication
thereon shall be substantially in the form of Exhibit A-1, and the Common
Securities shall be substantially in the form of Exhibit A-2, each of
which is hereby incorporated in and expressly made a part of this Declaration. Certificates
may be typed, printed, lithographed or engraved or may be produced in any other
manner as is reasonably acceptable to the Administrators, as conclusively
evidenced by their execution thereof. The Securities may have letters, numbers,
notations or other marks of identification or designation and such legends or
endorsements required by law, stock exchange rule, agreements to which the
Trust is subject if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Sponsor). The Trust at the direction
of the Sponsor shall furnish any such legend not contained in Exhibit A-1
to the Institutional Trustee in writing. Each Capital Security shall be dated
on or before the date of its authentication. The terms and provisions of the
Securities set forth in Annex I and the forms of Securities set forth in
Exhibits A-1 and A-2 are part of the terms of this Declaration and to the
extent applicable, the Institutional Trustee, the Delaware Trustee, the
Administrators and the Sponsor, by their execution and delivery of this
Declaration, expressly agree to such terms and provisions and to be bound
thereby. Capital Securities will be issued only in blocks having a stated
liquidation amount of not less than $100,000.00 and any multiple of $1,000.00
in excess thereof.


 


The Capital Securities are being offered and sold by
the Trust pursuant to the Placement Agreement in definitive, registered form
without coupons and with the Restricted Securities Legend.


 


24

















 


Mutilated, Destroyed, Lost or Stolen Certificates.



 


If:


 


any mutilated Certificates should be surrendered to
the Registrar, or if the Registrar shall receive evidence to its satisfaction
of the destruction, loss or theft of any Certificate; and


 


there shall be delivered to the Registrar, the
Administrators and the Institutional Trustee such security or indemnity as may
be required by them to keep each of them harmless;


 


then, in the absence of
notice that such Certificate shall have been acquired by a protected purchaser,
an Administrator on behalf of the Trust shall execute (and in the case of a
Capital Security Certificate, the Institutional Trustee shall authenticate) and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like denomination. In connection with
the issuance of any new Certificate under this 0, the Registrar or the
Administrators may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection therewith. Any
duplicate Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the relevant Securities, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.


 


Temporary Securities. Until
definitive Securities are ready for delivery, the Administrators may prepare
and, in the case of the Capital Securities, the Institutional Trustee shall
authenticate, temporary Securities. Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the
Administrators consider appropriate for temporary Securities. Without
unreasonable delay, the Administrators shall prepare and, in the case of the
Capital Securities, the Institutional Trustee shall authenticate, definitive
Securities in exchange for temporary Securities.


 


Cancellation. The
Administrators at any time may deliver Securities to the Institutional Trustee
for cancellation. The Registrar shall forward to the Institutional Trustee any
Securities surrendered to it for registration of transfer, redemption or
payment. The Institutional Trustee shall promptly cancel all Securities
surrendered for registration of transfer, payment, replacement or cancellation
and shall dispose of such canceled Securities as the Administrators direct. The
Administrators may not issue new Securities to replace Securities that have
been paid or that have been delivered to the Institutional Trustee for
cancellation.


 


Rights of Holders; Waivers of Past Defaults. 


 


The legal title to the Trust Property is vested
exclusively in the Institutional Trustee (in its capacity as such) in
accordance with 0, and the Holders shall not have any right or title therein
other than the undivided beneficial interest in the assets of the Trust
conferred by their Securities and they shall have no right to call for any
partition or division of property, profits or rights of the Trust except as
described below. The Securities shall be personal property giving only the
rights specifically set forth therein and in this Declaration. The Securities
shall have no preemptive or similar rights.


 


For so long as any Capital Securities remain
outstanding, if upon an Acceleration Event of Default, the Debenture Trustee
fails or the holders of not less than 25% in principal amount of the
outstanding Debentures fail to declare the principal of all of the Debentures
to be immediately due and payable, the Holders of a Majority in liquidation
amount of the Capital Securities then outstanding shall have the right to make
such declaration by a notice in writing to the Institutional Trustee, the
Sponsor and the Debenture Trustee.


 


25

















 


At any time after a declaration of acceleration with
respect to the Debentures has been made and before a judgment or decree for
payment of the money due has been obtained by the Debenture Trustee as provided
in the Indenture, if the Institutional Trustee, subject to the provisions
hereof, fails to annul any such declaration and waive such default, the Holders
of a Majority in liquidation amount of the Capital Securities, by written
notice to the Institutional Trustee, the Sponsor and the Debenture Trustee, may
rescind and annul such declaration and its consequences if:


 


the Debenture Issuer has paid or deposited with the
Debenture Trustee a sum sufficient to pay


 


all overdue installments of interest on all of the
Debentures,


 


any accrued Additional Interest on all of the
Debentures,


 


the principal of (and premium, if any, on) any Debentures
that have become due otherwise than by such declaration of acceleration and
interest and Additional Interest thereon at the rate borne by the Debentures,
and


 


all sums paid or advanced by the Debenture Trustee
under the Indenture and the reasonable compensation, expenses, disbursements
and advances of the Debenture Trustee and the Institutional Trustee, their
agents and counsel; and


 


all Events of Default with respect to the Debentures,
other than the non-payment of the principal of the Debentures that has become
due solely by such acceleration, have been cured or waived as provided in
Section 5.7 of the Indenture.


 


The Holders of at least a Majority in liquidation
amount of the Capital Securities may, on behalf of the Holders of all the
Capital Securities, waive any past default under the Indenture or any Indenture
Event of Default, except a default or Indenture Event of Default in the payment
of principal or interest on the Debentures (unless such default or Indenture
Event of Default has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration has
been deposited with the Debenture Trustee) or a default under the Indenture or
an Indenture Event of Default in respect of a covenant or provision that under
the Indenture cannot be modified or amended without the consent of the holder
of each outstanding Debenture. No such rescission shall affect any subsequent
default or impair any right consequent thereon.


 


Upon receipt by the Institutional Trustee of written
notice declaring such an acceleration, or rescission and annulment thereof, by
Holders of any part of the Capital Securities, a record date shall be
established for determining Holders of outstanding Capital Securities entitled to
join in such notice, which record date shall be at the close of business on the
day the Institutional Trustee receives such notice. The Holders on such record
date, or their duly designated proxies, and only such Persons, shall be
entitled to join in such notice, whether or not such Holders remain Holders
after such record date; provided, that unless such declaration of
acceleration, or rescission and annulment, as the case may be, shall have
become effective by virtue of the requisite percentage having joined in such
notice prior to the day that is 90 days after such record date, such
notice of declaration of acceleration, or rescission and annulment, as the case
may be, shall automatically and without further action by any Holder be
canceled and of no further effect. Nothing in this paragraph shall prevent a
Holder, or a proxy of a Holder, from giving, after expiration of such 90-day
period, a new written notice of declaration of acceleration, or rescission and
annulment thereof, as the case may be, that is identical to a written notice
that has been canceled pursuant to the proviso to the preceding sentence, in
which event a new record date shall be established pursuant to the provisions
of this 0.


 


26

















 


Except as otherwise provided in paragraphs (a)
and (b) of this 0, the Holders of at least a Majority in liquidation amount of
the Capital Securities may, on behalf of the Holders of all the Capital
Securities, waive any past default or Event of Default and its consequences. Upon
such waiver, any such default or Event of Default shall cease to exist, and any
default or Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Declaration, but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent thereon.


 


DISSOLUTION AND TERMINATION OF TRUST


 


Dissolution and Termination of Trust.


 


The Trust shall dissolve on the first to occur of:


 


unless earlier dissolved, on December 15, 2042,
the expiration of the term of the Trust;


 


upon a Bankruptcy Event with respect to the Sponsor,
the Trust or the Debenture Issuer;


 


upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor (other than in connection with a merger,
consolidation or similar transaction not prohibited by the Indenture, this
Declaration or the Guarantee, as the case may be) or upon the revocation of the
charter of the Sponsor and the expiration of 90 days after the date of revocation
without a reinstatement thereof;


 


upon the distribution of the Debentures to the Holders
of the Securities, upon exercise of the right of the Holder of all of the
outstanding Common Securities to dissolve the Trust as provided in Annex I
hereto;


 


upon the entry of a decree of judicial dissolution of
the Holder of the Common Securities, the Sponsor, the Trust or the Debenture
Issuer;


 


when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have been
paid to the Holders in accordance with the terms of the Securities; or


 


before the issuance of any Securities, with the
consent of all of the Trustees and the Sponsor.


 


As soon as is practicable after the occurrence of an
event referred to in 0(a), and after satisfaction of liabilities to creditors
of the Trust as required by applicable law, including of the Statutory Trust
Act, and subject to the terms set forth in Annex I, the Institutional
Trustee shall terminate the Trust by filing a certificate of cancellation with
the Secretary of State of the State of Delaware.


 


The provisions of Section 2.9 and Article IX
shall survive the termination of the Trust.


 


27

















 


TRANSFER OF INTERESTS


 


General. 


 


Subject to 00, where Capital Securities are presented
to the Registrar or a co-registrar with a request to register a transfer or to
exchange them for an equal number of Capital Securities represented by
different certificates, the Registrar shall register the transfer or make the
exchange if its requirements for such transactions are met. To permit
registrations of transfer and exchanges, the Trust shall issue and the
Institutional Trustee shall authenticate Capital Securities at the Registrar’s
request.


 


Upon issuance of the Common Securities, the Sponsor
shall acquire and retain beneficial and record ownership of the Common
Securities and for so long as the Securities remain outstanding, and to the
fullest extent permitted by applicable law, the Sponsor shall maintain 100%
ownership of the Common Securities; provided, however, that any
permitted successor of the Sponsor, in its capacity as Debenture Issuer, under
the Indenture that is a U.S. Person may succeed to the Sponsor’s ownership of
the Common Securities.


 


Capital Securities may only be transferred, in whole
or in part, in accordance with the terms and conditions set forth in this
Declaration and in the terms of the Securities. To the fullest extent permitted
by applicable law, any transfer or purported transfer of any Security not made
in accordance with this Declaration shall be null and void and will be deemed
to be of no legal effect whatsoever and any such transferee shall be deemed not
to be the holder of such Capital Securities for any purpose, including but not
limited to the receipt of Distributions on such Capital Securities, and such
transferee shall be deemed to have no interest whatsoever in such Capital
Securities.


 


The Registrar shall provide for the registration of
Securities and of transfers of Securities, which will be effected without
charge but only upon payment (with such indemnity as the Registrar may require)
in respect of any tax or other governmental charges that may be imposed in
relation to it. Upon surrender for registration of transfer of any Securities,
the Registrar shall cause one or more new Securities of the same tenor to be
issued in the name of the designated transferee or transferees. Every Security
surrendered for registration of transfer shall be accompanied by a written instrument
of transfer in form satisfactory to the Registrar duly executed by the Holder
or such Holder’s attorney duly authorized in writing. Each Security surrendered
for registration of transfer shall be canceled by the Institutional Trustee
pursuant to 0. A transferee of a Security shall be entitled to the rights and
subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Security. By acceptance of a Security, each transferee shall be
deemed to have agreed to be bound by this Declaration.


 


The Trust shall not be required (i) to issue,
register the transfer of, or exchange any Securities during a period beginning
at the opening of business fifteen days before the day of any selection of
Securities for redemption and ending at the close of business on the earliest
date on which the relevant notice of redemption is deemed to have been given to
all Holders of the Securities to be redeemed, or (ii) to register the
transfer or exchange of any Security so selected for redemption in whole or in
part, except the unredeemed portion of any Security being redeemed in part.


 


Transfer Procedures and Restrictions. 


 


The Capital Securities shall bear the Restricted
Securities Legend, which shall not be removed unless there is delivered to the
Trust such satisfactory evidence, which may include an opinion of counsel
satisfactory to the Institutional Trustee, as may be reasonably required by the
Trust, that neither the legend nor the restrictions on transfer set forth
therein are required to ensure that transfers thereof comply 


 


28

















 


with the
provisions of the Securities Act. Upon provision of such satisfactory evidence,
the Institutional Trustee, at the written direction of the Trust, shall authenticate
and deliver Capital Securities that do not bear the legend.


 


Except as permitted by 0(a), each Capital Security
shall bear a legend (the “Restricted Securities Legend”) in
substantially the following form and a Capital Security shall not be transferred
except in compliance with such legend, unless otherwise determined by the
Sponsor, upon the advice of counsel expert in securities law, in accordance
with applicable law:


 


THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), ANY STATE SECURITIES
LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THIS SECURITY NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY ONLY (A) TO THE SPONSOR OR
THE TRUST, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A SO LONG AS THIS SECURITY IS ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A IN ACCORDANCE WITH RULE 144A,
(D) TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
RULE 903 OR RULE 904 (AS APPLICABLE) OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE
MEANING OF SUBPARAGRAPH (A) OF RULE 501 UNDER THE SECURITIES ACT THAT
IS ACQUIRING THIS CAPITAL SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF
SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH
A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE SPONSOR’S AND THE TRUST’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM IN ACCORDANCE WITH THE DECLARATION OF
TRUST, A COPY OF WHICH MAY BE OBTAINED FROM THE SPONSOR OR THE TRUST. HEDGING
TRANSACTIONS INVOLVING THIS SECURITY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE
WITH THE SECURITIES ACT.


 


THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT,
INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I
OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”),
OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) 


 


29

















 


(EACH A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS
INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY, AND NO
PERSON INVESTING “PLAN ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THE SECURITIES
OR ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR
EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED
TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER
APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SECURITY IS NOT
PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO
SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THE SECURITIES OR ANY
INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING
THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING
OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS
APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE
BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE WILL NOT
RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975
OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE
EXEMPTION.


 


THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED
ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000.00 (100
SECURITIES) AND MULTIPLES OF $1,000.00 IN EXCESS THEREOF. ANY ATTEMPTED
TRANSFER OF SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN
$100,000.00 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER.


 


THE HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY
WITH THE FOREGOING RESTRICTIONS.


 


To permit registrations of transfers and exchanges,
the Trust shall execute and the Institutional Trustee shall authenticate
Capital Securities at the Registrar’s request.


 


Registrations of transfers or exchanges will be
effected without charge, but only upon payment (with such indemnity as the
Registrar or the Sponsor may require) in respect of any tax or other
governmental charge that may be imposed in relation to it.


 


All Capital Securities issued upon any registration of
transfer or exchange pursuant to the terms of this Declaration shall evidence
the same security and shall be entitled to the same benefits under this
Declaration as the Capital Securities surrendered upon such registration of
transfer or exchange.


 


Deemed Security Holders. The
Trust, the Administrators, the Trustees, the Paying Agent, the Transfer Agent
or the Registrar may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust, the
Administrators, the Trustees, the Paying Agent, the Transfer Agent or the
Registrar shall have actual or other notice thereof.


 


30

















 


LIMITATION OF LIABILITY OF

HOLDERS OF SECURITIES, INSTITUTIONAL TRUSTEE OR OTHERS


 


Liability.  


 


Except as expressly set forth in this Declaration, the
Guarantee and the terms of the Securities, the Sponsor shall not be:


 


personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; or


 


required to pay to the Trust or to any Holder of the
Securities any deficit upon dissolution of the Trust or otherwise.


 


The Holder of the Common Securities shall be liable
for all of the debts and obligations of the Trust (other than with respect to
the Securities) to the extent not satisfied out of the Trust’s assets.


 


Pursuant to the Statutory Trust Act, the Holders of
the Capital Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.


 


Exculpation. 


 


No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in
a manner such Indemnified Person reasonably believed to be within the scope of
the authority conferred on such Indemnified Person by this Declaration 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.


 


An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other Person’s
professional or expert competence and, if selected by such Indemnified Person,
has been selected by such Indemnified Person with reasonable care by or on
behalf of the Trust, 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 Securities might properly be paid.


 


Fiduciary Duty.  


 


To the extent that, at law or in equity, an
Indemnified Person has duties (including fiduciary duties) and liabilities
relating thereto to the Trust or to any other Covered Person, an Indemnified
Person acting under this Declaration shall not be liable to the Trust or to any
other Covered Person for its good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person otherwise existing
at law or in equity, are agreed by the parties hereto to replace such other
duties and liabilities of the Indemnified Person.


 


Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:


 


31

















 


in its “discretion” or under a grant of similar
authority, the Indemnified Person shall be entitled to consider such interests
and factors as it desires, including its own interests, and shall have no duty
or obligation to give any consideration to any interest of or factors affecting
the Trust or any other Person; or


 


in its “good faith” or under another express standard,
the Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or by
applicable law.


 


Indemnification.  


 


The Sponsor shall indemnify, to the full extent
permitted by law, any Indemnified Person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the Trust) arising out of or in connection
with the acceptance or administration of this Declaration by reason of the fact
that he is or was an Indemnified Person against expenses (including reasonable
attorneys’ fees and expenses), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Trust, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the Indemnified Person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or proceeding,
had reasonable cause to believe that his conduct was unlawful.


 


The Sponsor shall indemnify, to the full extent
permitted by law, any Indemnified Person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by or
in the right of the Trust to procure a judgment in its favor arising out of or
in connection with the acceptance or administration of this Declaration by
reason of the fact that he is or was an Indemnified Person against expenses
(including reasonable attorneys’ fees and expenses) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the Trust; provided, however,
that no such indemnification shall be made in respect of any claim, issue or
matter as to which such Indemnified Person shall have been adjudged to be
liable to the Trust unless and only to the extent that the court in which such
action or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which such court shall deem proper.


 


To the extent that an Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action without
prejudice or the settlement of an action without admission of liability) in
defense of any action, suit or proceeding referred to in paragraphs (a)
and (b) of this 0, or in defense of any claim, issue or matter therein, he
shall be indemnified, to the full extent permitted by law, against expenses
(including attorneys’ fees and expenses) actually and reasonably incurred by
him in connection therewith.


 


Any indemnification of an Administrator under
paragraphs (a) and (b) of this 0 (unless ordered by a court) shall be made
by the Sponsor only as authorized in the specific case upon a determination
that indemnification of the Indemnified Person is proper in the circumstances
because he has met the applicable standard of conduct set forth in
paragraphs (a) and (b). Such determination shall be made (i) by the
Administrators by a majority vote of a Quorum consisting of such Administrators
who were not parties to such action, suit or proceeding, (ii) if such a
Quorum is not obtainable, or, even if obtainable, if 


 


32

















 


a Quorum of disinterested
Administrators so directs, by independent legal counsel in a written opinion,
or (iii) by the Common Security Holder of the Trust.


 


To the fullest extent permitted by law, expenses
(including reasonable attorneys’ fees and expenses) incurred by an Indemnified
Person in defending a civil, criminal, administrative or investigative action,
suit or proceeding referred to in paragraphs (a) and (b) of this 0 shall
be paid by the Sponsor in advance of the final disposition of such action, suit
or proceeding upon receipt of an undertaking by or on behalf of such
Indemnified Person to repay such amount if it shall ultimately be determined
that he is not entitled to be indemnified by the Sponsor as authorized in this
0. Notwithstanding the foregoing, no advance shall be made by the Sponsor if a
determination is reasonably and promptly made (i) by the Administrators by
a majority vote of a Quorum of disinterested Administrators, (ii) if such
a Quorum is not obtainable, or, even if obtainable, if a quorum of disinterested
Administrators so directs, by independent legal counsel in a written opinion or
(iii) by the Common Security Holder of the Trust, that, based upon the
facts known to the Administrators, counsel or the Common Security Holder at the
time such determination is made, such Indemnified Person acted in bad faith or
in a manner that such Indemnified Person did not believe to be in the best
interests of the Trust, or, with respect to any criminal proceeding, that such
Indemnified Person believed or had reasonable cause to believe his conduct was
unlawful. In no event shall any advance be made in instances where the
Administrators, independent legal counsel or the Common Security Holder
reasonably determine that such Indemnified Person deliberately breached his
duty to the Trust or its Common or Capital Security Holders.


 


The Trustees, at the sole cost and expense of the
Sponsor, retain the right to representation by counsel of their own choosing in
any action, suit or any other proceeding for which they are indemnified under
paragraphs (a) and (b) of this 0, without affecting their right to
indemnification hereunder or waiving any rights afforded to it under this
Declaration or applicable law.


 


The indemnification and advancement of expenses
provided by, or granted pursuant to, the other paragraphs of this 0 shall not
be deemed exclusive of any other rights to which those seeking indemnification
and advancement of expenses may be entitled under any agreement, vote of
stockholders or disinterested directors of the Sponsor or Capital Security
Holders of the Trust or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office. All rights to
indemnification under this Section 9.4 shall be deemed to be provided by a
contract between the Sponsor and each Indemnified Person who serves in such
capacity at any time while this 0 is in effect. Any repeal or modification of
this 0 shall not affect any rights or obligations then existing.


 


The Sponsor or the Trust may purchase and maintain
insurance on behalf of any Person who is or was an Indemnified Person against
any liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Sponsor would have the
power to indemnify him against such liability under the provisions of this 0.


 


For purposes of this 0, references to “the Trust”
shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in a
consolidation or merger, so that any Person who is or was a director, trustee,
officer or employee of such constituent entity, or is or was serving at the
request of such constituent entity as a director, trustee, officer, employee or
agent of another entity, shall stand in the same position under the provisions
of this 0 with respect to the resulting or surviving entity as he would have
with respect to such constituent entity if its separate existence had
continued.


 


The indemnification and advancement of expenses
provided by, or granted pursuant to, this 0 shall, unless otherwise provided
when authorized or ratified, (i) continue as to a Person who has ceased to
be an Indemnified Person and shall inure to the benefit of the heirs, executors
and administrators of such a 


 


33

















 


Person; and
(ii) survive the termination or expiration of this Declaration or the
earlier removal or resignation of an Indemnified Person.


 


Outside Businesses. Any Covered
Person, the Sponsor, the Delaware Trustee and the Institutional Trustee may
engage in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the
business of the Trust, and the Trust and the Holders of Securities shall have
no rights by virtue of this Declaration in and to such independent ventures or
the income or profits derived therefrom, and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be deemed
wrongful or improper. None of any Covered Person, the Sponsor, the Delaware
Trustee or the Institutional Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such
opportunity is of a character that, if presented to the Trust, could be taken
by the Trust, and any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Covered Person, the Delaware
Trustee and the Institutional Trustee may engage or be interested in any
financial or other transaction with the Sponsor or any Affiliate of the
Sponsor, or may act as depositary for, trustee or agent for, or act on any
committee or body of holders of, securities or other obligations of the Sponsor
or its Affiliates.


 


Compensation; Fee.The
Sponsor agrees:


 


to pay to the Trustees from time to time such
compensation for all services rendered by them hereunder as the parties shall
agree from time to time (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust); and


 


except as otherwise expressly provided herein, to
reimburse the Trustees upon request for all reasonable expenses, disbursements
and advances incurred or made by the Trustees in accordance with any provision
of this Declaration (including the reasonable compensation and the expenses and
disbursements of their respective agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence, bad faith or
willful misconduct.


 


For purposes of clarification, this Section 9.6
does not contemplate the payment by the Sponsor of acceptance or annual
administration fees owing to the Trustees under this Declaration or the fees
and expenses of the Trustees’ counsel in connection with the closing of the
transactions contemplated by this Declaration.


 


The provisions of this 0 shall survive the dissolution
of the Trust and the termination of this Declaration and the removal or
resignation of any Trustee.


 


No Trustee may claim any lien or charge on any
property of the Trust as a result of any amount due pursuant to this 0.


 


ACCOUNTING


 


Fiscal Year. The fiscal year
(“Fiscal Year”) of the Trust shall be the calendar year, or such other
year as is required by the Code.


 


34

















 


Certain Accounting Matters. 


 


At all times during the existence of the Trust, the
Administrators shall keep, or cause to be kept at the principal office of the
Trust in the United States, as defined for purposes of Treasury Regulations
section 301.7701-7, full books of account, records and supporting documents,
which shall reflect in reasonable detail each transaction of the Trust. The
books of account shall be maintained, at the Sponsor’s expense, in accordance
with generally accepted accounting principles, consistently applied. The books
of account and the records of the Trust shall be examined by and reported upon
(either separately or as part of the Sponsor’s regularly prepared consolidated
financial report) as of the end of each Fiscal Year of the Trust by a firm of
independent certified public accountants selected by the Administrators.


 


The Administrators shall cause to be duly prepared and
delivered to each of the Holders of Securities Form 1099 or such other annual
United States federal income tax information statement required by the Code,
containing such information with regard to the Securities held by each Holder
as is required by the Code and the Treasury Regulations. Notwithstanding any
right under the Code to deliver any such statement at a later date, the
Administrators shall endeavor to deliver all such statements within
30 days after the end of each Fiscal Year of the Trust.


 


The Administrators, at the Sponsor’s expense, shall
cause to be duly prepared at the principal office of the Sponsor in the United
States, as ‘United States’ is defined in Section 7701(a)(9) of the Code
(or at the principal office of the Trust if the Sponsor has no such principal
office in the United States), and filed an annual United States federal income
tax return on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Administrators on behalf of the Trust with any state or local taxing
authority.


 


Banking. The Trust shall
maintain in the United States, as defined for purposes of Treasury Regulations
section 301.7701-7, one or more bank accounts in the name and for the sole
benefit of the Trust; provided, however, that all payments of
funds in respect of the Debentures held by the Institutional Trustee shall be
made directly to the Property Account and no other funds of the Trust shall be
deposited in the Property Account. The sole signatories for such accounts
(including the Property Account) shall be designated by the Institutional
Trustee.


 


Withholding. The
Institutional Trustee or any Paying Agent and the Administrators shall comply
with all withholding requirements under United States federal, state and local
law. The Institutional Trustee or any Paying Agent shall request, and each
Holder shall provide to the Institutional Trustee or any Paying Agent, such
forms or certificates as are necessary to establish an exemption from
withholding with respect to the Holder, and any representations and forms as
shall reasonably be requested by the Institutional Trustee or any Paying Agent
to assist it in determining the extent of, and in fulfilling, its withholding
obligations. The Administrators shall file required forms with applicable
jurisdictions and, unless an exemption from withholding is properly established
by a Holder, shall remit amounts withheld with respect to the Holder to
applicable jurisdictions. To the extent that the Institutional Trustee or any
Paying Agent is required to withhold and pay over any amounts to any authority
with respect to distributions or allocations to any Holder, the amount withheld
shall be deemed to be a Distribution in the amount of the withholding to the
Holder. In the event of any claimed overwithholding, Holders shall be limited
to an action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Institutional
Trustee or any Paying Agent may reduce subsequent Distributions by the amount
of such withholding.


 


35

















 


AMENDMENTS AND MEETINGS


 


Amendments. 


 


Except as otherwise provided in this Declaration or by
any applicable terms of the Securities, this Declaration may only be amended by
a written instrument approved and executed (i) by the Institutional Trustee,
or (ii) if the amendment affects the rights, powers, duties, obligations
or immunities of the Delaware Trustee, by the Delaware Trustee.


 


Notwithstanding any other provision of this
Article XI, an amendment may be made, and any such purported amendment shall
be valid and effective only if:


 


the Institutional Trustee shall have first received


 


an Officers’ Certificate from each of the Trust and
the Sponsor that such amendment is permitted by, and conforms to, the terms of
this Declaration (including the terms of the Securities); and


 


an opinion of counsel (who may be counsel to the
Sponsor or the Trust) that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and


 


the result of such amendment would not be to


 


cause the Trust to cease to be classified for purposes
of United States federal income taxation as a grantor trust; or


 


cause the Trust to be deemed to be an Investment
Company required to be registered under the Investment Company Act.


 


Except as provided in 0(d), (e) or (h), no amendment
shall be made, and any such purported amendment shall be void and ineffective,
unless the Holders of a Majority in liquidation amount of the Capital
Securities shall have consented to such amendment.


 


In addition to and notwithstanding any other provision
in this Declaration, without the consent of each affected Holder, this
Declaration may not be amended to (i) change the amount or timing of any
Distribution on the Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the Securities as of a specified
date or change any conversion or exchange provisions or (ii) restrict the
right of a Holder to institute suit for the enforcement of any such payment on or
after such date.


 


Sections 9.1(b) and 9.1(c) and this 0 shall not
be amended without the consent of all of the Holders of the Securities.


 


Article III shall not be amended without the
consent of the Holders of a Majority in liquidation amount of the Common
Securities.


 


The rights of the Holders of the Capital Securities
under Article IV to appoint and remove Trustees shall not be amended
without the consent of the Holders of a Majority in liquidation amount of the
Capital Securities.


 


36

















 


This Declaration may be amended by the Institutional
Trustee and the Holders of a Majority in liquidation amount of the Common
Securities without the consent of the Holders of the Capital Securities to:


 


cure any ambiguity;


 


correct or supplement any provision in this
Declaration that may be defective or inconsistent with any other provision of
this Declaration;


 


add to the covenants, restrictions or obligations of
the Sponsor; or


 


modify, eliminate or add to any provision of this
Declaration to such extent as may be necessary to ensure that the Trust will be
classified for United States federal income tax purposes at all times as a
grantor trust and will not be required to register as an Investment Company
(including without limitation to conform to any change in Rule 3a-5,
Rule 3a-7 or any other applicable rule under the Investment Company Act or
written change in interpretation or application thereof by any legislative
body, court, government agency or regulatory authority) which amendment does
not have a material adverse effect on the rights, preferences or privileges of
the Holders of Securities;


 


provided, however, that no
such modification, elimination or addition referred to in clauses (i),
(ii), (iii) or (iv) shall adversely affect in any material respect the powers,
preferences or special rights of Holders of Capital Securities.


 


Meetings of the Holders of Securities; Action by
Written Consent. 


 


Meetings of the Holders of any class of Securities may
be called at any time by the Administrators (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration or the terms
of the Securities. The Administrators shall call a meeting of the Holders of
such class if directed to do so by the Holders of at least 10% in liquidation
amount of such class of Securities. Such direction shall be given by delivering
to the Administrators one or more calls in a writing stating that the signing
Holders of the Securities wish to call a meeting and indicating the general or
specific purpose for which the meeting is to be called. Any Holders of the
Securities calling a meeting shall specify in writing the Certificates held by the
Holders of the Securities exercising the right to call a meeting and only those
Securities represented by such Certificates shall be counted for purposes of
determining whether the required percentage set forth in the second sentence of
this paragraph has been met.


 


Except to the extent otherwise provided in the terms
of the Securities, the following provisions shall apply to meetings of Holders
of the Securities:


 


notice of any such meeting shall be given to all the
Holders of the Securities having a right to vote thereat at least 7 days
and not more than 60 days before the date of such meeting. Whenever a
vote, consent or approval of the Holders of the Securities is permitted or
required under this Declaration, such vote, consent or approval may be given at
a meeting of the Holders of the Securities. Any action that may be taken at a
meeting of the Holders of the Securities may be taken without a meeting if a
consent in writing setting forth the action so taken is signed by the Holders
of the Securities owning not less than the minimum amount of Securities in
liquidation amount that would be necessary to authorize or take such action at
a meeting at which all Holders of the Securities having a right to vote thereon
were present and voting. Prompt notice of the taking of action without a
meeting shall be given to the Holders of the Securities entitled to vote who
have not consented in writing. The Administrators may specify that any written
ballot 


 


37

















 


submitted to the Holders of the Securities for the
purpose of taking any action without a meeting shall be returned to the Trust
within the time specified by the Administrators;


 


each Holder of a Security may authorize any Person to
act for it by proxy on all matters in which a Holder of Securities is entitled
to participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration of
11 months from the date thereof unless otherwise provided in the proxy. Every
proxy shall be revocable at the pleasure of the Holder of the Securities
executing it. Except as otherwise provided herein, all matters relating to the
giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation and the
Holders of the Securities were stockholders of a Delaware corporation; each
meeting of the Holders of the Securities shall be conducted by the
Administrators or by such other Person that the Administrators may designate;
and


 


unless the Statutory Trust Act, this Declaration, or
the terms of the Securities otherwise provides, the Administrators, in their
sole discretion, shall establish all other provisions relating to meetings of
Holders of Securities, including notice of the time, place or purpose of any
meeting at which any matter is to be voted on by any Holders of the Securities,
waiver of any such notice, action by consent without a meeting, the
establishment of a record date, quorum requirements, voting in person or by
proxy or any other matter with respect to the exercise of any such right to
vote; provided, however, that each meeting shall be conducted in
the United States (as that term is defined in Treasury Regulations section
301.7701-7).


 


REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND THE
DELAWARE TRUSTEE


 


Representations and Warranties of Institutional
Trustee. The initial Institutional Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Institutional Trustee represents and warrants to the Trust and
the Sponsor at the time of the Successor Institutional Trustee’s acceptance of
its appointment as Institutional Trustee, that:


 


the Institutional Trustee is a Delaware banking
corporation with trust powers, duly organized and validly existing under the
laws of the State of Delaware with trust power and authority to execute and
deliver, and to carry out and perform its obligations under the terms of, this
Declaration;


 


the execution, delivery and performance by the
Institutional Trustee of this Declaration has been duly authorized by all
necessary corporate action on the part of the Institutional Trustee. This
Declaration has been duly executed and delivered by the Institutional Trustee,
and it constitutes a legal, valid and binding obligation of the Institutional
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency, and other
similar laws affecting creditors’ rights generally and to general principles of
equity (regardless of whether considered in a proceeding in equity or at law);


 


the execution, delivery and performance of this
Declaration by the Institutional Trustee does not conflict with or constitute a
breach of the charter or by-laws of the Institutional Trustee; and


 


no consent, approval or authorization of, or
registration with or notice to, any state or federal banking authority is
required for the execution, delivery or performance by the Institutional
Trustee of this Declaration.


 


38
















 


Representations of the Delaware
Trustee. The Trustee that acts as initial Delaware
Trustee represents and warrants to the Trust and to the Sponsor at the date of
this Declaration, and each Successor Delaware Trustee represents and warrants
to the Trust and the Sponsor at the time of the Successor Delaware Trustee’s
acceptance of its appointment as Delaware Trustee that:


 


if it is not a natural person, the Delaware Trustee is
duly organized, validly existing and in good standing under the laws of the
State of Delaware;


 


if it is not a natural person, the execution, delivery
and performance by the Delaware Trustee of this Declaration has been duly
authorized by all necessary corporate action on the part of the Delaware
Trustee. This Declaration has been duly executed and delivered by the Delaware
Trustee, and under Delaware law (excluding any securities laws) constitutes a
legal, valid and binding obligation of the Delaware Trustee, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency and other similar laws affecting
creditors’ rights generally and to general principles of equity and the
discretion of the court (regardless of whether considered in a proceeding in
equity or at law);


 


if it is not a natural person, the execution, delivery
and performance of this Declaration by the Delaware Trustee does not conflict
with or constitute a breach of the charter or by-laws of the Delaware Trustee;


 


it has trust power and authority to execute and deliver,
and to carry out and perform its obligations under the terms of, this
Declaration;


 


no consent, approval or authorization of, or
registration with or notice to, any state or federal banking authority
governing the trust powers of the Delaware Trustee is required for the
execution, delivery or performance by the Delaware Trustee of this Declaration;
and


 


the Delaware Trustee is a natural person who is a
resident of the State of Delaware or, if not a natural person, it is an entity
which has its principal place of business in the State of Delaware and, in
either case, a Person that satisfies for the Trust the requirements of Section
3807 of the Statutory Trust Act.


 


MISCELLANEOUS


 


Notices. All notices
provided for in this Declaration shall be in writing, duly signed by the party
giving such notice, and shall be delivered, telecopied (which telecopy shall be
followed by notice delivered or mailed by first class mail) or mailed by first
class mail, as follows:


 


if given to the Trust, in care of the Administrators
at the Trust’s mailing address set forth below (or such other address as the
Trust may give notice of to the Holders of the Securities):


 


Yadkin Valley Statutory Trust I


c/o Yadkin Valley Financial Corporation


209 North Bridge Street


Elkin, North Carolina 
28621


Attention: 
Edwin E. Laws


Telecopy: 
336-835-8858


 


39

















 


if given to the Delaware Trustee, at the Delaware
Trustee’s mailing address set forth below (or such other address as the
Delaware Trustee may give notice of to the Holders of the Securities):


 


Wilmington Trust Company


Rodney Square North


1100 North Market Street


Wilmington, Delaware 
19890-1600


Attention: 
Corporate Trust Administration


Telecopy: 
302-636-4140


 


if given to the Institutional Trustee, at the
Institutional Trustee’s mailing address set forth below (or such other address
as the Institutional Trustee may give notice of to the Holders of the
Securities):


 


Wilmington Trust Company


Rodney Square North


1100 North Market Street


Wilmington, Delaware 
19890-1600


Attention: 
Corporate Trust Administration


Telecopy: 
302-636-4140


 


if given to the Holder of the Common Securities, at
the mailing address of the Sponsor set forth below (or such other address as
the Holder of the Common Securities may give notice of to the Trust):


 


Yadkin Valley Financial Corporation


209 North Bridge Street


Elkin, North Carolina 
28621


Attention: 
Edwin E. Laws


Telecopy: 
336-835-8858


 


if given to any other Holder, at the address set forth
on the books and records of the Trust.


 


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.


 


Governing Law. This
Declaration and the rights of the parties hereunder shall be governed by and
interpreted in accordance with the law of the State of Delaware and all rights
and remedies shall be governed by such laws without regard to the principles of
conflict of laws of the State of Delaware or any other jurisdiction that would
call for the application of the law of any jurisdiction other than the State of
Delaware; provided, however, that there shall not be applicable
to the Trust, the Trustees or this Declaration any provision of the laws
(statutory or common) of the State of Delaware pertaining to trusts that relate
to or regulate, in a manner inconsistent with the terms hereof (a) the
filing with any court or governmental body or agency of trustee accounts or
schedules of trustee fees and charges, (b) affirmative requirements to
post bonds for trustees, officers, agents or employees of a trust, (c) the
necessity for obtaining court or other governmental approval concerning the
acquisition, holding or disposition of real or personal property, (d) fees
or other sums payable to trustees, officers, agents or employees of a trust,
(e) the allocation of receipts and expenditures to income or principal, or
(f) restrictions or limitations on the permissible nature, amount or
concentration of trust investments or requirements relating to the titling,
storage or other manner of holding or investing trust assets.


 


40

















 


Intention of the Parties. It
is the intention of the parties hereto that the Trust be classified for United
States federal income tax purposes as a grantor trust. The provisions of this
Declaration shall be interpreted to further this intention of the parties.


 


Headings. Headings contained
in this Declaration are inserted for convenience of reference only and do not
affect the interpretation of this Declaration or any provision hereof.


 


Successors and Assigns. Whenever
in this Declaration any of the parties hereto is named or referred to, the
successors and assigns of such party shall be deemed to be included, and all
covenants and agreements in this Declaration by the Sponsor and the Trustees
shall bind and inure to the benefit of their respective successors and assigns,
whether or not so expressed.


 


Partial Enforceability. If
any provision of this Declaration, or the application of such provision to any
Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.


 


Counterparts. This
Declaration may contain more than one counterpart of the signature page and
this Declaration may be executed by the affixing of the signature of each of
the Trustees and Administrators 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 single
signature page.


 


Signatures appear on the
following page


 


41

















 


IN WITNESS WHEREOF, the undersigned have caused these
presents to be executed as of the day and year first above written.


 


	
   

  	
  WILMINGTON TRUST
  COMPANY,

  
	
   

  	
  as Delaware
  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ W. Thomas
  Morris, II

  	
   

  
	
   

  	
   

  	
  Name: W. Thomas
  Morris, II

  
	
   

  	
   

  	
  Title: Assistant
  Vice President

  
						



 


 


	
   

  	
  WILMINGTON TRUST
  COMPANY,

  
	
   

  	
  as Institutional
  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ W. Thomas
  Morris, II

  	
   

  
	
   

  	
   

  	
  Name: W. Thomas
  Morris, II

  
	
   

  	
   

  	
  Title: Assistant
  Vice President

  
						



 


 


	
   

  	
  YADKIN VALLEY
  FINANCIAL CORPORATION, as 

  Sponsor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Edwin E.
  Laws

  	
   

  
	
   

  	
   

  	
  Name: Edwin E.
  Laws

  
	
   

  	
   

  	
  Title: Chief
  Financial Officer

  
						



 


	
   

  	
  ADMINISTRATORS
  OF YADKIN VALLEY 

  STATUTORY TRUST I

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ William A.
  Long

  	
   

  
	
   

  	
   

  	
  Administrator

  
						



 


 


	
   

  	
  By:

  	
   

  	
  /s/ Edwin E.
  Laws

  	
   

  
	
   

  	
   

  	
  Administrator

  
						



 


 


	
   

  	
  By:

  	
   

  	
  /s/ Julie Mason

  	
   

  
	
   

  	
   

  	
  Administrator

  
						



 


42

















 


ANNEX I


 


TERMS OF
SECURITIES


 


Pursuant to 0 of the Amended and Restated Declaration
of Trust, dated as of November 1, 2007 (as amended from time to time, the “Declaration”),
the designation, rights, privileges, restrictions, preferences and other terms
and provisions of the Capital Securities and the Common Securities are set out
below (each capitalized term used but not defined herein has the meaning set
forth in the Declaration):


 


1.                                       Designation
and Number.


 


(a)                                  25,000
Floating Rate Capital Securities of Yadkin Valley Statutory Trust I (the “Trust”),
with an aggregate stated liquidation amount with respect to the assets of the
Trust of twenty-five million dollars ($25,000,000.00) and a stated liquidation
amount with respect to the assets of the Trust of $1,000.00 per Capital
Security, are hereby designated for the purposes of identification only as the “Capital
Securities”. The Capital Security Certificates evidencing the Capital Securities
shall be substantially in the form of Exhibit A-1 to the Declaration, with
such changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice.


 


(b)                                 774
Floating Rate Common Securities of the Trust (the “Common Securities”)
will be evidenced by Common Security Certificates substantially in the form of
Exhibit A-2 to the Declaration, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice.


 


2.                                       Distributions.


 


(a)                                  Distributions
will be payable on each Security for the Distribution Period beginning on (and
including) the date of original issuance and ending on (but excluding) the
Distribution Payment Date in December 2007 at a rate per annum of 6.21375% and
shall bear interest for each successive Distribution Period beginning on (and
including) the Distribution Payment Date in December 2007, and each succeeding
Distribution Payment Date, and ending on (but excluding) the next succeeding
Distribution Payment Date at a rate per annum equal to the 3-Month LIBOR,
determined as described below, plus 1.32% (the “Coupon Rate”), applied
to the stated liquidation amount thereof, such rate being the rate of interest
payable on the Debentures to be held by the Institutional Trustee. Distributions
in arrears will bear interest thereon compounded quarterly at the applicable
Distribution Rate (to the extent permitted by law). Distributions, as used
herein, include cash distributions and any such compounded distributions unless
otherwise noted. A Distribution is payable only to the extent that payments are
made in respect of the Debentures held by the Institutional Trustee and to the
extent the Institutional Trustee has funds available therefor. The amount of the
Distribution payable for any Distribution Period will be calculated by applying
the Distribution Rate to the stated liquidation amount outstanding at the
commencement of the Distribution Period and multiplying each such number by the
actual number of days in the Distribution Period concerned divided by 360. All
percentages resulting from any calculations on the Capital Securities will be
rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded upward (e.g.,
9.876545% (or .09876545) being rounded to 9.87655% (or .0987655), and all
dollar amounts used in or resulting from such calculation will be rounded to
the nearest cent (with one-half cent being rounded upward)).


 


(b)                                 Distributions
on the Securities will be cumulative, will accrue from the date of original
issuance, and will be payable, subject to extension of distribution payment
periods as described herein, quarterly in arrears on March 15,
June 15, September 15 and December 15 of each year, or if such
day is not a Business Day, then the next succeeding Business Day (each a “Distribution
Payment Date”) 


 


I-1

















 


(it being understood that
interest accrues for any such non-Business Day), commencing on the Distribution
Payment Date in December 2007 when, as and if available for payment. The
Debenture Issuer has the right under the Indenture to defer payments of
interest on the Debentures, so long as no Acceleration Event of Default has
occurred and is continuing, by extending the payment period on the Debentures
for up to 20 consecutive quarterly periods (each an “Extension Period”)
at any time and from time to time, subject to the conditions described below,
during which Extension Period no interest shall be due and payable. During any
Extension Period, interest will continue to accrue on the Debentures, and
interest on such accrued interest will accrue at an annual rate equal to the
Distribution Rate in effect for each such Extension Period, compounded
quarterly from the date such interest would have been payable were it not for
the Extension Period, to the extent permitted by law (such interest referred to
herein as “Additional Interest”). No Extension Period may end on a date
other than a Distribution Payment Date. At the end of any such Extension
Period, the Debenture Issuer shall pay all interest then accrued and unpaid on
the Debentures (together with Additional Interest thereon); provided, however,
that no Extension Period may extend beyond the Maturity Date and provided
further, however, that during any such Extension Period, the
Debenture Issuer and its Affiliates shall not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a liquidation
payment with respect to, any of the Debenture Issuer’s or its Affiliates’
capital stock (other than payments of dividends or distributions to the
Debenture Issuer or payments of dividends from direct or indirect subsidiaries
of the Debenture Issuer to their parent corporations, which also shall be
direct or indirect subsidiaries of the Debenture Issuer) or make any guarantee
payments with respect to the foregoing, or (ii) make any payment of
principal of or interest or premium, if any, on or repay, repurchase or redeem
any debt securities of the Debenture Issuer or any Affiliate that rank pari passu in all respects with or junior in interest
to the Debentures (other than, with respect to clauses (i) and (ii) above,
(a) repurchases, redemptions or other acquisitions of shares of capital
stock of the Debenture Issuer 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, in connection with a dividend
reinvestment or stockholder stock purchase plan or in connection with the
issuance of capital stock of the Debenture Issuer (or securities convertible
into or exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as
a result of any exchange or conversion of any class or series of the Debenture
Issuer’s capital stock (or any capital stock of a subsidiary of the Debenture
Issuer) for any class or series of the Debenture Issuer’s capital stock or of
any class or series of the Debenture Issuer’s indebtedness for any class or
series of the Debenture Issuer’s capital stock, (c) the purchase of
fractional interests in shares of the Debenture Issuer’s capital stock pursuant
to the conversion or exchange provisions of such capital stock or the security
being converted or exchanged, (d) any declaration of a dividend in
connection with any stockholders’ rights plan, or the issuance of rights, stock
or other property under any stockholders’ rights plan, or the redemption or
repurchase of rights pursuant thereto, (e) 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 and any cash payments in lieu of fractional shares
issued in connection therewith, (f) payments of principal or interest on
debt securities or payments of cash dividends or distributions on any capital
stock issued by an Affiliate that is not, in whole or in part, a subsidiary of
the Debenture Issuer (or any redemptions, repurchases or liquidation payments
on such stock or securities), or (g) payments under the Capital Securities
Guarantee). Prior to the termination of any Extension Period, the Debenture
Issuer may further extend such period, provided that such period together with
all such previous and further consecutive extensions thereof shall not exceed
20 consecutive quarterly periods, or extend beyond the Maturity Date. Upon the
termination of any Extension Period and upon the payment of all accrued and
unpaid interest and Additional Interest, the Debenture Issuer may commence a
new Extension Period, subject to the foregoing requirements. No interest or
Additional Interest shall be due and payable during an Extension Period, except
at the end thereof, but each installment of interest that would otherwise have
been due and payable during such Extension Period shall bear Additional
Interest. During any Extension Period, Distributions on the Securities shall be



 


I-2

















 


deferred for a period
equal to the Extension Period. If Distributions are deferred, the Distributions
due shall be paid on the date that the related Extension Period terminates to
Holders of the Securities as they appear on the books and records of the Trust
on the record date immediately preceding such date. Distributions on the
Securities must be paid on the dates payable (after giving effect to any
Extension Period) to the extent that the Trust has funds available for the
payment of such distributions in the Property Account of the Trust. The Trust’s
funds available for Distribution to the Holders of the Securities will be
limited to payments received from the Debenture Issuer. The payment of
Distributions out of moneys held by the Trust is guaranteed by the Guarantor
pursuant to the Guarantee.


 


(c)                                  Distributions
on the Securities will be payable to the Holders thereof as they appear on the
books and records of the Trust on the relevant record dates. The relevant
record dates shall be fifteen days before the relevant Distribution Payment
Date. Distributions payable on any Securities that are not punctually paid on
any Distribution Payment Date, as a result of the Debenture Issuer having
failed to make a payment under the Debentures, as the case may be, when due
(taking into account any Extension Period), will cease to be payable to the
Person in whose name such Securities are registered on the relevant record
date, and such defaulted Distribution will instead be payable to the Person in
whose name such Securities are registered on the special record date or other
specified date determined in accordance with the Indenture.


 


(d)                                 In
the event that there is any money or other property held by or for the Trust
that is not accounted for hereunder, such property shall be distributed Pro
Rata (as defined herein) among the Holders of the Securities.


 


3.                                       Liquidation
Distribution Upon Dissolution. In the event of the voluntary or involuntary
liquidation, dissolution, winding-up or termination of the Trust (each a “Liquidation”)
other than in connection with a redemption of the Debentures, the Holders of
the Securities will be entitled to receive out of the assets of the Trust
available for distribution to Holders of the Securities, after satisfaction of
liabilities to creditors of the Trust (to the extent not satisfied by the
Debenture Issuer), distributions equal to the aggregate of the stated
liquidation amount of $1,000.00 per Security plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the “Liquidation
Distribution”), unless in connection with such Liquidation, the Debentures
in an aggregate stated principal amount equal to the aggregate stated
liquidation amount of such Securities, with an interest rate equal to the
Distribution Rate of, and bearing accrued and unpaid interest in an amount
equal to the accrued and unpaid Distributions on, and having the same record
date as, such Securities, after paying or making reasonable provision to pay
all claims and obligations of the Trust in accordance with the Statutory Trust
Act, shall be distributed on a Pro Rata basis to the Holders of the Securities
in exchange for such Securities.


 


The Sponsor, as the Holder of all of the Common
Securities, has the right at any time to dissolve the Trust (including, without
limitation, upon the occurrence of a Special Event), subject to the receipt by
the Debenture Issuer of prior approval from the Board of Governors of the
Federal Reserve System, or its designated district bank, as applicable, and any
successor federal agency that is primarily responsible for regulating the activities
of the Sponsor (the “Federal Reserve”), if the Sponsor is a bank holding
company, or from the Office of Thrift Supervision and any successor federal
agency that is primarily responsible for regulating the activities of Sponsor,
(the “OTS”) if the Sponsor is a savings and loan holding company, in
either case if then required under applicable capital guidelines or policies of
the Federal Reserve or OTS, as applicable, and, after satisfaction of
liabilities to creditors of the Trust, cause the Debentures to be distributed
to the Holders of the Securities on a Pro Rata basis in accordance with the
aggregate stated liquidation amount thereof.


 


If a Liquidation of the Trust occurs as described in
clause (i), (ii), (iii) or (v) in 0 of the Declaration, the Trust shall be
liquidated by the Institutional Trustee as expeditiously as it determines to 


 


I-3

















 


be possible by
distributing, after satisfaction of liabilities to creditors of the Trust, to
the Holders of the Securities, the Debentures on a Pro Rata basis to the extent
not satisfied by the Debenture Issuer, unless such distribution is determined
by the Institutional Trustee not to be practical, in which event such Holders
will be entitled to receive out of the assets of the Trust available for
distribution to the Holders, after satisfaction of liabilities of creditors of
the Trust to the extent not satisfied by the Debenture Issuer, an amount equal
to the Liquidation Distribution. An early Liquidation of the Trust pursuant to
clause (iv) of 0 of the Declaration shall occur if the Institutional
Trustee determines that such Liquidation is possible by distributing, after
satisfaction of liabilities to creditors of the Trust, to the Holders of the
Securities on a Pro Rata basis, the Debentures, and such distribution occurs.


 


If, upon any such Liquidation the Liquidation
Distribution can be paid only in part because the Trust has insufficient assets
available to pay in full the aggregate Liquidation Distribution, then the
amounts payable directly by the Trust on such Capital Securities shall be paid
to the Holders of the Trust Securities on a Pro Rata basis, except that if an
Event of Default has occurred and is continuing, the Capital Securities shall
have a preference over the Common Securities with regard to such distributions.


 


After the date for any distribution of the Debentures
upon dissolution of the Trust (i) the Securities of the Trust will be
deemed to be no longer outstanding, (ii) upon surrender of a Holder’s
Securities certificate, such Holder of the Securities will receive a
certificate representing the Debentures to be delivered upon such distribution,
(iii) any certificates representing the Securities still outstanding will
be deemed to represent undivided beneficial interests in such of the Debentures
as have an aggregate principal amount equal to the aggregate stated liquidation
amount with an interest rate identical to the Distribution Rate of, and bearing
accrued and unpaid interest equal to accrued and unpaid distributions on, the
Securities until such certificates are presented to the Debenture Issuer or its
agent for transfer or reissuance (and until such certificates are so
surrendered, no payments of interest or principal shall be made to Holders of
Securities in respect of any payments due and payable under the Debentures; provided,
however that such failure to pay shall not be deemed to be an Event of
Default and shall not entitle the Holder to the benefits of the Guarantee), and
(iv) all rights of Holders of Securities under the Declaration shall
cease, except the right of such Holders to receive Debentures upon surrender of
certificates representing such Securities.


 


4.                                       Redemption
and Distribution.


 


(a)                                  The
Debentures will mature on December 15, 2037. The Debentures may be
redeemed by the Debenture Issuer, in whole or in part, at any Distribution
Payment Date on or after the Distribution Payment Date in December 2012, at the
Redemption Price. In addition, the Debentures may be redeemed by the Debenture
Issuer at the Special Redemption Price, in whole but not in part, at any
Distribution Payment Date, upon the occurrence and continuation of a Special
Event within 120 days following the occurrence of such Special Event at
the Special Redemption Price, upon not less than 30 nor more than
60 days’ notice to holders of such Debentures so long as such Special
Event is continuing. In each case, the right of the Debenture Issuer to redeem
the Debentures is subject to the Debenture Issuer having received prior
approval from the Federal Reserve (if the Debenture Issuer is a bank holding
company) or prior approval from the OTS (if the Debenture Issuer is a savings
and loan holding company), in each case if then required under applicable
capital guidelines or policies of the applicable federal agency.


 


“3-Month LIBOR” means the London interbank
offered interest rate for three-month, U.S. dollar deposits determined by the
Debenture Trustee in the following order of priority:


 


(1)                                  the
rate (expressed as a percentage per annum) for U.S. dollar deposits having a
three-month maturity that appears on Reuters Page LIBOR01 as of 11:00 a.m.
(London time) on the related Determination Date (as defined below). “Reuters
Page LIBOR01” means the display 


 


I-4

















 


designated as “LIBOR01” on Reuters or such other page
as may replace Reuters Page LIBOR01 on that service or such other service or
services as may be nominated by the British Bankers’ Association as the
information vendor for the purpose of displaying London interbank offered rates
for U.S. dollar deposits;


 


(2)                                  if
such rate cannot be identified on the related Determination Date, the Debenture
Trustee will request the principal London offices of four leading banks in the
London interbank market to provide such banks’ offered quotations (expressed as
percentages per annum) to prime banks in the London interbank market for U.S.
dollar deposits having a three-month maturity as of 11:00 a.m. (London
time) on such Determination Date. If at least two quotations are provided,
3-Month LIBOR will be the arithmetic mean of such quotations;


 


(3)                                  if
fewer than two such quotations are provided as requested in clause (2)
above, the Debenture Trustee will request four major New York City banks to
provide such banks’ offered quotations (expressed as percentages per annum) to
leading European banks for loans in U.S. dollars as of 11:00 a.m. (London
time) on such Determination Date. If at least two such quotations are provided,
3-Month LIBOR will be the arithmetic mean of such quotations; and


 


(4)                                  if
fewer than two such quotations are provided as requested in clause (3)
above, 3-Month LIBOR will be a 3-Month LIBOR determined with respect to the
Distribution Period immediately preceding such current Distribution Period.


 


If the rate for U.S. dollar deposits having a
three-month maturity that initially appears on Reuters Page LIBOR01 as of
11:00 a.m. (London time) on the related Determination Date is superseded
on the Reuters Page LIBOR01 by a corrected rate by 12:00 noon (London
time) on such Determination Date, then the corrected rate as so substituted on
the applicable page will be the applicable 3-Month LIBOR for such Determination
Date.


 


The Distribution Rate for any Distribution Period will
at no time be higher than the maximum rate then permitted by New York law as
the same may be modified by United States law.


 


“Capital Treatment Event” means the receipt by
the Debenture Issuer and the Trust of an opinion of counsel experienced in such
matters to the effect that, as a result of the occurrence of any amendment to,
or change (including any announced prospective change) in, the laws, rules or
regulations of the United States or any political subdivision thereof or
therein, or as the result of any official or administrative pronouncement or
action or decision interpreting or applying such laws, rules or regulations,
which amendment or change is effective or which pronouncement, action or
decision is announced on or after the date of original issuance of the
Debentures, there is more than an insubstantial risk that the Sponsor will not,
within 90 days of the date of such opinion, be entitled to treat an amount
equal to the aggregate liquidation amount of the Capital Securities as “Tier 1
Capital” (or its then equivalent) for purposes of the capital adequacy
guidelines of the Federal Reserve, as then in effect and applicable to the
Sponsor (or if the Sponsor is not a bank holding company or otherwise is not
subject to the Federal Reserve’s risk-based capital adequacy guidelines, such
guidelines applied to the Sponsor as if the Sponsor were subject to such
guidelines); provided, however, that the inability of the Sponsor
to treat all or any portion of the liquidation amount of the Capital Securities
as Tier l Capital shall not constitute the basis for a Capital Treatment
Event, if such inability results from the Sponsor having cumulative preferred
stock, minority interests in consolidated subsidiaries, or any other class of
security or interest which the Federal Reserve or OTS, as applicable, may now
or hereafter accord Tier 1 Capital treatment in excess of the amount which
may now or hereafter qualify for treatment as Tier 1 Capital under
applicable capital adequacy guidelines; provided  further, however,
that the distribution of Debentures in connection with the Liquidation of the
Trust shall not in and of itself constitute a Capital Treatment Event unless
such Liquidation shall have occurred in connection with a Tax Event or an
Investment Company Event.


 


I-5

















 


“Determination Date” means the date that is two
London Banking Days (i.e., a business day in which dealings in deposits in U.S.
dollars are transacted in the London interbank market) preceding the particular
Distribution Period for which a Coupon Rate is being determined.


 


“Investment Company Event” means the receipt by
the Debenture Issuer and the Trust of an opinion of counsel experienced in such
matters to the effect that, as a result of the occurrence of a change in law or
regulation or written change (including any announced prospective change) in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority, there is more than an
insubstantial risk that the Trust is or, within 90 days of the date of such
opinion, will be considered an Investment Company that is required to be
registered under the Investment Company Act which change or prospective change
becomes effective or would become effective, as the case may be, on or after
the date of the issuance of the Debentures.


 


“Maturity Date” means December 15, 2037.


 


“Redemption Date” shall mean the date fixed for
the redemption of Capital Securities, which shall be any Distribution Payment
Date on or after the Distribution Payment Date in December 2012.


 


“Redemption Price”
means 100% of the principal amount of the Debentures being redeemed, plus
accrued and unpaid Interest on such Debentures to the Redemption Date.


 


“Special Event” means a Tax Event, an
Investment Company Event or a Capital Treatment Event.


 


“Special Redemption Date” means a date on which
a Special Event redemption occurs, which shall be a Distribution Payment Date.


 


“Special Redemption Price” means the price set
forth in the following table for any Special Redemption Date that occurs on the
date indicated below (or if such day is not a Business Day, then the next
succeeding Business Day), expressed as the percentage of the principal amount
of the Debentures being redeemed:


 




	
  Month in which Special 

  Redemption Date Occurs

  	
   

  	
  Special Redemption Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 2007

  	
   

  	
  104.625

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  March 2008

  	
   

  	
  104.300

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  June 2008

  	
   

  	
  104.000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  September 2008

  	
   

  	
  103.650

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  December 2008

  	
   

  	
  103.350

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  March 2009

  	
   

  	
  103.000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  June 2009

  	
   

  	
  102.700

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  September 2009

  	
   

  	
  102.350

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  December 2009

  	
   

  	
  102.050

  	
  %

  






 


I-6

















 




	
  March 2010

  	
   

  	
  101.700

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  June 2010

  	
   

  	
  101.400

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  September 2010

  	
   

  	
  101.050

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  December 2010

  	
   

  	
  100.750

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  March 2011

  	
   

  	
  100.450

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  June 2011

  	
   

  	
  100.200

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  September 2011 and thereafter

  	
   

  	
  100.000

  	
  %

  






 


plus, in each case, accrued and unpaid Interest on
such Debentures to the Special Redemption Date.


 


“Tax Event” means the receipt by the Debenture
Issuer and the Trust of an opinion of counsel experienced in such matters to
the effect that, as a result of any amendment to or change (including any
announced prospective change) in the laws or any regulations thereunder of the
United States or any political subdivision or taxing authority thereof or
therein, or as a result of any official administrative pronouncement (including
any private letter ruling, technical advice memorandum, field service advice,
regulatory procedure, notice or announcement including any notice or
announcement of intent to adopt such procedures or regulations) (an “Administrative
Action”) or judicial decision interpreting or applying such laws or
regulations, regardless of whether such Administrative Action or judicial
decision is issued to or in connection with a proceeding involving the
Debenture Issuer or the Trust and whether or not subject to review or appeal,
which amendment, clarification, change, Administrative Action or decision is
enacted, promulgated or announced, in each case on or after the date of
original issuance of the Debentures, there is more than an insubstantial risk
that: (i) the Trust is, or will be within 90 days of the date of such
opinion, subject to United States federal income tax with respect to income
received or accrued on the Debentures; (ii) interest payable by the
Debenture Issuer on the Debentures is not, or within 90 days of the date of
such opinion, will not be, deductible by the Debenture Issuer, in whole or in
part, for United States federal income tax purposes; or (iii) the Trust
is, or will be within 90 days of the date of such opinion, subject to more than
a de minimis amount of other taxes, duties or other governmental charges.


 


(b)                                 Upon
the repayment in full at maturity or redemption in whole or in part of the
Debentures (other than following the distribution of the Debentures to the
Holders of the Securities), the proceeds from such repayment or payment shall
concurrently be applied to redeem Pro Rata at the applicable Redemption Price
or Special Redemption Price, as applicable, Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Debentures so
repaid or redeemed; provided, however, that holders of such
Securities shall be given not less than 30 nor more than 60 days’ notice of
such redemption (other than at the scheduled maturity of the Debentures).


 


(c)                                  If
fewer than all the outstanding Securities are to be so redeemed, the Common
Securities and the Capital Securities will be redeemed Pro Rata and the Capital
Securities to be redeemed will be redeemed Pro Rata from each Holder of Capital
Securities.


 


I-7

















 


(d)                                 The
Trust may not redeem fewer than all the outstanding Capital Securities unless
all accrued and unpaid Distributions have been paid on all Capital Securities
for all quarterly Distribution periods terminating on or before the date of
redemption.


 


(e)                                  Redemption
or Distribution Procedures.


 


(i)                                     Notice
of any redemption of, or notice of distribution of the Debentures in exchange
for, the Securities (a “Redemption/Distribution Notice”) will be given
by the Trust by mail to each Holder of Securities to be redeemed or exchanged
not fewer than 30 nor more than 60 days before the date fixed for redemption or
exchange thereof which, in the case of a redemption, will be the date fixed for
redemption of the Debentures. For purposes of the calculation of the date of
redemption or exchange and the dates on which notices are given pursuant to
this paragraph 4(e)(i), a Redemption/Distribution Notice shall be deemed
to be given on the day such notice is first mailed by first-class mail, postage
prepaid, to Holders of such Securities. Each Redemption/Distribution Notice
shall be addressed to the Holders of such Securities at the address of each
such Holder appearing on the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing thereof with respect to any
Holder shall affect the validity of the redemption or exchange proceedings with
respect to any other Holder.


 


(ii)                                  If
the Securities are to be redeemed and the Trust gives a Redemption/
Distribution Notice, which notice may only be issued if the Debentures are
redeemed as set out in this paragraph 4 (which notice will be
irrevocable), then, provided that the Institutional Trustee has a
sufficient amount of cash in connection with the related redemption or maturity
of the Debentures, the Institutional Trustee will pay the relevant Redemption
Price or Special Redemption Price, as applicable, to the Holders of such
Securities by check mailed to the address of each such Holder appearing on the
books and records of the Trust on the Redemption Date. If a
Redemption/Distribution Notice shall have been given and funds deposited as
required then immediately prior to the close of business on the date of such
deposit Distributions will cease to accrue on the Securities so called for
redemption and all rights of Holders of such Securities so called for
redemption will cease, except the right of the Holders of such Securities to
receive the applicable Redemption Price or Special Redemption Price specified
in paragraph 4(a), but without interest on such Redemption Price or
Special Redemption Price. If payment of the Redemption Price or Special
Redemption Price in respect of any Securities is improperly withheld or refused
and not paid either by the Trust or by the Debenture Issuer as guarantor
pursuant to the Guarantee, Distributions on such Securities will continue to
accrue at the Distribution Rate from the original Redemption Date to the actual
date of payment, in which case the actual payment date will be considered the
date fixed for redemption for purposes of calculating the Redemption Price or
Special Redemption Price. In the event of any redemption of the Capital
Securities issued by the Trust in part, the Trust shall not be required to
(i) issue, register the transfer of or exchange any Security during a
period beginning at the opening of business fifteen days before any selection
for redemption of the Capital Securities and ending at the close of business on
the earliest date on which the relevant notice of redemption is deemed to have
been given to all Holders of the Capital Securities to be so redeemed or
(ii) register the transfer of or exchange any Capital Securities so
selected for redemption, in whole or in part, except for the unredeemed portion
of any Capital Securities being redeemed in part.


 


(iii)                               Redemption/Distribution
Notices shall be sent by the Administrators on behalf of the Trust to
(A) in respect of the Capital Securities, the Holders thereof and
(B) in respect of the Common Securities, the Holder thereof.


 


I-8

















 


(iv)                              Subject
to the foregoing and applicable law (including, without limitation, United
States federal securities laws), and provided that the acquiror is not the
Holder of the Common Securities or the obligor under the Indenture, the Sponsor
or any of its subsidiaries may at any time and from time to time purchase
outstanding Capital Securities by tender, in the open market or by private
agreement.


 


5.                                       Voting
Rights - Capital Securities.


 


(a)                                  Except
as provided under paragraphs 5(b) and 7 and as otherwise required by law
and the Declaration, the Holders of the Capital Securities will have no voting
rights. The Administrators are required to call a meeting of the Holders of the
Capital Securities if directed to do so by Holders of at least 10% in
liquidation amount of the Capital Securities.


 


(b)                                 Subject
to the requirements of obtaining a tax opinion by the Institutional Trustee in
certain circumstances set forth in the last sentence of this paragraph, the
Holders of a Majority in liquidation amount of the Capital Securities, voting
separately as a class, have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Institutional
Trustee, or exercising any trust or power conferred upon the Institutional
Trustee under the Declaration, including the right to direct the Institutional
Trustee, as holder of the Debentures, to (i) exercise the remedies
available under the Indenture as the holder of the Debentures, (ii) waive
any past default that is waivable under the Indenture, (iii) exercise any
right to rescind or annul a declaration that the principal of all the
Debentures shall be due and payable or (iv) consent on behalf of all the
Holders of the Capital Securities to any amendment, modification or termination
of the Indenture or the Debentures where such consent shall be required; provided,
however, that, where a consent or action under the Indenture would
require the consent or act of the holders of greater than a simple majority in
aggregate principal amount of Debentures (a “Super Majority”) affected
thereby, the Institutional Trustee may only give such consent or take such
action at the written direction of the Holders of at least the proportion in
liquidation amount of the Capital Securities outstanding which the relevant
Super Majority represents of the aggregate principal amount of the Debentures
outstanding. If the Institutional Trustee fails to enforce its rights under the
Debentures after the Holders of a Majority in liquidation amount of such
Capital Securities have so directed the Institutional Trustee, to the fullest
extent permitted by law, a Holder of the Capital Securities may institute a
legal proceeding directly against the Debenture Issuer to enforce the
Institutional Trustee’s rights under the Debentures without first instituting
any legal proceeding against the Institutional Trustee or any other person or
entity. Notwithstanding the foregoing, if an Event of Default has occurred and
is continuing and such event is attributable to the failure of the Debenture
Issuer to pay interest or principal on the Debentures on the date the interest
or principal is payable (or in the case of redemption, the Redemption Date or
the Special Redemption Date, as applicable), then a Holder of record of the
Capital Securities may directly institute a proceeding for enforcement of payment,
on or after the respective due dates specified in the Debentures, to such
Holder directly of the principal of or interest on the Debentures having an
aggregate principal amount equal to the aggregate liquidation amount of the
Capital Securities of such Holder. The Institutional Trustee shall notify all
Holders of the Capital Securities of any default actually known to the
Institutional Trustee with respect to the Debentures unless (x) such
default has been cured prior to the giving of such notice or (y) the
Institutional Trustee determines in good faith that the withholding of such
notice is in the interest of the Holders of such Capital Securities, except
where the default relates to the payment of principal of or interest on any of
the Debentures. Such notice shall state that such Indenture Event of Default
also constitutes an Event of Default hereunder. Except with respect to
directing the time, method and place of conducting a proceeding for a remedy,
the Institutional Trustee shall not take any of the actions described in
clauses (i), (ii) or (iii) above unless the Institutional Trustee has
obtained an opinion of tax counsel to the effect that, as a result of such
action, the Trust will not be classified as other than a grantor trust for
United States federal income tax purposes.


 


I-9

















 


In the event the consent of the Institutional Trustee,
as the holder of the Debentures, is required under the Indenture with respect
to any amendment, modification or termination of the Indenture, the
Institutional Trustee shall request the direction of the Holders of the
Securities with respect to such amendment, modification or termination and
shall vote with respect to such amendment, modification or termination as
directed by a Majority in liquidation amount of the Securities voting together
as a single class; provided, however, that where a consent under
the Indenture would require the consent of a Super-Majority, the Institutional
Trustee may only give such consent at the direction of the Holders of at least
the proportion in liquidation amount of the Securities outstanding which the
relevant Super-Majority represents of the aggregate principal amount of the
Debentures outstanding. The Institutional Trustee shall not take any such
action in accordance with the directions of the Holders of the Securities
unless the Institutional Trustee has obtained an opinion of tax counsel to the
effect that, as a result of such action, the Trust will not be classified as
other than a grantor trust for United States federal income tax purposes.


 


A waiver of an Indenture Event of Default will
constitute a waiver of the corresponding Event of Default hereunder. Any
required approval or direction of Holders of the Capital Securities may be given
at a separate meeting of Holders of the Capital Securities convened for such
purpose, at a meeting of all of the Holders of the Securities in the Trust or
pursuant to written consent. The Institutional Trustee will cause a notice of
any meeting at which Holders of the Capital Securities are entitled to vote, or
of any matter upon which action by written consent of such Holders is to be
taken, to be mailed to each Holder of record of the Capital Securities. Each
such notice will include a statement setting forth the following information
(i) the date of such meeting or the date by which such action is to be
taken, (ii) a description of any resolution proposed for adoption at such
meeting on which such Holders are entitled to vote or of such matter upon which
written consent is sought and (iii) instructions for the delivery of
proxies or consents. No vote or consent of the Holders of the Capital
Securities will be required for the Trust to redeem and cancel Capital
Securities or to distribute the Debentures in accordance with the Declaration
and the terms of the Securities.


 


Notwithstanding that Holders of the Capital Securities
are entitled to vote or consent under any of the circumstances described above,
any of the Capital Securities that are owned by the Sponsor or any Affiliate of
the Sponsor shall not entitle the Holder thereof to vote or consent and shall,
for purposes of such vote or consent, be treated as if such Capital Securities
were not outstanding.


 


In no event will Holders of the Capital Securities
have the right to vote to appoint, remove or replace the Administrators, which
voting rights are vested exclusively in the Sponsor as the Holder of all of the
Common Securities of the Trust. Under certain circumstances as more fully
described in the Declaration, Holders of Capital Securities have the right to
vote to appoint, remove or replace the Institutional Trustee and the Delaware
Trustee.


 


6.                                       Voting
Rights - Common Securities.


 


(a)                                  Except
as provided under paragraphs 6(b), 6(c) and 7 and as otherwise required by
law and the Declaration, the Common Securities will have no voting rights.


 


(b)                                 The
Holders of the Common Securities are entitled, in accordance with
Article IV of the Declaration, to vote to appoint, remove or replace any
Administrators.


 


(c)                                  Subject
to 0 of the Declaration and only after each Event of Default (if any) with
respect to the Capital Securities has been cured, waived, or otherwise
eliminated and subject to the requirements of the second to last sentence of
this paragraph, the Holders of a Majority in liquidation amount of the Common
Securities, voting separately as a class, may direct the time, method, and
place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the
time, 


 


I-10

















 


method, place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
exercising any trust or power conferred on the Debenture Trustee with respect
to the Debentures, (ii) waiving any past default and its consequences that
is waivable under the Indenture, or (iii) exercising any right to rescind
or annul a declaration that the principal of all the Debentures shall be due
and payable; provided, however, that, where a consent or action
under the Indenture would require a Super Majority, the Institutional Trustee
may only give such consent or take such action at the written direction of the
Holders of at least the proportion in liquidation amount of the Common
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding. Notwithstanding this
paragraph 6(c), the Institutional Trustee shall not revoke any action
previously authorized or approved by a vote or consent of the Holders of the
Capital Securities. Other than with respect to directing the time, method and
place of conducting any proceeding for any remedy available to the Institutional
Trustee or the Debenture Trustee as set forth above, the Institutional Trustee
shall not take any action described in (i), (ii) or (iii) above, unless
the Institutional Trustee has obtained an opinion of tax counsel to the effect
that for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action. If the
Institutional Trustee fails to enforce its rights, to the fullest extent
permitted by law, under the Declaration, any Holder of the Common Securities
may institute a legal proceeding directly against any Person to enforce the
Institutional Trustee’s rights under the Declaration, without first instituting
a legal proceeding against the Institutional Trustee or any other Person.


 


Any approval or direction of Holders of the Common
Securities may be given at a separate meeting of Holders of the Common
Securities convened for such purpose, at a meeting of all of the Holders of the
Securities in the Trust or pursuant to written consent. The Administrators will
cause a notice of any meeting at which Holders of the Common Securities are
entitled to vote, or of any matter upon which action by written consent of such
Holders is to be taken, to be mailed to each Holder of the Common Securities.
Each such notice will include a statement setting forth (i) the date of
such meeting or the date by which such action is to be taken, (ii) a
description of any resolution proposed for adoption at such meeting on which
such Holders are entitled to vote or of such matter upon which written consent
is sought and (iii) instructions for the delivery of proxies or consents.


 


No vote or consent of the Holders of the Common
Securities will be required for the Trust to redeem and cancel Common Securities
or to distribute the Debentures in accordance with the Declaration and the
terms of the Securities.


 


7.                                       Amendments
to Declaration and Indenture.


 


(a)                                  In
addition to any requirements under Section 11.1 of the Declaration, if any
proposed amendment to the Declaration provides for, or the Trustees, Sponsor or
Administrators otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
Liquidation of the Trust, other than as described in Section 7.1 of the
Declaration, then the Holders of outstanding Securities, voting together as a
single class, will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of the
Holders of at least a Majority in liquidation amount of the Securities,
affected thereby; provided, however, if any amendment or proposal
referred to in clause (i) above would adversely affect only the Capital
Securities or only the Common Securities, then only the affected class will be
entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of a Majority in liquidation
amount of such class of Securities.


 


(b)                                 In
the event the consent of the Institutional Trustee as the holder of the
Debentures is required under the Indenture with respect to any amendment,
modification or termination of 


 


I-11

















 


the Indenture or the
Debentures, the Institutional Trustee shall request the written direction of
the Holders of the Securities with respect to such amendment, modification or
termination and shall vote with respect to such amendment, modification, or
termination as directed by a Majority in liquidation amount of the Securities
voting together as a single class; provided, however, that where
a consent under the Indenture would require a Super Majority, the Institutional
Trustee may only give such consent at the direction of the Holders of at least
the proportion in liquidation amount of the Securities which the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding.


 


(c)                                  Notwithstanding
the foregoing, no amendment or modification may be made to the Declaration if
such amendment or modification would (i) cause the Trust to be classified
for purposes of United States federal income taxation as other than a grantor
trust, (ii) reduce or otherwise adversely affect the powers of the
Institutional Trustee or (iii) cause the Trust to be deemed an Investment
Company which is required to be registered under the Investment Company Act.


 


(d)                                 Notwithstanding
any provision of the Declaration, the right of any Holder of the Capital
Securities to receive payment of distributions and other payments upon
redemption or otherwise, on or after their respective due dates, or to
institute a suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder. For the protection and enforcement of the foregoing provision, each and
every Holder of the Capital Securities shall be entitled to such relief as can
be given either at law or equity.


 


8.                                       Pro
Rata. A reference in these terms of the Securities to any payment,
distribution or treatment as being “Pro Rata” shall mean pro rata to
each Holder of the Securities according to the aggregate liquidation amount of
the Securities held by the relevant Holder in relation to the aggregate
liquidation amount of all Securities then outstanding unless, in relation to a
payment, an Event of Default has occurred and is continuing, in which case any
funds available to make such payment shall be paid first to each Holder of the
Capital Securities Pro Rata according to the aggregate liquidation amount of
the Capital Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Capital Securities outstanding, and only after satisfaction
of all amounts owed to the Holders of the Capital Securities, to each Holder of
the Common Securities Pro Rata according to the aggregate liquidation amount of
the Common Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Common Securities outstanding.


 


9.                                       Ranking.
The Capital Securities rank pari passu with
and payment thereon shall be made Pro Rata with the Common Securities except
that, where an Event of Default has occurred and is continuing, the rights of Holders
of the Common Securities to receive payment of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights of the
Holders of the Capital Securities with the result that no payment of any
Distribution on, or Redemption Price (or Special Redemption Price) of, any
Common Security, and no other payment on account of redemption, liquidation or
other acquisition of Common Securities, shall be made unless payment in full in
cash of all accumulated and unpaid Distributions on all outstanding Capital
Securities for all distribution periods terminating on or prior thereto, or in
the case of payment of the Redemption Price (or Special Redemption Price) the
full amount of such Redemption Price (or Special Redemption Price) on all
outstanding Capital Securities then called for redemption, shall have been made
or provided for, and all funds immediately available to the Institutional
Trustee shall first be applied to the payment in full in cash of all
Distributions on, or the Redemption Price (or Special Redemption Price) of, the
Capital Securities then due and payable.


 


10.                                 Acceptance
of Guarantee and Indenture. Each Holder of the Capital Securities and the
Common Securities, by the acceptance of such Securities, agrees to the
provisions of the Guarantee, including the subordination provisions therein and
to the provisions of the Indenture.


 


I-12

















 


11.                                 No
Preemptive Rights. The Holders of the Securities shall have no preemptive
or similar rights to subscribe for any additional securities.


 


12.                                 Miscellaneous.
These terms constitute a part of the Declaration. The Sponsor will provide a
copy of the Declaration, the Guarantee, and the Indenture to a Holder without
charge on written request to the Sponsor at its principal place of business.


 


I-13

















 


EXHIBIT
A-1


 


FORM OF
CAPITAL SECURITY CERTIFICATE


 


[FORM OF FACE OF
SECURITY]


 


THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), ANY STATE SECURITIES
LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THIS SECURITY NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY ONLY (A) TO THE SPONSOR OR
THE TRUST, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A SO LONG AS THIS SECURITY IS ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A IN ACCORDANCE WITH RULE 144A,
(D) TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
RULE 903 OR RULE 904 (AS APPLICABLE) OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE
MEANING OF SUBPARAGRAPH (A) OF RULE 501 UNDER THE SECURITIES ACT THAT
IS ACQUIRING THIS CAPITAL SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF
SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH
A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE SPONSOR’S AND THE TRUST’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM IN ACCORDANCE WITH THE DECLARATION OF
TRUST, A COPY OF WHICH MAY BE OBTAINED FROM THE SPONSOR OR THE TRUST. HEDGING
TRANSACTIONS INVOLVING THIS SECURITY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE
WITH THE SECURITIES ACT.


 


THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT,
INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I
OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”),
OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”)
(EACH A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY
REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING “PLAN
ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THE SECURITIES OR ANY INTEREST THEREIN,
UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR EXEMPTIVE RELIEF AVAILABLE
UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23,
95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND
HOLDING OF THIS SECURITY IS NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION
4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER OR
HOLDER OF THE SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE
REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT AN
EMPLOYEE BENEFIT PLAN WITHIN THE 


 


A-1-1

















 


MEANING OF SECTION 3(3)
OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE
OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY
OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO
FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE WILL NOT RESULT IN A PROHIBITED TRANSACTION
UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO
APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.


 


THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED
ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000.00 (100
SECURITIES) AND MULTIPLES OF $1,000.00 IN EXCESS THEREOF. ANY ATTEMPTED
TRANSFER OF SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN
$100,000.00 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER.


 


THE HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY
WITH THE FOREGOING RESTRICTIONS.


 


IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL
DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS MAY BE REQUIRED BY THE DECLARATION TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.


 


Certificate Number P-1                                                                                                                                                                                                                                                                         25,000
Capital Securities


[CUSIP NO. [       ]  **To be inserted at the request of a
subsequent transferee]


 


November 1, 2007


 


Certificate Evidencing
Floating Rate Capital Securities


 


of


 


Yadkin Valley Statutory
Trust I


 


(liquidation amount
$1,000.00 per Capital Security)


 


Yadkin Valley Statutory Trust I, a statutory
trust created under the laws of the State of Delaware (the “Trust”), hereby
certifies that First Tennessee Bank National Association is the registered
owner of capital securities of the Trust representing undivided beneficial
interests in the assets of the Trust, (liquidation amount $1,000.00 per capital
security) (the “Capital Securities”). Subject to the Declaration (as defined
below), the Capital Securities are transferable on the books and records of the
Trust in person or by a duly authorized attorney, upon surrender of this
Certificate duly endorsed and in proper form for transfer. The Capital
Securities represented hereby are issued pursuant to, and the designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Capital Securities shall in all respects be subject to, the provisions of
the Amended and Restated Declaration of Trust of the Trust dated as of
November 1, 2007, among William A. Long, Edwin E. Laws and
Julie A. Mason, as Administrators, Wilmington Trust Company, as Delaware
Trustee, Wilmington Trust Company, as Institutional Trustee, Yadkin Valley
Financial Corporation, as Sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Trust, including the
designation of the terms of the Capital Securities as set forth in Annex I
to such amended and restated declaration as the same may be amended from time
to time (the “Declaration”). Capitalized terms used herein but not defined
shall have the meaning given them in the Declaration. The Holder is entitled to
the benefits of the Guarantee to the extent provided therein. The Sponsor will
provide a copy of the Declaration, the Guarantee, and the Indenture to the
Holder without charge upon written request to the Sponsor at its principal
place of business.


 


A-1-2

















 


Upon receipt of this Security, the Holder is bound by
the Declaration and is entitled to the benefits thereunder.


 


By acceptance of this Security, the Holder agrees to
treat, for United States federal income tax purposes, the Debentures as
indebtedness and the Capital Securities as evidence of beneficial ownership in
the Debentures.


 


This Capital Security is governed by, and construed in
accordance with, the laws of the State of Delaware, without regard to
principles of conflict of laws.


 


Signatures
appear on following page


 


A-1-3

















 


IN WITNESS WHEREOF, the Trust has duly executed this
certificate.


 


 


	
   

  	
  YADKIN VALLEY
  STATUTORY TRUST I

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:
  Administrator

  



 


CERTIFICATE OF
AUTHENTICATION


 


This is one of the Capital Securities referred to in
the within-mentioned Declaration.


 


 


	
   

  	
  WILMINGTON TRUST
  COMPANY,

  
	
   

  	
  as the
  Institutional Trustee

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized
  Officer

  



 


A-1-4

















 


[FORM OF REVERSE OF
CAPITAL SECURITY]


 


Distributions payable on each Capital Security will be
payable at an annual rate equal to 6.21375% beginning on (and including) the
date of original issuance and ending on (but excluding) the Distribution
Payment Date in December 2007 and at an annual rate for each successive period
beginning on (and including) the Distribution Payment Date in December 2007,
and each succeeding Distribution Payment Date, and ending on (but excluding)
the next succeeding Distribution Payment Date (each a “Distribution Period”),
equal to 3-Month LIBOR, determined as described below, plus 1.32% (the “Coupon
Rate”), applied to the stated liquidation amount of $1,000.00 per Capital
Security, such rate being the rate of interest payable on the Debentures to be
held by the Institutional Trustee. Distributions in arrears will bear interest
thereon compounded quarterly at the Distribution Rate (to the extent permitted
by applicable law). The term “Distributions” as used herein includes cash
distributions and any such compounded distributions unless otherwise noted. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee has funds available therefor. As used herein, “Determination
Date” means the date that is two London Banking Days (i.e., a business day in
which dealings in deposits in U.S. dollars are transacted in the London
interbank market) preceding the commencement of the relevant Distribution
Period. The amount of the Distribution payable for any Distribution Period will
be calculated by applying the Distribution Rate to the stated liquidation
amount outstanding at the commencement of the Distribution Period and
multiplying each such number by the actual number of days in the Distribution
Period concerned divided by 360.


 


“3-Month LIBOR” as used herein, means the London
interbank offered interest rate for three-month U.S. dollar deposits determined
by the Debenture Trustee in the following order of priority:  (i) the rate (expressed as a percentage per
annum) for U.S. dollar deposits having a three-month maturity that appears on
Reuters Page LIBOR01 as of 11:00 a.m. (London time) on the related
Determination Date (“Reuters Page LIBOR01” means the display designated as “LIBOR01”
on Reuters or such other page as may replace Reuters Page LIBOR01 on that
service or such other service or services as may be nominated by the British
Bankers’ Association as the information vendor for the purpose of displaying
London interbank offered rates for U.S. dollar deposits); (ii) if such rate
cannot be identified on the related Determination Date, the Debenture Trustee
will request the principal London offices of four leading banks in the London
interbank market to provide such banks’ offered quotations (expressed as
percentages per annum) to prime banks in the London interbank market for U.S.
dollar deposits having a three-month maturity as of 11:00 a.m. (London time) on
such Determination Date. If at least two quotations are provided, 3-Month LIBOR
will be the arithmetic mean of such quotations; (iii) if fewer than two such
quotations are provided as requested in clause (ii) above, the Debenture
Trustee will request four major New York City banks to provide such banks’
offered quotations (expressed as percentages per annum) to leading European
banks for loans in U.S. dollars as of 11:00 a.m. (London time) on such
Determination Date. If at least two such quotations are provided, 3-Month LIBOR
will be the arithmetic mean of such quotations; and (iv) if fewer than two such
quotations are provided as requested in clause (iii) above, 3-Month LIBOR will
be a 3-Month LIBOR determined with respect to the Distribution Period
immediately preceding such current Distribution Period. If the rate for U.S. dollar
deposits having a three-month maturity that initially appears on Reuters Page
LIBOR01 as of 11:00 a.m. (London time) on the related Determination Date is
superseded on the Reuters Page LIBOR01 by a corrected rate by 12:00 noon
(London time) on such Determination Date, then the corrected rate as so
substituted on the applicable page will be the applicable 3-Month LIBOR for
such Determination Date.


 


The Distribution Rate for any Distribution Period will
at no time be higher than the maximum rate then permitted by New York law as
the same may be modified by United States law.


 


All percentages resulting from any calculations on the
Capital Securities will be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point, with five one-millionths of a
percentage point rounded upward (e.g., 9.876545% (or 


 


A-1-5

















 


.09876545) being rounded
to 9.87655% (or .0987655), and all dollar amounts used in or resulting from
such calculation will be rounded to the nearest cent (with one-half cent being
rounded upward)).


 


Except as otherwise described below, Distributions on
the Capital Securities will be cumulative, will accrue from the date of
original issuance and will be payable quarterly in arrears on March 15,
June 15, September 15 and December 15 of each year or if any
such day is not a Business Day, then the next succeeding Business Day (each
such day, a “Distribution Payment Date”) (it being understood that interest
accrues for any such non-Business Day), commencing on the Distribution Payment
Date in December 2007. The Debenture Issuer has the right under the Indenture
to defer payments of interest on the Debentures, so long as no Acceleration
Event of Default has occurred and is continuing, by extending the interest
payment period on the Debentures for up to 20 consecutive quarterly periods
(each an “Extension Period”) at any time and from time to time on the
Debentures, subject to the conditions described below, during which Extension
Period no interest shall be due and payable. During any Extension Period,
interest will continue to accrue on the Debentures, and interest on such
accrued interest will accrue at an annual rate equal to the Distribution Rate
in effect for each such Extension Period, compounded quarterly from the date
such interest would have been payable were it not for the Extension Period, to
the extent permitted by law (such interest referred to herein as “Additional
Interest”). No Extension Period may end on a date other than a Distribution
Payment Date. At the end of any such Extension Period, the Debenture Issuer
shall pay all interest then accrued and unpaid on the Debentures (together with
Additional Interest thereon); provided, however, that no
Extension Period may extend beyond the Maturity Date. Prior to the termination
of any Extension Period, the Debenture Issuer may further extend such period,
provided that such period together with all such previous and further
consecutive extensions thereof shall not exceed 20 consecutive quarterly
periods, or extend beyond the Maturity Date. Upon the termination of any
Extension Period and upon the payment of all accrued and unpaid interest and
Additional Interest, the Debenture Issuer may commence a new Extension Period,
subject to the foregoing requirements. No interest or Additional Interest shall
be due and payable during an Extension Period, except at the end thereof, but
each installment of interest that would otherwise have been due and payable
during such Extension Period shall bear Additional Interest. During any
Extension Period, Distributions on the Capital Securities shall be deferred for
a period equal to the Extension Period. If Distributions are deferred, the
Distributions due shall be paid on the date that the related Extension Period
terminates, to Holders of the Securities as they appear on the books and
records of the Trust on the record date immediately preceding such date.
Distributions on the Securities must be paid on the dates payable (after giving
effect to any Extension Period) to the extent that the Trust has funds
available for the payment of such distributions in the Property Account of the
Trust. The Trust’s funds available for Distribution to the Holders of the
Securities will be limited to payments received from the Debenture Issuer. The
payment of Distributions out of moneys held by the Trust is guaranteed by the
Guarantor pursuant to the Guarantee.


 


The Capital Securities shall be redeemable as provided
in the Declaration.


 


A-1-6

















 


ASSIGNMENT


 


FOR VALUE RECEIVED, the undersigned assigns and
transfers this Capital Security Certificate to:


 


(Insert assignee’s social security or tax
identification number)


 


 


 


(Insert address and zip code of assignee) and
irrevocably appoints


 


 


 


agent to transfer this Capital Security Certificate on
the books of the Trust. The agent may substitute another to act for him or her.


 


	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature:

  	
   

  	
   

  
						



 


(Sign exactly as your
name appears on the other side of this Capital Security Certificate)


 


Signature Guarantee:(1)


 








(1) Signature must
be guaranteed by an “eligible guarantor institution” that is a bank,
stockbroker, savings and loan association or credit union meeting the
requirements of the Security registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program (“STAMP”)
or such other “signature guarantee program” as may be determined by the
Security registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.


 


A-1-7























 


EXHIBIT A-2


 


FORM OF COMMON SECURITY
CERTIFICATE


 


THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION.


 


THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT IN
COMPLIANCE WITH SECTION 8.1 OF THE DECLARATION.


 


Certificate Number C-1                                                                                                                                                                                                                                                                        774
Common Securities


 


November 1, 2007


 


Certificate Evidencing
Floating Rate Common Securities


 


of


 


Yadkin Valley Statutory
Trust I


 


Yadkin Valley Statutory Trust I, a statutory
trust created under the laws of the State of Delaware (the “Trust”), hereby
certifies that Yadkin Valley Financial Corporation (the “Holder”) is the
registered owner of common securities of the Trust representing undivided
beneficial interests in the assets of the Trust (the “Common Securities”). The
Common Securities represented hereby are issued pursuant to, and the
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities shall in all respects be subject to, the
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of November 1, 2007, among William A. Long, Edwin E. Laws and
Julie A. Mason, as Administrators, Wilmington Trust Company, as Delaware
Trustee, Wilmington Trust Company, as Institutional Trustee, Yadkin Valley
Financial Corporation, as Sponsor, and the holders from time to time of
undivided beneficial interest in the assets of the Trust including the
designation of the terms of the Common Securities as set forth in Annex I to
such amended and restated declaration, as the same may be amended from time to
time (the “Declaration”). Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Guarantee to the extent provided therein. The Sponsor will
provide a copy of the Declaration, the Guarantee and the Indenture to the
Holder without charge upon written request to the Sponsor at its principal
place of business.


 


As set forth in the Declaration, when an Event of
Default has occurred and is continuing, the rights of Holders of Common Securities
to payment in respect of Distributions and payments upon Liquidation,
redemption or otherwise are subordinated to the rights of payment of Holders of
the Capital Securities.


 


Upon receipt of this Certificate, the Holder is bound
by the Declaration and is entitled to the benefits thereunder.


 


By acceptance of this Certificate, the Holder agrees
to treat, for United States federal income tax purposes, the Debentures as
indebtedness and the Common Securities as evidence of undivided beneficial
ownership in the Debentures.


 


This Common Security is governed by, and construed in
accordance with, the laws of the State of Delaware, without regard to
principles of conflict of laws.


 


A-2-1

















 


IN WITNESS WHEREOF, the Trust has duly executed this
certificate.


 


	
   

  	
  YADKIN VALLEY
  STATUTORY TRUST I

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:
  Administrator

  



 


A-2-2

















 


[FORM OF REVERSE OF
COMMON SECURITY]


 


Distributions payable on each Common Security will be
payable at an annual rate equal to 6.21375% beginning on (and including) the
date of original issuance and ending on (but excluding) the Distribution
Payment Date in December 2007 and at an annual rate for each successive period
beginning on (and including) the Distribution Payment Date in December 2007,
and each succeeding Distribution Payment Date, and ending on (but excluding)
the next succeeding Distribution Payment Date (each a “Distribution Period”),
equal to 3-Month LIBOR, determined as described
below, plus 1.32% (the “Coupon Rate”), applied to the stated liquidation amount
of $1,000.00 per Common Security, such rate being the rate of interest payable
on the Debentures to be held by the Institutional Trustee. Distributions in arrears
will bear interest thereon compounded quarterly at the Distribution Rate (to
the extent permitted by applicable law). The term “Distributions” as used
herein includes cash distributions and any such compounded distributions unless
otherwise noted. A Distribution is payable only to the extent that payments are
made in respect of the Debentures held by the Institutional Trustee and to the
extent the Institutional Trustee has funds available therefor. As used herein, “Determination
Date” means the date that is two London Banking Days (i.e., a business day in
which dealings in deposits in U.S. dollars are transacted in the London
interbank market) preceding the commencement of the relevant Distribution
Period. The amount of the Distribution payable for any Distribution Period will
be calculated by applying the Distribution Rate to the stated liquidation
amount outstanding at the commencement of the Distribution Period and
multiplying each such number by the actual number of days in the Distribution
Period concerned divided by 360.


 


“3-Month LIBOR” as used herein, means the London
interbank offered interest rate for three-month U.S. dollar deposits determined
by the Debenture Trustee in the following order of priority:  (i) the rate (expressed as a percentage per
annum) for U.S. dollar deposits having a three-month maturity that appears on
Reuters Page LIBOR01 as of 11:00 a.m. (London time) on the related
Determination Date (“Reuters Page LIBOR01” means the display designated as “LIBOR01”
on Reuters or such other page as may replace Reuters Page LIBOR01 on that
service or such other service or services as may be nominated by the British
Bankers’ Association as the information vendor for the purpose of displaying
London interbank offered rates for U.S. dollar deposits); (ii) if such rate
cannot be identified on the related Determination Date, the Debenture Trustee
will request the principal London offices of four leading banks in the London
interbank market to provide such banks’ offered quotations (expressed as
percentages per annum) to prime banks in the London interbank market for U.S.
dollar deposits having a three-month maturity as of 11:00 a.m. (London time) on
such Determination Date. If at least two quotations are provided, 3-Month LIBOR
will be the arithmetic mean of such quotations; (iii) if fewer than two such
quotations are provided as requested in clause (ii) above, the Debenture
Trustee will request four major New York City banks to provide such banks’
offered quotations (expressed as percentages per annum) to leading European
banks for loans in U.S. dollars as of 11:00 a.m. (London time) on such
Determination Date. If at least two such quotations are provided, 3-Month LIBOR
will be the arithmetic mean of such quotations; and (iv) if fewer than two such
quotations are provided as requested in clause (iii) above, 3-Month LIBOR will
be a 3-Month LIBOR determined with respect to the Distribution Period
immediately preceding such current Distribution Period. If the rate for U.S.
dollar deposits having a three-month maturity that initially appears on Reuters
Page LIBOR01 as of 11:00 a.m. (London time) on the related Determination Date
is superseded on the Reuters Page LIBOR01 by a corrected rate by 12:00 noon
(London time) on such Determination Date, then the corrected rate as so
substituted on the applicable page will be the applicable 3-Month LIBOR for
such Determination Date.


 


The Distribution Rate for any Distribution Period will
at no time be higher than the maximum rate then permitted by New York law as
the same may be modified by United States law.


 


All percentages resulting from any calculations on the
Common Securities will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point rounded upward (e.g.,
9.876545% (or 


 


A-2-3

















 


.09876545) being rounded
to 9.87655% (or .0987655), and all dollar amounts used in or resulting from
such calculation will be rounded to the nearest cent (with one-half cent being rounded upward)).


 


Except as otherwise described below, Distributions on
the Common Securities will be cumulative, will accrue from the date of original
issuance and will be payable quarterly in arrears on March 15,
June 15, September 15 and December 15 of each year or if any
such day is not a Business Day, then the next succeeding Business Day (each
such day, a “Distribution Payment Date”) (it being understood that interest
accrues for any such non-Business Day), commencing on the Distribution Payment
Date in December 2007. The Debenture Issuer has the right under the Indenture
to defer payments of interest on the Debentures, so long as no Acceleration
Event of Default has occurred and is continuing, by extending the interest
payment period on the Debentures for up to 20 consecutive quarterly
periods (each an “Extension Period”) at any time and from time to time on the
Debentures, subject to the conditions described below, during which Extension
Period no interest shall be due and payable. During any Extension Period,
interest will continue to accrue on the Debentures, and interest on such
accrued interest will accrue at an annual rate equal to the Distribution Rate
in effect for each such Extension Period, compounded quarterly from the date
such interest would have been payable were it not for the Extension Period, to
the extent permitted by law (such interest referred to herein as “Additional
Interest”). No Extension Period may end on a date other than a Distribution
Payment Date. At the end of any such Extension Period, the Debenture Issuer
shall pay all interest then accrued and unpaid on the Debentures (together with
Additional Interest thereon); provided, however, that no
Extension Period may extend beyond the Maturity Date. Prior to the termination
of any Extension Period, the Debenture Issuer may further extend such period,
provided that such period together with all such previous and further
consecutive extensions thereof shall not exceed 20 consecutive quarterly
periods, or extend beyond the Maturity Date. Upon the termination of any
Extension Period and upon the payment of all accrued and unpaid interest and
Additional Interest, the Debenture Issuer may commence a new Extension Period,
subject to the foregoing requirements. No interest or Additional Interest shall
be due and payable during an Extension Period, except at the end thereof, but
each installment of interest that would otherwise have been due and payable
during such Extension Period shall bear Additional Interest. During any
Extension Period, Distributions on the Common Securities shall be deferred for
a period equal to the Extension Period. If Distributions are deferred, the
Distributions due shall be paid on the date that the related Extension Period
terminates, to Holders of the Securities as they appear on the books and
records of the Trust on the record date immediately preceding such date.
Distributions on the Securities must be paid on the dates payable (after giving
effect to any Extension Period) to the extent that the Trust has funds
available for the payment of such distributions in the Property Account of the
Trust. The Trust’s funds available for Distribution to the Holders of the
Securities will be limited to payments received from the Debenture Issuer.


 


The Common Securities shall be redeemable as provided
in the Declaration.


 


A-2-4

















 


ASSIGNMENT


 


FOR VALUE RECEIVED, the undersigned assigns and
transfers this Common Security Certificate to:


 


(Insert assignee’s social security or tax
identification number)


 


 


(Insert address and zip code of assignee) and
irrevocably appoints


 


 


	
   

  	
   

  	
  agent 

  
	
   

  	
  to transfer this Common
  Security Certificate on the books of the Trust. The

  agent may substitute another to act for him or her.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Sign exactly as your
  name appears on the other side of this Common Security 

  
	
   

  	
  Certificate)

  
	
   

  	
   

  
	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Sign exactly as your
  name appears on the other side of this Common Security 

  
	
   

  	
  Certificate)

  
									



 


Signature Guarantee(2)


 






(2) Signature must
be guaranteed by an “eligible guarantor institution” that is a bank,
stockbroker, savings and loan association or credit union, meeting the
requirements of the Security registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program (“STAMP”)
or such other “signature guarantee program” as may be determined by the
Security registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.


 


A-2-5

















 


EXHIBIT B


 


SPECIMEN OF INITIAL DEBENTURE


 


(See
Document No. 17)


 


B-1

















 


EXHIBIT C


 


PLACEMENT AGREEMENT


 


(See
Document No. 1)


 


C-1