Exhibit 4.1


 


TIDELANDS
BANCSHARES, INC.


 


as Issuer


 


 


INDENTURE


 


Dated as of June 20, 2008


 


 


WILMINGTON TRUST COMPANY


 


as Trustee


 


 


FIXED/FLOATING RATE JUNIOR SUBORDINATED DEBT
SECURITIES DUE 2038


 

















 


TABLE OF CONTENTS


 


	
  ARTICLE I DEFINITIONS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.01

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II DEBT SECURITIES

  	
  9

  
	
   

  	
   

  
	
  Section 2.01

  	
  Authentication and Dating

  	
  9

  
	
  Section 2.02

  	
  Form of Trustee’s Certificate of Authentication

  	
  10

  
	
  Section 2.03

  	
  Form and Denomination of Debt Securities

  	
  10

  
	
  Section 2.04

  	
  Execution of Debt Securities

  	
  10

  
	
  Section 2.05

  	
  Exchange and Registration of Transfer of Debt
  Securities

  	
  11

  
	
  Section 2.06

  	
  Mutilated, Destroyed, Lost or Stolen Debt Securities

  	
  14

  
	
  Section 2.07

  	
  Temporary Debt Securities

  	
  15

  
	
  Section 2.08

  	
  Payment of Interest

  	
  15

  
	
  Section 2.09

  	
  Cancellation of Debt Securities Paid, etc.

  	
  16

  
	
  Section 2.10

  	
  Computation of Interest

  	
  17

  
	
  Section 2.11

  	
  Extension of Interest Payment Period

  	
  18

  
	
  Section 2.12

  	
  CUSIP Numbers

  	
  19

  
	
  Section 2.13

  	
  Global Debentures

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE III PARTICULAR COVENANTS OF THE COMPANY

  	
  22

  
	
   

  	
   

  
	
  Section 3.01

  	
  Payment of Principal, Premium and Interest; Agreed
  Treatment of the Debt Securities

  	
  22

  
	
  Section 3.02

  	
  Offices for Notices and Payments, etc.

  	
  23

  
	
  Section 3.03

  	
  Appointments to Fill Vacancies in Trustee’s Office

  	
  23

  
	
  Section 3.04

  	
  Provision as to Paying Agent

  	
  23

  
	
  Section 3.05

  	
  Certificate to Trustee

  	
  24

  
	
  Section 3.06

  	
  Additional Amounts

  	
  25

  
	
  Section 3.07

  	
  Compliance with Consolidation Provisions

  	
  25

  
	
  Section 3.08

  	
  Limitation on Dividends

  	
  25

  
	
  Section 3.09

  	
  Covenants as to the Trust

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV LISTS

  	
   

  	
  26

  
	
   

  	
   

  	
   

  
	
  Section 4.01

  	
  Securityholders’ Lists

  	
  26

  
	
  Section 4.02

  	
  Preservation and Disclosure of Lists

  	
  27

  
	
  Section 4.03

  	
  Financial and Other Information

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE V REMEDIES OF THE TRUSTEE AND
  SECURITYHOLDERS

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 5.01

  	
  Events of Default

  	
  29

  
	
  Section 5.02

  	
  Payment of Debt Securities on Default; Suit Therefor

  	
  31

  
	
  Section 5.03

  	
  Application of Moneys Collected by Trustee

  	
  32

  
	
  Section 5.04

  	
  Proceedings by Securityholders

  	
  33

  



 


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  Section 5.05

  	
  Proceedings by Trustee

  	
  33

  
	
  Section 5.06

  	
  Remedies Cumulative and Continuing

  	
  33

  
	
  Section 5.07

  	
  Direction of Proceedings and Waiver of Defaults by
  Majority of Securityholders

  	
  34

  
	
  Section 5.08

  	
  Notice of Defaults

  	
  35

  
	
  Section 5.09

  	
  Undertaking to Pay Costs

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI CONCERNING THE TRUSTEE

  	
  35

  
	
   

  	
   

  
	
  Section 6.01

  	
  Duties and Responsibilities of Trustee

  	
  35

  
	
  Section 6.02

  	
  Reliance on
  Documents, Opinions, etc.

  	
  37

  
	
  Section 6.03

  	
  No Responsibility for Recitals, etc.

  	
  38

  
	
  Section 6.04

  	
  Trustee, Authenticating Agent, Paying Agents, Transfer
  Agents or Registrar May Own Debt Securities

  	
  38

  
	
  Section 6.05

  	
  Moneys to be Held in Trust

  	
  38

  
	
  Section 6.06

  	
  Compensation and Expenses of Trustee

  	
  38

  
	
  Section 6.07

  	
  Officers’ Certificate as Evidence

  	
  39

  
	
  Section 6.08

  	
  Eligibility of Trustee

  	
  39

  
	
  Section 6.09

  	
  Resignation or Removal of Trustee

  	
  40

  
	
  Section 6.10

  	
  Acceptance by Successor Trustee

  	
  41

  
	
  Section 6.11

  	
  Succession by Merger, etc.

  	
  42

  
	
  Section 6.12

  	
  Authenticating Agents

  	
  42

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII CONCERNING THE SECURITYHOLDERS

  	
  43

  
	
   

  	
   

  
	
  Section 7.01

  	
  Action by Securityholders

  	
  43

  
	
  Section 7.02

  	
  Proof of Execution by Securityholders

  	
  44

  
	
  Section 7.03

  	
  Who Are Deemed Absolute Owners

  	
  44

  
	
  Section 7.04

  	
  Debt Securities Owned by Company Deemed Not
  Outstanding

  	
  45

  
	
  Section 7.05

  	
  Revocation of Consents; Future Holders Bound

  	
  45

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII SECURITYHOLDERS’ MEETINGS

  	
  46

  
	
   

  	
   

  
	
  Section 8.01

  	
  Purposes of Meetings

  	
  46

  
	
  Section 8.02

  	
  Call of Meetings by Trustee

  	
  46

  
	
  Section 8.03

  	
  Call of Meetings by Company or Securityholders

  	
  46

  
	
  Section 8.04

  	
  Qualifications for Voting

  	
  47

  
	
  Section 8.05

  	
  Regulations

  	
  47

  
	
  Section 8.06

  	
  Voting

  	
  47

  
	
  Section 8.07

  	
  Quorum; Actions

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX SUPPLEMENTAL INDENTURES

  	
  49

  
	
   

  	
   

  	
   

  
	
  Section 9.01

  	
  Supplemental Indentures without Consent of
  Securityholders

  	
  49

  
	
  Section 9.02

  	
  Supplemental Indentures with Consent of
  Securityholders

  	
  50

  
	
  Section 9.03

  	
  Effect of Supplemental Indentures

  	
  51

  



 


ii

















 


	
  Section 9.04

  	
  Notation on Debt Securities

  	
  51

  
	
  Section 9.05

  	
  Evidence of Compliance of Supplemental Indenture to
  be Furnished to Trustee

  	
  52

  
	
   

  	
   

  	
   

  
	
  ARTICLE X REDEMPTION OF SECURITIES

  	
  52

  
	
   

  	
   

  
	
  Section 10.01

  	
  Optional Redemption

  	
  52

  
	
  Section 10.02

  	
  Special Event Redemption

  	
  52

  
	
  Section 10.03

  	
  Notice of Redemption; Selection of Debt Securities

  	
  52

  
	
  Section 10.04

  	
  Payment of Debt Securities Called for Redemption

  	
  53

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI CONSOLIDATION, MERGER, SALE, CONVEYANCE
  AND LEASE

  	
  54

  
	
   

  	
   

  
	
  Section 11.01

  	
  Company May Consolidate, etc., on Certain Terms

  	
  54

  
	
  Section 11.02

  	
  Successor Entity to be Substituted

  	
  54

  
	
  Section 11.03

  	
  Opinion of Counsel to be Given to Trustee

  	
  55

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII SATISFACTION AND DISCHARGE OF INDENTURE

  	
  55

  
	
   

  	
   

  
	
  Section 12.01

  	
  Discharge of Indenture

  	
  55

  
	
  Section 12.02

  	
  Deposited Moneys to be Held in Trust by Trustee

  	
  56

  
	
  Section 12.03

  	
  Paying Agent to Repay Moneys Held

  	
  56

  
	
  Section 12.04

  	
  Return of Unclaimed Moneys

  	
  56

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII IMMUNITY OF INCORPORATORS,
  STOCKHOLDERS, OFFICERS AND DIRECTORS

  	
  57

  
	
   

  	
   

  	
   

  
	
  Section 13.01

  	
  Indenture and Debt Securities Solely Corporate
  Obligations

  	
  57

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIV MISCELLANEOUS PROVISIONS

  	
  57

  
	
   

  	
   

  
	
  Section 14.01

  	
  Successors

  	
  57

  
	
  Section 14.02

  	
  Official Acts by Successor Entity

  	
  57

  
	
  Section 14.03

  	
  Surrender of Company Powers

  	
  57

  
	
  Section 14.04

  	
  Addresses for Notices, etc.

  	
  57

  
	
  Section 14.05

  	
  Governing Law

  	
  58

  
	
  Section 14.06

  	
  Evidence of Compliance with Conditions Precedent

  	
  58

  
	
  Section 14.07

  	
  Business Day Convention

  	
  58

  
	
  Section 14.08

  	
  Table of Contents, Headings, etc.

  	
  59

  
	
  Section 14.09

  	
  Execution in Counterparts

  	
  59

  
	
  Section 14.10

  	
  Separability

  	
  59

  
	
  Section 14.11

  	
  Assignment

  	
  59

  
	
  Section 14.12

  	
  Acknowledgment of Rights

  	
  59

  
	
   

  	
   

  	
   

  
	
  ARTICLE XV SUBORDINATION OF DEBT SECURITIES

  	
  60

  
	
   

  	
   

  
	
  Section 15.01

  	
  Agreement to Subordinate

  	
  60

  



 


iii

















 


	
  Section 15.02

  	
  Default on Senior Indebtedness

  	
  60

  
	
  Section 15.03

  	
  Liquidation;
  Dissolution; Bankruptcy

  	
  60

  
	
  Section 15.04

  	
  Subrogation

  	
  62

  
	
  Section 15.05

  	
  Trustee to Effectuate Subordination

  	
  63

  
	
  Section 15.06

  	
  Notice by the Company

  	
  63

  
	
  Section 15.07

  	
  Rights of the Trustee; Holders of Senior
  Indebtedness

  	
  63

  
	
  Section 15.08

  	
  Subordination May Not Be Impaired

  	
  64

  



 


	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  A

  	
   

  	
  Form of Debt
  Security

  
	
  EXHIBIT
  B

  	
   

  	
  Form of
  Certificate of Officer of the Company

  
	
  EXHIBIT
  C

  	
   

  	
  Form of Officer’s
  Financial Certificate

  



 


iv
















 


THIS INDENTURE, dated as of June 20, 2008, between Tidelands
Bancshares, Inc., a bank holding company incorporated in South Carolina (hereinafter sometimes called
the “Company”), and Wilmington Trust Company, a Delaware banking corporation,
as trustee (hereinafter sometimes called the “Trustee”).


 


W I T N E S S E T H :


 


WHEREAS, for its lawful corporate purposes, the
Company has duly authorized the issuance of its Fixed/Floating Rate Junior
Subordinated Debt Securities due 2038 (the “Debt Securities”) under this
Indenture and to provide, among other things, for the execution and
authentication, delivery and administration thereof, the Company has duly
authorized the execution of this Indenture.


 


NOW, THEREFORE, in consideration of the premises, and
the purchase of the Debt Securities by the holders thereof, the Company
covenants and agrees with the Trustee for the equal and proportionate benefit
of the respective holders from time to time of the Debt Securities as follows:


 


ARTICLE I

DEFINITIONS


 


Section 1.01           Definitions.


 


The terms defined in this Section 1.01 (except as
herein otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section 1.01. All
accounting terms used herein and not expressly defined shall have the meanings
assigned to such terms in accordance with generally accepted accounting
principles and the term “generally accepted accounting principles” means such
accounting principles as are generally accepted in the United States at the
time of any computation.  The words
“herein,” “hereof” and “hereunder” and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision.


 


“Additional Amounts”
has the meaning set forth in Section 3.06.


 


“Additional Provisions” has the meaning set forth in Section 15.01.


 


“Administrative Action” has the meaning specified
within the definition of “Tax Event” in this Section 1.01.


 


“Applicable Depositary Procedures” means, with respect
to any transfer or transaction involving a Book-Entry Capital Security or a
Debt Security represented by a Global Debenture, the rules and procedures
of the Depositary for such Book-Entry Capital Security or Debt Security
represented by a Global Debenture, in each case to the extent applicable to
such transaction and as in effect from time to time.


 


“Authenticating Agent” means any agent or agents of
the Trustee which at the time shall be appointed and acting pursuant to Section 6.12.


 

















 


“Bankruptcy Law” means Title 11, U.S. Code, or any
similar federal or state law for the relief of debtors.


 


“Board of Directors” means the board of directors or
the executive committee or any other duly authorized designated officers of the
Company.


 


“Board Resolution” means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the Company to have
been duly adopted by the Board of Directors and to be in full force and effect
on the date of such certification and delivered to the Trustee.


 


“Book-Entry Capital Security” means a Capital Security
the ownership and transfers of which shall be reflected and made, as
applicable, through book entries by the Depositary.


 


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


 


“Calculation Agent” means the Person identified as
“Trustee” in the first paragraph hereof with respect to the Debt Securities and
the Institutional Trustee with respect to the Trust Securities.


 


“Capital Securities” means undivided beneficial
interests in the assets of the Trust which are designated as “MMCapSSM”
and rank pari passu with Common Securities issued
by the Trust; provided, however, that if an Event of Default (as
defined in the Declaration) has occurred and is continuing, the rights of
holders of such Common Securities to payment in respect of distributions and
payments upon liquidation, redemption and otherwise are subordinated to the
rights of holders of such Capital Securities.


 


“Capital Securities Guarantee” means the guarantee
agreement that the Company will enter into with Wilmington Trust Company or
other Persons that operates directly or indirectly for the benefit of holders
of Capital Securities of the Trust.


 


“Capital Treatment Event” means, if the Company is
organized and existing under the laws of the United States or any state thereof
or the District of Columbia, the receipt by the Company 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 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 Debt Securities, there is more
than an insubstantial risk that the Company will not, within 90 days of the
date of such opinion, be entitled to treat Capital Securities as “Tier 1
Capital” (or the then equivalent thereof) for purposes of the capital adequacy
guidelines of the Federal Reserve (or any successor regulatory authority with
jurisdiction over bank holding companies), as then in effect and applicable to
the Company; provided, however, that the inability of the
Company to treat all or any portion of the aggregate Liquidation Amount of the
Capital Securities as “Tier 1 Capital” shall not constitute the basis for a
Capital Treatment Event if such inability results from the Company having 


 


2

















 


preferred stock, minority interests in
consolidated subsidiaries and any other class of security or interest which the
Federal Reserve (or any successor regulatory authority with jurisdiction over
bank holding companies) may now or hereafter accord “Tier 1 Capital” treatment
that, in the aggregate, exceed the amount which may now or hereafter qualify
for treatment as “Tier 1 Capital” under applicable capital adequacy guidelines
of the Federal Reserve (or any successor regulatory authority with jurisdiction
over bank holding companies); provided, further, however,
that the distribution of the Debt Securities in connection with the liquidation
of the Trust by the Company 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. 
For the avoidance of doubt, the inability of the Company to treat all or
any portion of the aggregate Liquidation Amount of the Capital Securities as
“Tier 1 Capital” as a result of the changes effected by the final rule adopted
by the Federal Reserve on March 1, 2005 shall not constitute the basis for
a Capital Treatment Event.


 


“Certificate” means a certificate signed by any one of
the principal executive officer, the principal financial officer or the
principal accounting officer of the Company.


 


“Code” means the Internal Revenue Code of 1986, as
amended.


 


“Common Securities” means undivided beneficial
interests in the assets of the Trust which are designated as “Common
Securities” and rank pari passu with
Capital Securities issued by the Trust; provided, however, that
if an Event of Default (as defined in the Declaration) has occurred and is
continuing, the rights of holders of such Common Securities to payment in
respect of distributions and payments upon liquidation, redemption and
otherwise are subordinated to the rights of holders of such Capital Securities.


 


“Company” means Tidelands
Bancshares, Inc., a bank holding company incorporated in South Carolina, and, subject to the provisions
of Article XI, shall include its successors and assigns.


 


“Debt Security” or “Debt Securities” has the meaning
stated in the first recital of this Indenture.


 


“Debt Security Register” has the meaning specified in Section 2.05.


 


“Declaration” means the Amended and Restated
Declaration of Trust of the Trust, dated as of June 20,
2008, as amended or supplemented from time to time.


 


“Default” means any event, act or condition that with
notice or lapse of time, or both, would constitute an Event of Default.


 


“Defaulted Interest” has the meaning set forth in Section 2.08.


 


“Deferred Interest” has the meaning set forth in Section 2.11.


 


“Depositary” means an organization registered as a
clearing agency under the Exchange Act that is designated as Depositary by the
Company.  DTC will be the initial
Depositary (if one is designated by the Company).


 


3

















 


“Depositary Participant” means a broker, dealer, bank,
other financial institution or other Person for whom from time to time the
Depositary effects book-entry transfers and pledges of securities deposited
with or on behalf of the Depositary.


 


“DTC” means The Depository Trust Company, a New York
corporation.


 


“Event of Default” means any event specified in Section 5.01,
which has continued for the period of time, if any, and after the giving of the
notice, if any, therein designated.


 


“Exchange Act” means the Securities Exchange Act of
1934, as amended.


 


“Extension Period” has the meaning set forth in Section 2.11.


 


“Federal Reserve” means the Board of Governors of the
Federal Reserve System.


 


“Global Debenture” means a global certificate that
evidences all or part of the Debt Securities the ownership and transfers of
which shall be reflected and made, as applicable, through book entries by the
Depositary and the Depositary Participants.


 


“Indenture” means this Indenture as originally
executed or, if amended or supplemented as herein provided, as so amended or
supplemented, or both.


 


“Institutional Trustee” has the meaning set forth in
the Declaration.


 


“Interest Payment Date” means March 30, June 30, September 30 and December 30 of
each year, commencing on September 30, 2008, subject to Section 14.07.


 


“Interest Period” has the meaning set forth in Section 2.08.


 


“Interest Rate” means, a per annum rate of interest
equal to (1) with respect to any Interest Period (as defined herein) prior
to the Interest Period commencing on the Interest Payment Date in June 2013,
9.425%, and (2) with respect to any Interest Period commencing on or after
the Interest Payment Date in June 2013, LIBOR, as determined on the LIBOR
Determination Date for such Interest Period, plus 5.075%%; provided, however, that the Interest Rate
for any Interest Period commencing on or after the Interest Payment Date in June 2013
may not exceed the highest rate permitted by New York law, as the same may be
modified by United States law of general application.


 


“Investment Company Event” means the receipt by the
Company and the Trust of an Opinion of Counsel experienced in such matters to
the effect that, as a result of a change in law or regulation or written 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 of 1940, as amended, which change becomes
effective on or after the date of the original issuance of the Debt Securities.


 


4

















 


“LIBOR” means the London Interbank Offered Rate for
three-month U.S. Dollar deposits in Europe as determined by the Calculation
Agent according to Section 2.10(b).


 


“LIBOR Banking Day” has the meaning set forth in Section 2.10(b)(i).


 


“LIBOR Business Day” has the meaning set forth in Section 2.10(b)(i).


 


“LIBOR Determination Date” has the meaning set forth
in Section 2.10(b)(i).


 


“Liquidation Amount” means the liquidation amount of
$1,000 per Trust Security.


 


“Major Depository Institution Subsidiary” means any
subsidiary of the Company that (i) is a depository institution and (ii) meets
the definition of “significant subsidiary” within the meaning of Rule 405
under the Securities Act.


 


“Maturity Date” means June 30,
2038, subject to Section 14.07.


 


“Officers’ Certificate” means a certificate signed by
the Chairman of the Board, the Chief Executive Officer, the President or any
Vice President, and by the Chief Financial Officer, the Treasurer, an Assistant
Treasurer, the Comptroller, an Assistant Comptroller, the Secretary or an
Assistant Secretary of the Company, and delivered to the Trustee.  Each such certificate shall include the
statements provided for in Section 14.06 if and to the extent required by
the provisions of such Section.


 


“Opinion of Counsel” means an opinion in writing
signed by legal counsel, who may be counsel to the Company or may be other
counsel reasonably satisfactory to the Trustee. 
Each such opinion shall include the statements provided for in Section 14.06
if and to the extent required by the provisions of such Section.


 


The term “outstanding,” when used with reference to
Debt Securities, subject to the provisions of Section 7.04, means, as of
any particular time, all Debt Securities authenticated and delivered by the
Trustee or the Authenticating Agent under this Indenture, except


 


(a)           Debt Securities theretofore canceled
by the Trustee or the Authenticating Agent or delivered to the Trustee for
cancellation;


 


(b)           Debt Securities, or portions thereof,
for the payment or redemption of which moneys in the necessary amount shall
have been deposited in trust with the Trustee or with any Paying Agent (other
than the Company) or shall have been set aside and segregated in trust by the
Company (if the Company shall act as its own Paying Agent); provided,
that, if such Debt Securities, or portions thereof, are to be redeemed prior to
maturity thereof, notice of such redemption shall have been given as provided
in Articles X and XIV or provision satisfactory to the Trustee shall have been
made for giving such notice; and


 


(c)           Debt Securities paid pursuant to Section 2.06
or in lieu of or in substitution for which other Debt Securities shall have
been authenticated and delivered pursuant to the terms of Section 2.06
unless proof satisfactory to the Company and the Trustee is presented that any
such Debt Securities are held by bona fide holders in due course.


 


5

















 


“Optional Redemption Date” has the meaning set forth
in Section 10.01.


 


“Optional Redemption Price” means an amount in cash
equal to 100% of the principal amount of the Debt Securities being redeemed
plus unpaid interest accrued on such Debt Securities to the related Optional
Redemption Date.


 


“Paying Agent” has the meaning set forth in Section 3.04(e).


 


“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.


 


“Predecessor Security” of any particular Debt Security
means every previous Debt Security evidencing all or a portion of the same debt
as that evidenced by such particular Debt Security; and, for the purposes of
this definition, any Debt Security authenticated and delivered under Section 2.06
in lieu of a lost, destroyed or stolen Debt Security shall be deemed to
evidence the same debt as the lost, destroyed or stolen Debt Security.


 


“Principal Office of the Trustee” means the office of the
Trustee at which at any particular time its corporate trust business shall be
principally administered, which at all times shall be located within the United
States and at the time of the execution of this Indenture shall be Rodney
Square North, 1100 North Market Street, Wilmington, DE 19890-0001.


 


“Reference Banks” has the meaning set forth in Section 2.10(b)(ii).


 


“Resale Restriction Termination Date” means, with
respect to any Debt Security, the date which is the later of (i) one year
(or such shorter period of time as permitted by Rule 144(b)(1) under
the Securities Act) after the later of (y) the date of original issuance
of such Debt Security and (z) the last date on which the Company or any
Affiliate (as defined in Rule 405 under the Securities Act) of the Company
was the holder of such Debt Security (or any predecessor thereto) and (ii) such
later date, if any, as may be required by any subsequent change in applicable
law.


 


“Responsible Officer” means, with respect to the
Trustee, any officer within the Principal Office of the Trustee with direct
responsibility for the administration of the Indenture, including any
vice-president, any assistant vice-president, any secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or other
officer of the Principal Office of the 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.


 


“Securities Act” means the Securities Act of 1933, as
amended.


 


“Securityholder,” “holder of Debt Securities” or other
similar terms, means any Person in whose name at the time a particular Debt
Security is registered on the Debt Security Register.


 


6

















 


“Senior Indebtedness” means, with respect to the
Company, (i) the principal, premium, if any, and interest in respect of (A) indebtedness
of the Company for money borrowed, as well as similar obligations arising from
off-balance sheet guarantees and direct credit substitutes and (B) indebtedness
evidenced by securities, debentures, notes, bonds or other similar instruments
issued by the Company, (ii) all capital lease obligations of the Company, (iii) all
obligations of the Company issued or assumed as the deferred purchase price of
property, all conditional sale obligations of the Company and all obligations
of the Company under any title retention agreement (but excluding trade
accounts payable and other accrued liabilities arising in the ordinary course
of business), (iv) all obligations of the Company for the reimbursement of
any letter of credit, any banker’s acceptance, any security purchase facility,
any repurchase agreement or similar arrangement, all obligations associated
with derivative products such as interest rate and foreign exchange contracts
and commodity contracts, any interest rate swap, any other hedging arrangement,
any obligation under options or any similar credit or other transaction, (v) all
obligations of the type referred to in clauses (i) through (iv) above
of other Persons for the payment of which the Company is responsible or liable
as obligor, guarantor or otherwise and (vi) all obligations of the type
referred to in clauses (i) through (v) above of other Persons secured
by any lien on any property or asset of the Company (whether or not such
obligation is assumed by the Company), whether the obligations of the type
referred to in clauses (i) through (vi) above were incurred on or
prior to the date of this Indenture or thereafter incurred, unless, with the
prior approval of the Federal Reserve if not otherwise generally approved, it
is provided in the instrument creating or evidencing the same or pursuant to
which the same is outstanding that such obligations are not superior or are pari passu in right of payment to the Debt Securities; provided,
however, that Senior Indebtedness shall not include (A) any debt
securities issued to any trust other than the Trust (or a trustee of such
trust) that is a financing vehicle of the Company (a “financing entity”) in
connection with the issuance by such financing entity of equity or other securities
in transactions substantially similar in structure to the transactions
contemplated hereunder including the trust preferred securities issued by
Tidelands Statutory Trust I in February 2006 and in the Declaration or (B) any
guarantees of the Company in respect of the equity or other securities of any
financing entity referred to in clause (A) above.


 


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


 


“Special Redemption Date” has the meaning set forth in
Section 10.02.


 


“Special Redemption Price” means, with respect to the
redemption of any Debt Security following a Special Event, an amount in cash
equal to the percentage of the principal amount of the Debt Securities that is
specified below for the Special Redemption Date plus, in each case, unpaid
interest accrued thereon to the Special Redemption Date:


 


7

















 


	
  Special Redemption During the 12-Month 

  Period Beginning June 30,

  	
   

  	
  Percentage of Principal Amount

  	
   

  
	
  2008

  	
   

  	
  104.125

  	
  %

  
	
  2009

  	
   

  	
  103.30

  	
  %

  
	
  2010

  	
   

  	
  102.48

  	
  %

  
	
  2011

  	
   

  	
  101.65

  	
  %

  
	
  2012

  	
   

  	
  100.83

  	
  %

  
	
  2013

  	
   

  	
  100

  	
  %

  



 


“Subsidiary” means, with respect to any Person, (i) any
corporation, at least a majority of the outstanding voting stock of which is
owned, directly or indirectly, by such Person or one or more of its
Subsidiaries or by such Person and one or more of its Subsidiaries, (ii) any
general partnership, joint venture or similar entity, at least a majority of
the outstanding partnership or similar interests of which shall at the time be
owned by such Person or one or more of its Subsidiaries or by such Person and
one or more of its Subsidiaries, and (iii) any limited partnership of
which such Person or any of its Subsidiaries is a general partner.  For the purposes of this definition, “voting
stock” means shares, interests, participations or other equivalents in the
equity interest (however designated) in such Person having ordinary voting
power for the election of a majority of the directors (or the equivalent) of such
Person, other than shares, interests, participations or other equivalents
having such power only by reason of the occurrence of a contingency.


 


“Tax Event” means the receipt by the Company 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, regulatory procedure, notice or announcement (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
Company 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 Debt Securities, 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 Debt Securities; (ii) if the Company is organized and
existing under the laws of the United States or any state thereof or the
District of Columbia, interest payable by the Company on the Debt Securities is
not, or within 90 days of the date of such opinion, will not be, deductible by
the Company, 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 or otherwise required to pay, or required to withhold
from distributions to holders of Trust Securities, more than a de minimis
amount of other taxes (including withholding taxes), duties, assessments or
other governmental charges.


 


8

















 


“Trust” means Tidelands
Statutory Trust II, the Delaware statutory trust, or any other similar
trust created for the purpose of issuing Capital Securities in connection with
the issuance of Debt Securities under this Indenture, of which the Company is
the sponsor.


 


“Trust Indenture Act” means the Trust Indenture Act of
1939, as amended from time to time, or any successor legislation.


 


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


 


“Trustee” means the Person identified as “Trustee” in
the first paragraph hereof, and, subject to the provisions of Article VI
hereof, shall also include its successors and assigns as Trustee hereunder.


 


“United States” means the United States of America and
the District of Columbia.


 


“U.S. Person” has the meaning given to United States
Person as set forth in Section 7701(a)(30) of the Code.


 


ARTICLE II

DEBT SECURITIES


 


Section 2.01           Authentication
and Dating.


 


Upon the execution and delivery of this Indenture, or
from time to time thereafter, Debt Securities in an aggregate principal amount
not in excess of $6,186,000 may be executed and delivered by the Company to the
Trustee for authentication, and the Trustee shall thereupon authenticate and
make available for delivery said Debt Securities to or upon the written order
of the Company, signed by its Chairman of the Board of Directors, Vice
Chairman, President or Chief Financial Officer or one of its Vice Presidents,
without any further action by the Company hereunder.  In authenticating such Debt Securities, and
accepting the additional responsibilities under this Indenture in relation to
such Debt Securities, the Trustee shall be entitled to receive, and (subject to
Section 6.01) shall be fully protected in relying upon a copy of any Board
Resolution or Board Resolutions relating thereto and, if applicable, an
appropriate record of any action taken pursuant to such resolution, in each
case certified by the Secretary or an Assistant Secretary or other officers
with appropriate delegated authority of the Company as the case may be.


 


The Trustee shall have the right to decline to
authenticate and deliver any Debt Securities under this Section if the
Trustee, being advised by counsel, determines that such action may not lawfully
be taken or if a Responsible Officer of the Trustee in good faith shall
determine that such action would expose the Trustee to personal liability to
existing Securityholders.


 


The definitive Debt Securities shall be typed,
printed, lithographed or engraved on steel engraved borders or may be produced
in any other manner, all as determined by the officers executing such Debt
Securities, as evidenced by their execution of such Debt Securities.


 


9
















 


Section 2.02           Form of
Trustee’s Certificate of Authentication.


 


The Trustee’s certificate of authentication on all
Debt Securities shall be in substantially the following form:


 


This certificate represents Debt Securities referred
to in the within-mentioned Indenture.


 


	
   

  	
  Wilmington
  Trust Company, 

  not in its individual capacity 

  but solely as trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Officer

  



 


Section 2.03           Form and
Denomination of Debt Securities.


 


The Debt Securities shall be substantially in the form
of Exhibit A hereto.  The Debt
Securities shall be in registered form without coupons and in minimum
denominations of $100,000 and any multiple of $1,000 in excess thereof.  The Debt Securities shall be numbered,
lettered, or otherwise distinguished in such manner or in accordance with such
plans as the officers executing the same may determine with the approval of the
Trustee as evidenced by the execution and authentication thereof.


 


Section 2.04           Execution
of Debt Securities.


 


The Debt Securities shall be signed in the name and on
behalf of the Company by the manual or facsimile signature of its Chairman of
the Board of Directors, Vice Chairman, President or Chief Financial Officer or
one of its Executive Vice Presidents, Senior Vice Presidents or Vice
Presidents, under its corporate seal (if legally required) which may be affixed
thereto or printed, engraved or otherwise reproduced thereon, by facsimile or
otherwise, and which need not be attested. 
Only such Debt Securities as shall bear thereon a certificate of authentication
substantially in the form herein before recited, executed by the Trustee or the
Authenticating Agent by the manual or facsimile signature of an authorized
officer, shall be entitled to the benefits of this Indenture or be valid or
obligatory for any purpose.  Such
certificate by the Trustee or the Authenticating Agent upon any Debt Security
executed by the Company shall be conclusive evidence that the Debt Security so
authenticated has been duly authenticated and delivered hereunder and that the
holder is entitled to the benefits of this Indenture.


 


In case any officer of the Company who shall have
signed any of the Debt Securities shall cease to be such officer before the
Debt Securities so signed shall have been authenticated and delivered by the
Trustee or the Authenticating Agent, or disposed of by the Company, such Debt
Securities nevertheless may be authenticated and delivered or disposed of as
though the Person who signed such Debt Securities had not ceased to be such
officer of the Company; and any Debt Security may be signed on behalf of the
Company by such Persons as, at the actual date of the execution of such Debt
Security, shall be the proper officers of the 


 


10

















 


Company, although at the
date of the execution of this Indenture any such person was not such an
officer.


 


Every Debt Security shall be dated the date of its
authentication.


 


Section 2.05           Exchange
and Registration of Transfer of Debt Securities.


 


The Company shall cause to be kept, at the office or
agency maintained for the purpose of registration of transfer and for exchange
as provided in Section 3.02, a register (the “Debt Security Register”) for
the Debt Securities issued hereunder in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
and transfer of all Debt Securities as provided in this Article II.  Such register shall be in written form or in
any other form capable of being converted into written form within a reasonable
time.


 


Debt Securities to be exchanged may be surrendered at
the Principal Office of the Trustee or at any office or agency to be maintained
by the Company for such purpose as provided in Section 3.02, and the
Company shall execute, the Company or the Trustee shall register and the
Trustee or the Authenticating Agent shall authenticate and make available for
delivery in exchange therefor, the Debt Security or Debt Securities which the
Securityholder making the exchange shall be entitled to receive.  Upon due presentment for registration of
transfer of any Debt Security at the Principal Office of the Trustee or at any
office or agency of the Company maintained for such purpose as provided in Section 3.02,
the Company shall execute, the Company or the Trustee shall register and the
Trustee or the Authenticating Agent shall authenticate and make available for
delivery in the name of the transferee or transferees, a new Debt Security for
a like aggregate principal amount. Registration or registration of transfer of
any Debt Security by the Trustee or by any agent of the Company appointed
pursuant to Section 3.02, and delivery of such Debt Security, shall be
deemed to complete the registration or registration of transfer of such Debt
Security.


 


All Debt Securities presented for registration of
transfer or for exchange or payment shall (if so required by the Company or the
Trustee or the Authenticating Agent) be duly endorsed by, or be accompanied by,
a written instrument or instruments of transfer in form satisfactory to the
Company and either the Trustee or the Authenticating Agent duly executed by,
the holder or such holder’s attorney duly authorized in writing.


 


No service charge shall be made for any exchange or
registration of transfer of Debt Securities, but the Company or the Trustee may
require payment of a sum sufficient to cover any tax, fee or other governmental
charge that may be imposed in connection therewith other than exchanges
pursuant to Section 2.07, Section 9.04 or Section 10.04 not involving
any transfer.


 


The Company or the Trustee shall not be required to
exchange or register a transfer of any Debt Security for a period of 15 days
immediately preceding the date of selection of Debt Securities for redemption.


 


Notwithstanding the foregoing, Debt Securities may not
be transferred prior to the Resale Restriction Termination Date except in
compliance with the legend set forth below, 


 


11

















 


unless otherwise
determined by the Company in accordance with applicable law, which legend shall
be placed on each Debt Security:


 


THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAWS.  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.  THE
HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS
ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN PRIOR
TO THE DATE WHICH IS THE LATER OF (i) ONE YEAR (OR SUCH SHORTER PERIOD OF
TIME AS PERMITTED BY RULE 144(b)(1) UNDER THE SECURITIES ACT) AFTER THE
LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND (Z) THE LAST
DATE ON WHICH THE COMPANY OR ANY AFFILIATE (AS DEFINED IN RULE 405 UNDER THE
SECURITIES ACT) OF THE COMPANY WAS THE HOLDER OF THIS SECURITY OR SUCH INTEREST
OR PARTICIPATION (OR ANY PREDECESSOR THERETO) AND (ii) SUCH LATER DATE, IF
ANY, AS MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW, ONLY (A) TO
THE COMPANY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE
144A”), TO A PERSON THE HOLDER REASONABLY BELIEVES IS A “QUALIFIED
INSTITUTIONAL BUYER”, AS DEFINED IN RULE 144A, THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT
TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN
“ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2),
(3), (7) OR (8) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THIS SECURITY OR SUCH INTEREST OR PARTICIPATION FOR ITS OWN ACCOUNT,
OR FOR THE ACCOUNT OF SUCH AN 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, (D) PURSUANT TO OFFERS AND SALES TO
NON-US PERSONS THAT OCCUR OUTSIDE THE UNITED STATES PURSUANT TO REGULATION S
UNDER THE SECURITIES ACT  OR (E) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSE (C) OR (E) ABOVE TO REQUIRE THE DELIVERY
OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY
TO IT IN ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE OBTAINED
FROM THE COMPANY.  THE HOLDER OF THIS
SECURITY OR ANY INTEREST OR PARTICIPATION 


 


12

















 


HEREIN, BY ITS ACCEPTANCE HEREOF
OR THEREOF, AS THE CASE MAY BE, AGREES THAT IT WILL COMPLY WITH THE
FOREGOING RESTRICTIONS.


 


THE HOLDER OF THIS SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE,
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 THIS SECURITY OR
ANY INTEREST OR PARTICIPATION HEREIN, UNLESS SUCH PURCHASER OR HOLDER IS
ELIGIBLE FOR THE 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 OR
SUCH INTEREST OR PARTICIPATION 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 THIS SECURITY OR
ANY INTEREST OR PARTICIPATION HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS
PURCHASE AND HOLDING HEREOF OR THEREOF, AS THE CASE MAY BE, 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 AND HOLDING 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.


 


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


 


THIS SECURITY WILL BE ISSUED AND MAY BE
TRANSFERRED ONLY IN MINIMUM DENOMINATIONS OF $100,000 AND MULTIPLES OF $1,000
IN EXCESS THEREOF.  ANY ATTEMPTED
TRANSFER OF THIS SECURITY IN DENOMINATIONS OF LESS THAN $100,000 SHALL BE
DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE
SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN FOR ANY PURPOSE, INCLUDING, BUT 


 


13

















 


NOT LIMITED TO, THE RECEIPT OF
DISTRIBUTIONS ON THIS SECURITY OR SUCH INTEREST OR PARTICIPATION, AND SUCH
PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS
SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN.


 


THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT
INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES,
INCLUDING THE FEDERAL DEPOSIT INSURANCE CORPORATION (THE “FDIC”).  THIS OBLIGATION IS SUBORDINATED TO THE CLAIMS
OF THE DEPOSITORS AND THE CLAIMS OF GENERAL AND SECURED CREDITORS OF THE
COMPANY, IS INELIGIBLE AS COLLATERAL FOR A LOAN BY THE COMPANY OR ANY OF ITS
SUBSIDIARIES AND IS NOT SECURED.


 


Section 2.06           Mutilated,
Destroyed, Lost or Stolen Debt Securities.


 


In case any Debt Security shall become mutilated or be
destroyed, lost or stolen, the Company shall execute, and upon its written
request the Trustee shall authenticate and deliver, a new Debt Security bearing
a number not contemporaneously outstanding, in exchange and substitution for
the mutilated Debt Security, or in lieu of and in substitution for the Debt
Security so destroyed, lost or stolen. 
In every case the applicant for a substituted Debt Security shall
furnish to the Company and the Trustee such security or indemnity as may be
required by them to save each of them harmless, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Company and
the Trustee evidence to their satisfaction of the destruction, loss or theft of
such Debt Security and of the ownership thereof.


 


The Trustee may authenticate any such substituted Debt
Security and deliver the same upon the written request or authorization of any
officer of the Company.  Upon the
issuance of any substituted Debt Security, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses connected therewith.  In case any Debt Security which has matured
or is about to mature or has been called for redemption in full shall become
mutilated or be destroyed, lost or stolen, the Company may, instead of issuing
a substitute Debt Security, pay or authorize the payment of the same (without
surrender thereof except in the case of a mutilated Debt Security) if the
applicant for such payment shall furnish to the Company and the Trustee such
security or indemnity as may be required by them to save each of them harmless
and, in case of destruction, loss or theft, evidence satisfactory to the
Company and to the Trustee of the destruction, loss or theft of such Security
and of the ownership thereof.


 


Every substituted Debt Security issued pursuant to the
provisions of this Section 2.06 by virtue of the fact that any such Debt
Security is destroyed, lost or stolen shall constitute an additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Debt Security shall be found at any time, and shall be entitled to all
the benefits of this Indenture equally and proportionately with any and all
other Debt Securities duly issued hereunder. 
All Debt Securities shall be held and owned upon the express condition
that, to the extent permitted by applicable law, the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Debt Securities and shall preclude any and all other rights or
remedies notwithstanding any law or statute existing or hereafter enacted to
the 


 


14

















 


contrary with respect to
the replacement or payment of negotiable instruments or other securities
without their surrender.


 


Section 2.07           Temporary
Debt Securities.


 


Pending the preparation of definitive Debt Securities,
the Company may execute and the Trustee shall authenticate and make available
for delivery temporary Debt Securities that are typed, printed or lithographed.
Temporary Debt Securities shall be issuable in any authorized denomination, and
substantially in the form of the definitive Debt Securities but with such
omissions, insertions and variations as may be appropriate for temporary Debt
Securities, all as may be determined by the Company.  Every such temporary Debt Security shall be
executed by the Company and be authenticated by the Trustee upon the same
conditions and in substantially the same manner, and with the same effect, as
the definitive Debt Securities.  Without
unreasonable delay, the Company will execute and deliver to the Trustee or the
Authenticating Agent definitive Debt Securities and thereupon any or all
temporary Debt Securities may be surrendered in exchange therefor, at the
Principal Office of the Trustee or at any office or agency maintained by the
Company for such purpose as provided in Section 3.02, and the Trustee or
the Authenticating Agent shall authenticate and make available for delivery in
exchange for such temporary Debt Securities a like aggregate principal amount
of such definitive Debt Securities.  Such
exchange shall be made by the Company at its own expense and without any charge
therefor except that in case of any such exchange involving a registration of
transfer the Company may require payment of a sum sufficient to cover any tax,
fee or other governmental charge that may be imposed in relation thereto.  Until so exchanged, the temporary Debt
Securities shall in all respects be entitled to the same benefits under this
Indenture as definitive Debt Securities authenticated and delivered hereunder.


 


Section 2.08           Payment
of Interest.


 


Each Debt Security will bear interest at the then
applicable Interest Rate (i) in the case of the initial Interest Period,
for the period from, and including, the date of original issuance of such Debt
Security to, but excluding, the initial Interest Payment Date and (ii) thereafter,
for the period from, and including, the first day following the end of the
preceding Interest Period to, but excluding, the applicable Interest Payment
Date or, in the case of the last Interest Period, the related Optional
Redemption Date, Special Redemption Date or Maturity Date, as applicable (each
such period, an “Interest Period”), on the principal thereof, on any overdue
principal and (to the extent that payment of such interest is enforceable under
applicable law) on Deferred Interest and on any overdue installment of interest
(including Defaulted Interest), payable (subject to the provisions of Article XV)
on each Interest Payment Date and on the Maturity Date, any Optional Redemption
Date or the Special Redemption Date, as the case may be.  Interest and any Deferred Interest on any
Debt Security that is payable, and is punctually paid or duly provided for by
the Company, on any Interest Payment Date shall be paid to the Person in whose
name such Debt Security (or one or more Predecessor Securities) is registered
at the close of business on the regular record date for such interest
installment, except that interest and any Deferred Interest payable on the
Maturity Date, any Optional Redemption Date or the Special Redemption Date, as
the case may be, other than any Interest Payment Date shall be paid to the
Person to whom principal is paid.  In
case (i) the Maturity Date of any Debt Security or (ii) any Debt
Security or portion thereof is called for redemption and the related Optional
Redemption 


 


15

















 


Date or the Special
Redemption Date, as the case may be, is subsequent to the regular record date
with respect to any Interest Payment Date and prior to such Interest Payment
Date, interest on such Debt Security will be paid upon presentation and
surrender of such Debt Security.


 


Any interest on any Debt Security, other than Deferred
Interest, that is payable, but is not punctually paid or duly provided for by
the Company, on any Interest Payment Date (herein called “Defaulted Interest”)
shall forthwith cease to be payable to the holder on the relevant regular
record date by virtue of having been such holder, and such Defaulted Interest
shall be paid by the Company to the Persons in whose names such Debt Securities
(or their respective Predecessor Securities) are registered at the close of
business on a special record date for the payment of such Defaulted Interest,
which shall be fixed in the following manner: 
the Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each such Debt Security and the date
of the proposed payment, and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
reasonably satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as provided in this
paragraph.  Thereupon the Trustee shall
fix a special record date for the payment of such Defaulted Interest, which
shall not be more than fifteen nor less than ten days prior to the date of the
proposed payment and not less than ten days after the receipt by the Trustee of
the notice of the proposed payment.  The
Trustee shall promptly notify the Company of such special record date and, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the special record date therefor to be
mailed, first class postage prepaid, to each Securityholder at his or her address
as it appears in the Debt Security Register, not less than ten days prior to
such special record date.  Notice of the
proposed payment of such Defaulted Interest and the special record date
therefor having been mailed as aforesaid, such Defaulted Interest shall be paid
to the Persons in whose names such Debt Securities (or their respective
Predecessor Securities) are registered on such special record date and
thereafter the Company shall have no further payment obligation in respect of
the Defaulted Interest.


 


Any interest scheduled to become payable on an
Interest Payment Date occurring during an Extension Period shall not be
Defaulted Interest and shall be payable on such other date as may be specified
in the terms of such Debt Securities.


 


The term “regular record date”, as used in this
Section, shall mean the fifteenth day prior to the applicable Interest Payment
Date, whether or not such day is a Business Day.


 


Subject to the foregoing provisions of this Section,
each Debt Security delivered under this Indenture upon registration of transfer
of or in exchange for or in lieu of any other Debt Security shall carry the
rights to interest accrued and unpaid, and to accrue, that were carried by such
other Debt Security.


 


Section 2.09           Cancellation
of Debt Securities Paid, etc.


 


All Debt Securities surrendered for the purpose of
payment, redemption, exchange or registration of transfer, shall, if
surrendered to the Company or any Paying Agent, 


 


16

















 


be surrendered to the
Trustee and promptly canceled by it, or, if surrendered to the Trustee or any
Authenticating Agent, shall be promptly canceled by it, and no Debt Securities
shall be issued in lieu thereof except as expressly permitted by any of the
provisions of this Indenture.  All Debt
Securities canceled by any Authenticating Agent shall be delivered to the
Trustee.  The Trustee shall destroy all
canceled Debt Securities unless the Company otherwise directs the Trustee in
writing, in which case the Trustee shall dispose of such Debt Securities as
directed by the Company.  The Company
shall promptly deliver or cause to be delivered to the Trustee for cancellation
any Debt Securities previously authenticated and delivered hereunder that the
Company or any Affiliate (as defined in Rule 405 under the Securities Act)
of the Company may have acquired in any manner whatsoever, and all Debt
Securities so delivered shall be promptly cancelled. Any such acquisition of
Debt Securities by the Company or any Affiliate of the Company shall not
operate as a redemption or satisfaction of the indebtedness represented by such
Debt Securities unless and until the same are surrendered to the Trustee for
cancellation.


 


Section 2.10           Computation
of Interest.


 


(a)           The amount of interest payable on the
Debt Securities will be computed (i) with respect to any Interest Period
prior to the Interest Period commencing on or after the Interest Payment Date
in June 2013, on the basis of a 360-day year consisting of twelve 30-day
months and (ii) with respect to any Interest Period commencing on or after
the Interest Payment Date in June 2013, on the basis of a 360-day year and
the actual number of days elapsed in such Interest Period.


 


(b)           LIBOR shall be determined by the
Calculation Agent for each Interest Period commencing on or after the Interest
Payment Date in June 2013 in accordance with the following provisions:


 


(i)            On
the second LIBOR Business Day (provided, that on such day commercial banks are
open for business (including dealings in foreign currency deposits) in London
(a “LIBOR Banking Day”), and otherwise the next preceding LIBOR Business Day
that is also a LIBOR Banking Day) prior to the Interest
Payment Date that commences such Interest Period (each such day, a
“LIBOR Determination Date”), LIBOR shall equal the rate, as obtained by the
Calculation Agent, for three-month U.S. Dollar deposits in Europe, which
appears on Telerate (as defined in the International Swaps and Derivatives
Association, Inc. 2000 Interest Rate and Currency Exchange Definitions) page 3750
or such other page as may replace such page 3750, as of 11:00 a.m.
(London time) on such LIBOR Determination Date, as reported by Bloomberg
Financial Markets Commodities News or any successor service (“Telerate Page 3750”).
 “LIBOR Business Day” means any day that
is not a Saturday, Sunday or other day on which commercial banking institutions
in the City of New York or Wilmington, Delaware are authorized or obligated by
law or executive order to be closed.  If
such rate is superseded on Telerate Page 3750 by a corrected rate before
12:00 noon (London time) on such LIBOR Determination Date, the corrected rate
as so substituted will be LIBOR for such LIBOR Determination Date.


 


(ii)           If,
on such LIBOR Determination Date, such rate does not appear on Telerate Page 3750,
the Calculation Agent shall determine the arithmetic mean of the 


 


17

















 


offered
quotations of the Reference Banks to leading banks in the London interbank
market for three-month U.S. Dollar deposits in Europe (in an amount determined
by the Calculation Agent) by reference to requests for quotations as of
approximately 11:00 a.m. (London time) on such LIBOR Determination Date
made by the Calculation Agent to the Reference Banks.  If, on such LIBOR Determination Date, at
least two of the Reference Banks provide such quotations, LIBOR shall equal the
arithmetic mean of such quotations.  If,
on such LIBOR Determination Date, only one or none of the Reference Banks
provide such a quotation, LIBOR shall be deemed to be the arithmetic mean of
the offered quotations that at least two leading banks in The City of New York
(as selected by the Calculation Agent) are quoting on such LIBOR Determination
Date for three-month U.S. Dollar deposits in Europe at approximately 11:00 a.m.
(London time) (in an amount determined by the Calculation Agent). As used
herein, “Reference Banks” means four major banks in the London interbank market
selected by the Calculation Agent.


 


(iii)          If
the Calculation Agent is required but is unable to determine a rate in
accordance with at least one of the procedures provided above, LIBOR for such
Interest Period shall be LIBOR in effect for the immediately preceding Interest
Period.


 


(c)           All percentages resulting from any
calculations on the Debt 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).


 


(d)           On each LIBOR Determination Date, the
Calculation Agent shall notify, in writing, the Company and the Paying Agent of
the applicable Interest Rate that applies to the related Interest Period.  The Calculation Agent shall, upon the request
of a holder of any Debt Securities, inform such holder of the Interest Rate
that applies to the related Interest Period. 
All calculations made by the Calculation Agent in the absence of
manifest error shall be conclusive for all purposes and binding on the Company
and the holders of the Debt Securities. 
The Paying Agent shall be entitled to rely on information received from
the Calculation Agent or the Company as to the applicable Interest Rate.  The Company shall, from time to time, provide
any necessary information to the Paying Agent relating to any original issue discount
and interest on the Debt Securities that is included in any payment and
reportable for taxable income calculation purposes.


 


Section 2.11           Extension
of Interest Payment Period.


 


So long as no Event of
Default pursuant to Sections 5.01(b), (e), (f), (g), (h) or (i) of
this Indenture has occurred and is continuing, the Company shall have the
right, from time to time and without causing an Event of Default, to defer
payments of interest on the Debt Securities by extending the interest payment
period on the Debt Securities at any time and from time to time during the term
of the Debt Securities, for up to 20 consecutive quarterly periods (each such
extended interest payment period, together with all previous and further
consecutive extensions thereof, is referred to herein as an “Extension Period”).  No Extension Period may end on a date other
than an Interest Payment Date or extend beyond the Maturity Date, any Optional
Redemption Date or the Special Redemption Date, as the case may be.  During any Extension 


 


18

















 


Period, interest will
continue to accrue on the Debt Securities, and interest on such accrued
interest (such accrued interest and interest thereon referred to herein as
“Deferred Interest”) will accrue at an annual rate equal to the Interest Rate
applicable during such Extension Period, compounded quarterly from the date
such Deferred Interest would have been payable were it not for the Extension
Period, to the extent permitted by applicable law.  No interest or Deferred Interest (except any Additional Amounts that may be due and payable)
shall be due and payable during an Extension Period, except at the end
thereof.  At the end of any Extension
Period, the Company shall pay all Deferred Interest then accrued and unpaid on
the Debt Securities; provided, however, that during any Extension
Period, the Company shall be subject to the restrictions set forth in Section 3.08.  Prior to the termination of any Extension
Period, the Company may further extend such Extension Period, provided,
that no Extension Period (including all previous and further consecutive
extensions that are part of such Extension Period) shall exceed 20 consecutive
quarterly periods.  Upon the termination
of any Extension Period and upon the payment of all Deferred Interest, the
Company may commence a new Extension Period, subject to the foregoing
requirements.  The Company must give the
Trustee notice of its election to begin or extend an Extension Period no later
than the close of business on the fifteenth Business Day prior to the
applicable Interest Payment Date.  The
Trustee shall give notice of the Company’s election to begin or extend an
Extension Period to the Securityholders, promptly after receipt of notice from
the Company of its election to begin or extend an Extension Period.


 


Section 2.12           CUSIP
Numbers.


 


The Company in issuing the Debt Securities may use a
“CUSIP” number (if then generally in use), and, if so, the Trustee shall use a
“CUSIP” number in notices of redemption as a convenience to Securityholders; provided,
that any such notice may state that no representation is made as to the
correctness of such number either as printed on the Debt Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Debt Securities, and any such
redemption shall not be affected by any defect in or omission of such
numbers.  The Company will promptly
notify the Trustee in writing of any change in the CUSIP number.


 


Section 2.13           Global
Debentures.


 


(a)           Upon the election of an owner of
beneficial interests in outstanding Debt Securities, the Debt Securities owned
by such beneficial owner shall be issued in the form of one or more Global
Debentures.  Each Global Debenture issued
under this Indenture shall be registered in the name of the Depositary
designated by the Company for such Global Debenture or a nominee of such
Depositary and delivered to such Depositary or a nominee thereof or custodian
therefor, and each such Global Debenture shall constitute a single Debt
Security for all purposes of this Indenture.


 


(b)           Notwithstanding any other provision
in this Indenture, no Global Debenture may be exchanged in whole or in part for
Debt Securities in certificated form, and no transfer of a Global Debenture in
whole or in part may be, registered in the name of any Person other than the
Depositary for such Global Debenture or a nominee thereof unless (i) such
Depositary advises the Trustee and the Company in writing that such Depositary
is no longer 


 


19

















 


willing or able to properly discharge its
responsibilities as Depositary with respect to such Global Debenture, and no
qualified successor is appointed by the Company within ninety (90) days of
receipt by the Company of such notice, (ii) such Depositary ceases to be a
clearing agency registered under the Exchange Act and no successor is appointed
by the Company within ninety (90) days after obtaining knowledge of such event
or (iii) an Event of Default shall have occurred and be continuing.  Upon obtaining knowledge of the occurrence of
any event specified in clause (i), (ii) or (iii) above, the Trustee
shall notify the Depositary and instruct the Depositary to notify all owners of
beneficial interests in such Global Debenture of the occurrence of such event
and of the availability of Debt Securities in certificated form to such
beneficial owners requesting the same. 
Upon the issuance of such Debt Securities in certificated form and the
registration in the Debt Security Register of such Debt Securities in the names
of the holders thereof, the Trustee shall recognize such holders as holders of
Debt Securities for all purposes of this Indenture and the Debt Securities.


 


(c)           If any Global Debenture is to be
exchanged for Debt Securities in certificated form or canceled in part, or if a
Debt Security in certificated form is to be exchanged in whole or in part for a
beneficial interest in any Global Debenture, then either (i) such Global
Debenture shall be so surrendered for exchange or cancellation as provided
herein or (ii) the principal amount thereof shall be reduced or increased,
subject to Section 2.03, by an amount equal to the portion thereof to be
so exchanged or canceled, or equal to the principal amount of such Debt
Security to be so exchanged for a beneficial interest therein, as the case may
be, by means of an appropriate adjustment made on the records of the Debt
Security registrar, whereupon the Trustee, in accordance with the Applicable
Depositary Procedures, shall instruct the Depositary or its authorized
representative to make a corresponding adjustment to its records.  Upon any such surrender or adjustment of a
Global Debenture by the Depositary, accompanied by registration instructions,
the Company shall execute and the Trustee shall authenticate and deliver Debt
Securities issuable in exchange for such Global Debenture (or any portion
thereof) in accordance with the instructions of the Depositary.  The Trustee may conclusively rely on, and
shall be fully protected in relying on, such instructions.


 


(d)           Every Debt Security authenticated and
delivered upon registration of transfer of, or in exchange for or in lieu of, a
Global Debenture or any portion thereof shall be authenticated and delivered in
the form of, and shall be, a Global Debenture, unless such Debt Security is
registered in the name of a Person other than the Depositary for such Global
Debenture or a nominee thereof.


 


(e)           Debt Securities distributed to
holders of Book-Entry Capital Securities (as defined in the Declaration) upon
the dissolution of the Trust shall be distributed in the form of one or more
Global Debentures registered in the name of the Depositary or its nominee, and
deposited with the Debt Securities registrar, as custodian for such Depositary,
or with such Depositary, for credit by the Depositary to the owners of
beneficial interests in such Book-Entry Capital Securities.  Debt Securities distributed to holders of
Capital Securities in certificated form upon the dissolution of the Trust shall
be issued in certificated form.


 


(f)            The Depositary or its nominee, as
the registered owner of a Global Debenture, shall be the holder of such Global
Debenture for all purposes under this Indenture and the Debt Securities, and
owners of beneficial interests in a Global Debenture shall hold such 


 


20

















 


interests pursuant to the Applicable Depositary
Procedures.  Accordingly, any such
owner’s beneficial interest in a Global Debenture shall be shown only on, and
the transfer of such interest shall be effected only through, records
maintained by the Depositary or its nominee or its Depositary
Participants.  The Debt Securities
registrar and the Trustee shall be entitled to deal with the Depositary for all
purposes of this Indenture relating to a Global Debenture as the sole holder of
the Debt Security and shall have no obligation to any beneficial owner of a
Global Debenture.  Neither the Trustee
nor the Debt Securities registrar shall have any liability in respect of any
transfers affected by the Depositary or its Depositary Participants.


 


(g)           The rights of owners of beneficial
interests in a Global Debenture shall be exercised only through the Depositary
and shall be limited to those established by law and agreements between such
owners and the Depositary and/or its Depositary Participants.


 


(h)           No owner of any beneficial interest
in any Global Debenture shall have any rights under this Indenture with respect
to such Global Debenture, and the Depositary may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the owner and holder of
such Global Debenture for all purposes under the Indenture.  None of the Company, the Trustee nor any
agent of the Company or the Trustee will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests in a Global Debenture or maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.  Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any agent
of the Company or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depositary or impair, as between
the Depositary and such beneficial owners, the operation of customary practices
governing the exercise of the rights of the Depositary or its nominee as holder
of any Debt Security.


 


(i)            Global Debentures shall bear the
following legend on the face thereof:


 


THIS SECURITY IS A GLOBAL DEBENTURE WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF THE DEPOSITORY TRUST COMPANY (“DTC”) OR A NOMINEE OF DTC. THIS SECURITY IS
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC
OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE,
AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A
WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER
NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.


 


UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED 


 


21

















 


REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.


 


ARTICLE III

PARTICULAR COVENANTS OF THE COMPANY


 


Section 3.01           Payment
of Principal, Premium and Interest; Agreed Treatment of the Debt Securities.


 


(a)           The Company covenants and agrees that
it will duly and punctually pay or cause to be paid all payments due in respect
of the Debt Securities at the place, at the respective times and in the manner
provided in this Indenture and the Debt Securities.  Payment of the principal of and premium, if
any, and interest on the Debt Securities due on the Maturity Date, any Optional
Redemption Date or the Special Redemption Date, as the case may be, will be
made by the Company in immediately available funds against presentation and
surrender of such Debt Securities.  At
the option of the Company, each installment of interest on the Debt Securities
due on an Interest Payment Date other than the Maturity Date, any Optional
Redemption Date or the Special Redemption Date, as the case may be, may be paid
(i) by mailing checks for such interest payable to the order of the
holders of Debt Securities entitled thereto as they appear on the Debt Security
Register or (ii) by wire transfer of immediately available funds to any
account with a banking institution located in the United States designated by
such holders to the Paying Agent no later than the related record date.  Notwithstanding anything to the contrary
contained in this Indenture or any Debt Security, if the Trust or the trustee
of the Trust is the holder of any Debt Security, then all payments in respect
of such Debt Security shall be made by the Company in immediately available
funds when due.


 


(b)           The Company will treat the Debt
Securities as indebtedness, and the interest payable in respect of such Debt
Securities (including any Additional Amounts) as interest, for all U.S. federal
income tax purposes.  All payments in
respect of such Debt Securities will be made free and clear of U.S. withholding
tax provided, that (i) any beneficial owner thereof that is a “United
States person” within the meaning of Section 7701(a)(30) of the Code (A) has
provided an Internal Revenue Service Form W-9 (or any substitute or successor
form) in the manner required establishing its status as a “United States
person” for U.S. federal income tax purposes, and (B) the Internal Revenue
Service has neither notified the Issuer that the taxpayer identification number
furnished by such beneficial owner is incorrect nor notified the Issuer that
there is underreporting by such beneficial owner, and (ii) any beneficial
owner thereof that is not a “United States person” within the meaning of Section 7701(a)(30)
of the Code has provided an Internal Revenue Service Form W-8 BEN,
Internal Revenue Service Form W-8ECI, or Internal Revenue Service Form W-8EXP,
as applicable (or any substitute or successor form) in the manner required
establishing its non-U.S. status for U.S. federal income tax purposes.


 


(c)           As of the date of this Indenture, the
Company represents that it has no intention to exercise its right under Section 2.11
to defer payments of interest on the Debt Securities by commencing an Extension
Period.


 


22
















 


(d)           As of the date of this Indenture, the
Company represents that the likelihood that it would exercise its right under Section 2.11
to defer payments of interest on the Debt Securities by commencing an Extension
Period at any time during which the Debt Securities are outstanding is remote
because of the restrictions that would be imposed on the Company’s ability to
declare or pay dividends or distributions on, or to redeem, purchase or make a
liquidation payment with respect to, any of its outstanding equity and on the
Company’s ability to make any payments of principal of or premium, if any, or
interest on, or repurchase or redeem, any of its debt securities that rank pari passu in all respects with or junior in interest to the
Debt Securities.


 


Section 3.02           Offices
for Notices and Payments, etc.


 


So long as any of the Debt Securities remain
outstanding, the Company will maintain in Wilmington, Delaware an office or
agency where the Debt Securities may be presented for payment, an office or
agency where the Debt Securities may be presented for registration of transfer
and for exchange as provided in this Indenture and an office or agency where
notices and demands to or upon the Company in respect of the Debt Securities or
of this Indenture may be served.  The
Company will give to the Trustee written notice of the location of any such
office or agency and of any change of location thereof.  Until otherwise designated from time to time
by the Company in a notice to the Trustee, or specified as contemplated by Section 2.05,
such office or agency for all of the above purposes shall be the Principal
Office of the Trustee.  In case the
Company shall fail to maintain any such office or agency in Wilmington,
Delaware, or shall fail to give such notice of the location or of any change in
the location thereof, presentations and demands may be made and notices may be
served at the Principal Office of the Trustee.


 


In addition to any such office or agency, the Company
may from time to time designate one or more offices or agencies outside
Wilmington, Delaware where the Debt Securities may be presented for
registration of transfer and for exchange in the manner provided in this
Indenture, and the Company may from time to time rescind such designation, as
the Company may deem desirable or expedient; provided, however,
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain any such office or agency in Wilmington, Delaware
for the purposes above mentioned.  The
Company will give to the Trustee prompt written notice of any such designation
or rescission thereof.


 


Section 3.03           Appointments
to Fill Vacancies in Trustee’s Office.


 


The Company, whenever necessary to avoid or fill a
vacancy in the office of Trustee, will appoint, in the manner provided in Section 6.09,
a Trustee, so that there shall at all times be a Trustee hereunder.


 


Section 3.04           Provision
as to Paying Agent.


 


(a)           If the Company shall appoint a Paying
Agent other than the Trustee, it will cause such Paying Agent to execute and
deliver to the Trustee an instrument in which such agent shall agree with the
Trustee, subject to the provision of this Section 3.04,


 


23

















 


(i)            that
it will hold all sums held by it as such agent for the payment of all payments
due on the Debt Securities (whether such sums have been paid to it by the
Company or by any other obligor on the Debt Securities) in trust for the
benefit of the holders of the Debt Securities;


 


(ii)           that
it will give the Trustee prompt written notice of any failure by the Company
(or by any other obligor on the Debt Securities) to make any payment on the
Debt Securities when the same shall be due and payable; and


 


(iii)          that
it will, at any time during the continuance of any Event of Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held
in trust by such Paying Agent.


 


(b)           If the Company shall act as its own
Paying Agent, it will, on or before each due date of the payments due on the
Debt Securities, set aside, segregate and hold in trust for the benefit of the
holders of the Debt Securities a sum sufficient to make such payments so
becoming due and will notify the Trustee in writing of any failure to take such
action and of any failure by the Company (or by any other obligor under the
Debt Securities) to make any payment on the Debt Securities when the same shall
become due and payable.


 


Whenever the Company shall have one or more Paying
Agents for the Debt Securities, it will, on or prior to each due date of the
payments on the Debt Securities, deposit with a Paying Agent a sum sufficient
to pay all payments so becoming due, such sum to be held in trust for the
benefit of the Persons entitled thereto and (unless such Paying Agent is the
Trustee) the Company shall promptly notify the Trustee in writing of its action
or failure to act.


 


(c)           Anything in this Section 3.04 to
the contrary notwithstanding, the Company may, at any time, for the purpose of
obtaining a satisfaction and discharge with respect to the Debt Securities, or
for any other reason, pay, or direct any Paying Agent to pay, to the Trustee
all sums held in trust by the Company or any such Paying Agent, such sums to be
held by the Trustee upon the same terms and conditions herein contained.


 


(d)           Anything in this Section 3.04 to
the contrary notwithstanding, the agreement to hold sums in trust as provided
in this Section 3.04 is subject to Sections 12.03 and 12.04.


 


(e)           The Company hereby initially appoints
the Trustee to act as paying agent for the Debt Securities (the “Paying
Agent”).


 


Section 3.05           Certificate
to Trustee.


 


The Company will deliver to the Trustee on or before
120 days after the end of each fiscal year, so long as Debt Securities are
outstanding hereunder, a Certificate, substantially in the form of Exhibit B
attached hereto, stating that in the course of the performance by the signers
of their duties as officers of the Company they would normally have knowledge
of any default by the Company in the performance of any covenants of the
Company contained herein, stating whether or not they have knowledge of any
such default and, if so, specifying each such default of which the signers have
knowledge and the nature thereof.


 


24

















 


Section 3.06           Additional
Amounts.


 


If and for so long as the Trust is the holder of all
Debt Securities and is subject to or otherwise required to pay (or is required
to withhold from distributions to holders of Trust Securities) any additional
taxes (including withholding taxes), duties, assessments or other governmental
charges as a result of a Tax Event, the Company will pay such additional
amounts (the “Additional Amounts”) on the Debt Securities or the Trust
Securities, as the case may be, as shall be required so that the net amounts
received and retained by the holders of Debt Securities or Trust Securities, as
the case may be, after payment of all taxes (including withholding taxes),
duties, assessments or other governmental charges, will be equal to the amounts
that such holders would have received and retained had no such taxes (including
withholding taxes), duties, assessments or other governmental charges been
imposed.


 


Whenever in this Indenture or the Debt Securities
there is a reference in any context to the payment of principal of or premium,
if any, or interest on the Debt Securities, such mention shall be deemed to
include mention of payments of the Additional Amounts provided for in this Section to
the extent that, in such context, Additional Amounts are, were or would be
payable in respect thereof pursuant to the provisions of this Section and
express mention of the payment of Additional Amounts (if applicable) in any
provisions hereof shall not be construed as excluding Additional Amounts in
those provisions hereof where such express mention is not made, provided,
however, that, notwithstanding anything to the contrary contained in
this Indenture or any Debt Security, the deferral of the payment of interest
during an Extension Period pursuant to Section 2.11 shall not defer the
payment of any Additional Amounts that may be due and payable.


 


Section 3.07           Compliance
with Consolidation Provisions.


 


The Company will not, while any of the Debt Securities
remain outstanding, consolidate with, or merge into, any other Person, or merge
into itself, or sell, convey, transfer or otherwise dispose of all or
substantially all of its property or capital stock to any other Person unless
the provisions of Article XI hereof are complied with.


 


Section 3.08           Limitation
on Dividends.


 


If (i) there shall have occurred and be
continuing a Default or an Event of Default, (ii) the Company shall be in
default with respect to its payment of any obligations under the Capital
Securities Guarantee or (iii) the Company shall have given notice of its
election to defer payments of interest on the Debt Securities by extending the
interest payment period as provided herein and such period, or any extension
thereof, shall have commenced and be continuing, then the Company may not (A) declare
or pay any dividends or distributions on, or redeem, purchase, acquire, or make
a liquidation payment with respect to, any of the Company’s capital stock, (B) make
any payment of principal of or premium, if any, or interest on or repay,
repurchase or redeem any debt securities of the Company that rank pari passu in all respects with or junior in interest to the
Debt Securities or (C) make any payment under any guarantees of the
Company that rank pari passu in all respects with
or junior in interest to the Capital Securities Guarantee (other than (a) repurchases,
redemptions or other acquisitions of shares of capital stock of the Company (I) in
connection with any employment contract, benefit plan or other similar 


 


25

















 


arrangement with or for
the benefit of one or more employees, officers, directors or consultants, (II) in
connection with a dividend reinvestment or stockholder stock purchase plan or (III) in
connection with the issuance of capital stock of the Company (or securities
convertible into or exercisable for such capital stock) as consideration in an
acquisition transaction entered into prior to the occurrence of (i), (ii) or
(iii) above, (b) as a result of any exchange or conversion of any
class or series of the Company’s capital stock (or any capital stock of a
subsidiary of the Company) for any class or series of the Company’s capital
stock or of any class or series of the Company’s indebtedness for any class or
series of the Company’s capital stock, (c) the purchase of fractional
interests in shares of the Company’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
stockholder’s rights plan, or the issuance of rights, stock or other property
under any stockholder’s rights plan, or the redemption or repurchase of rights
pursuant thereto or (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 in interest to such stock).


 


Section 3.09           Covenants
as to the Trust.


 


For so long as such Trust Securities remain
outstanding, the Company shall maintain 100% ownership of the Common
Securities; provided, however, that any permitted successor of
the Company under this Indenture may succeed to the Company’s ownership of such
Common Securities.  The Company, as owner
of the Common Securities, shall use commercially reasonable efforts to cause
the Trust (a) to remain a statutory trust, except in connection with a
distribution of Debt Securities to the holders of Trust Securities in
liquidation of the Trust, the redemption of all of the Trust Securities or
mergers, consolidations or amalgamations, each as permitted by the Declaration,
(b) to otherwise continue to be classified as a grantor trust for United
States federal income tax purposes and (c) to cause each holder of Trust
Securities to be treated as owning an undivided beneficial interest in the Debt
Securities.


 


ARTICLE IV

LISTS


 


Section 4.01           Securityholders’
Lists.


 


The Company covenants and agrees that it will furnish
or cause to be furnished to the Trustee:


 


(a)           on each regular record date for an
Interest Payment Date, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Securityholders of the Debt Securities
as of such record date; and


 


(b)           at such other times as the Trustee
may request in writing, within 30 days after the receipt by the Company of any
such request, a list of similar form and content as of a date not more than 15
days prior to the time such list is furnished; except that no such lists need
be furnished under this Section 4.01 so long as the Trustee is in
possession thereof by reason of its acting as Debt Security registrar.


 


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Section 4.02           Preservation
and Disclosure of Lists.


 


(a)           The Trustee shall preserve, in as
current a form as is reasonably practicable, all information as to the names
and addresses of the holders of Debt Securities (1) contained in the most
recent list furnished to it as provided in Section 4.01 or (2) received
by it in the capacity of Debt Securities registrar (if so acting)
hereunder.  The Trustee may destroy any
list furnished to it as provided in Section 4.01 upon receipt of a new
list so furnished.


 


(b)           In case three or more holders of Debt
Securities (hereinafter referred to as “applicants”) apply in writing to the
Trustee and furnish to the Trustee reasonable proof that each such applicant
has owned a Debt Security for a period of at least six months preceding the
date of such application, and such application states that the applicants
desire to communicate with other holders of Debt Securities with respect to
their rights under this Indenture or under such Debt Securities and is
accompanied by a copy of the form of proxy or other communication which such
applicants propose to transmit, then the Trustee shall within five Business
Days after the receipt of such application, at its election, either:


 


(i)            afford
such applicants access to the information preserved at the time by the Trustee
in accordance with the provisions of subsection (a) of this Section 4.02,
or


 


(ii)           inform
such applicants as to the approximate number of holders of Debt Securities
whose names and addresses appear in the information preserved at the time by
the Trustee in accordance with the provisions of subsection (a) of this Section 4.02,
and as to the approximate cost of mailing to such Securityholders the form of
proxy or other communication, if any, specified in such application.


 


If the Trustee shall elect not to afford such
applicants access to such information, the Trustee shall, upon the written
request of such applicants, mail to each Securityholder of Debt Securities
whose name and address appear in the information preserved at the time by the
Trustee in accordance with the provisions of subsection (a) of this Section 4.02
a copy of the form of proxy or other communication which is specified in such
request with reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless within five days after such tender, the
Trustee shall mail to such applicants and file with the Securities and Exchange
Commission, if permitted or required by applicable law, together with a copy of
the material to be mailed, a written statement to the effect that, in the
opinion of the Trustee, such mailing would be contrary to the best interests of
the holders of all Debt Securities, as the case may be, or would be in
violation of applicable law.  Such
written statement shall specify the basis of such opinion.  If said Commission, as permitted or required
by applicable law, after opportunity for a hearing upon the objections
specified in the written statement so filed, shall enter an order refusing to
sustain any of such objections or if, after the entry of an order sustaining
one or more of such objections, said Commission shall find, after notice and
opportunity for hearing, that all the objections so sustained have been met and
shall enter an order so declaring, the Trustee shall mail copies of such
material to all such Securityholders with reasonable promptness after the entry
of such order and the renewal of such tender; otherwise the Trustee shall be relieved
of any obligation or duty to such applicants respecting their application.


 


27

















 


(c)           Each and every holder of Debt
Securities, by receiving and holding the same, agrees with the Company and the
Trustee that none of the Company, the Trustee or any Paying Agent shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the holders of Debt Securities in accordance with the
provisions of subsection (b) of this Section 4.02, regardless of the
source from which such information was derived, and that the Trustee shall not
be held accountable by reason of mailing any material pursuant to a request
made under said subsection (b).


 


Section 4.03           Financial
and Other Information.


 


(a)           The Company shall deliver, by
hardcopy or electronic transmission, to each Securityholder (i) each
Report on Form 10-K and Form 10-Q, if any, prepared by the Company
and filed with the Securities and Exchange Commission in accordance with the
Exchange Act within 10 Business Days after the filing thereof or (ii) if
the Company is (a) not then subject to Section 13 or 15(d) of
the Exchange Act (a “Private Entity”) or (b) exempt from reporting
pursuant to Rule 12g3-2(b) thereunder, the information required by Rule 144A(d)(4) under
the Securities Act.  Notwithstanding the
foregoing, so long as a Holder of the Debt Securities is The Park Avenue Bank
or an entity that holds a pool of trust preferred securities and/or debt
securities as collateral for its securities or a trustee thereof, and the
Company is (i) a Private Entity that, on the date of original issuance of
the Debt Securities, is required to provide audited consolidated financial
statements to its primary regulatory authority, (ii) a Private Entity
that, on the date of original issuance of the Debt Securities, is not required
to provide audited consolidated financial statements to its primary regulatory
authority but subsequently becomes subject to the audited consolidated
financial statement reporting requirements of that regulatory authority or (iii) subject
to Section 13 or 15(d) of the Exchange Act on the date of original
issuance of the Debt Securities or becomes so subject after the date hereof but
subsequently becomes a Private Entity, then, within 90 days after the end of
each fiscal year, beginning with the fiscal year in which the Debt Securities
were originally issued if the Company was then subject to (x) Section 13
or 15(d) of the Exchange Act or (y) audited consolidated financial
statement reporting requirements of its primary regulatory authority or,
otherwise, the earliest fiscal year in which the Company becomes subject to (1) Section 13
or 15(d) of the Exchange Act or (2) the audited consolidated
financial statement reporting requirements of its primary regulatory authority,
the Company shall deliver, by hardcopy or electronic transmission, to each
Securityholder, unless otherwise provided pursuant to the preceding sentence, (A) a
copy of the Company’s audited consolidated financial statements (including
balance sheet and income statement) covering the related annual period and (B) the
report of the independent accountants with respect to such financial
statements.  In addition to the
foregoing, the Company shall deliver to each Securityholder within 30 days
after the end of the fiscal year of the Company, Form 1099 or such other
annual U.S. federal income tax information statement required by the Code
containing such information with regard to the Debt Securities held by such
holder as is required by the Code and the income tax regulations of the U.S.
Treasury thereunder.


 


(b)           If and so long as the Holder of the
Debt Securities is The Park Avenue Bank or an entity that holds a pool of trust
preferred securities and/or debt securities or a trustee thereof, the Company
will cause copies of its reports on Form FR
Y-9C to be delivered to such Holder promptly following their filing with
the Federal Reserve.


 


28

















 


(c)           The Company shall furnish to each
Securityholder and any designee of each Securityholder, a duly completed and
executed certificate in the form attached hereto as Exhibit C,
including the financial statements referenced in such Exhibit, to the extent
such financial statements are not otherwise provided pursuant to Section 4.03(a) above,
which certificate and financial statements shall be so furnished by the Company
not later than forty-five (45) days after the end of each of the first three
fiscal quarters of each fiscal year of the Company and not later than ninety
(90) days after the end of each fiscal year of the Company.


 


ARTICLE V

REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS


 


Section 5.01           Events
of Default.


 


The following events shall be “Events of Default” with
respect to Debt Securities:


 


(a)           the Company defaults in the payment
of any interest upon any Debt Security when it becomes due and payable, and
continuance of such default for a period of 30 days; for the avoidance of
doubt, an extension of any interest payment period by the Company in accordance
with Section 2.11 of this Indenture shall not constitute a default under
this clause 5.01(a); or


 


(b)           the Company defaults in the payment
of any interest upon any Debt Security, including any Additional Amounts in
respect thereof, following the nonpayment of any such interest for twenty or
more consecutive Interest Periods; or


 


(c)           the Company defaults in the payment
of all or any part of the principal of (or premium, if any, on) any Debt
Securities as and when the same shall become due and payable, whether at
maturity, upon redemption, by acceleration of maturity pursuant to Section 5.01
of this Indenture or otherwise; or


 


(d)           the Company defaults in the
performance of, or breaches, any of its covenants or agreements in Sections
3.06, 3.07, 3.08 or 3.09 of this Indenture (other than a covenant or agreement
a default in whose performance or whose breach is elsewhere in this Section specifically
dealt with), and continuance of such default or breach for a period of 90 days
after there has been given, by registered or certified mail, to the Company by
the Trustee or to the Company and the Trustee by the holders of not less than
25% in aggregate principal amount of the outstanding Debt 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


 


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


 


29

















 


(f)            the Company 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 the Company or 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; or


 


(g)           a court or administrative or
governmental agency or body shall enter a decree or order for the appointment
of a receiver of a Major Depository Institution Subsidiary or all or
substantially all of its property in any liquidation, insolvency or similar
proceeding with respect to such Major Depository Institution Subsidiary or all
or substantially all of its property; or


 


(h)           a Major Depository Institution
Subsidiary shall consent to the appointment of a receiver for it or all or
substantially all of its property in any liquidation, insolvency or similar
proceeding with respect to it or all or substantially all of its property; or


 


(i)            the Trust shall have voluntarily or
involuntarily liquidated, dissolved, wound-up its business or otherwise
terminated its existence except in connection with (1) the distribution of
the Debt Securities to holders of the Trust Securities in liquidation of their
interests in the Trust, (2) the redemption of all of the outstanding Trust
Securities or (3) mergers, consolidations or amalgamations, each as
permitted by the Declaration.


 


If an Event of Default specified under clause (b) of
this Section 5.01 occurs and is continuing with respect to the Debt
Securities, then, in each and every such case, either the Trustee or the
holders of not less than 25% in aggregate principal amount of the Debt
Securities then outstanding hereunder, by notice in writing to the Company (and
to the Trustee if given by Securityholders), may declare the entire principal
of the Debt Securities and any premium and interest accrued, but unpaid,
thereon to be due and payable immediately, and upon any such declaration the
same shall become immediately due and payable. 
If an Event of Default specified under clause (e), (f), (g), (h) or
(i) of this Section 5.01 occurs, then, in each and every such case,
the entire principal amount of the Debt Securities and any premium and interest
accrued, but unpaid, thereon shall ipso  facto become immediately
due and payable without further action.


 


The foregoing provisions, however, are subject to the
condition that if, at any time after the principal of the Debt Securities shall
have become due by acceleration, and before any judgment or decree for the
payment of the moneys due shall have been obtained or entered as hereinafter
provided, (i) the Company shall pay or shall deposit with the Trustee a
sum sufficient to pay all matured installments of interest upon all the Debt
Securities and all payments on the Debt Securities which shall have become due
otherwise than by acceleration (with interest upon all such payments and
Deferred Interest, to the extent permitted by law) and such amount as shall be
sufficient to cover reasonable compensation to the Trustee and each predecessor
Trustee, their respective agents, attorneys and counsel, and all other amounts
due to the Trustee pursuant to Section 6.06, if any, and (ii) all
Events of Default under this Indenture, other than the non-payment of the
payments in respect of Debt Securities which shall have become due by 


 


30

















 


acceleration, shall have
been cured, waived or otherwise remedied as provided herein, then, in each and
every such case, the holders of a majority in aggregate principal amount of the
Debt Securities then outstanding, by written notice to the Company and to the
Trustee, may waive all defaults and rescind and annul such acceleration and its
consequences, but no such waiver or rescission and annulment shall extend to or
shall affect any subsequent default or shall impair any right consequent
thereon; provided, however, that if the Debt Securities are held
by the Trust or a trustee of the Trust, such waiver or rescission and annulment
shall not be effective until the holders of a majority in aggregate liquidation
amount of the outstanding Capital Securities of the Trust shall have consented
to such waiver or rescission and annulment.


 


In case the Trustee shall have proceeded to enforce
any right under this Indenture and such proceedings shall have been
discontinued or abandoned because of such rescission or annulment or for any
other reason or shall have been determined adversely to the Trustee, then and
in every such case the Company, the Trustee and the holders of the Debt Securities
shall be restored respectively to their several positions and rights hereunder,
and all rights, remedies and powers of the Company, the Trustee and the holders
of the Debt Securities shall continue as though no such proceeding had been
taken.


 


Section 5.02           Payment
of Debt Securities on Default; Suit Therefor.


 


The Company covenants that upon the occurrence of an
Event of Default pursuant to clause (b) of Section 5.01 and upon
demand of the Trustee, the Company will pay to the Trustee, for the benefit of
the holders of the Debt Securities, the whole amount that then shall have
become due and payable on all Debt Securities, including Deferred Interest
accrued on the Debt Securities; and, in addition thereto, such further amount
as shall be sufficient to cover the costs and expenses of collection, including
a reasonable compensation to the Trustee, its agents, attorneys and counsel,
and any other amounts due to the Trustee under Section 6.06.  In case the Company shall fail forthwith to
pay such amounts upon such demand, the Trustee, in its own name and as trustee
of an express trust, shall be entitled and empowered to institute any actions
or proceedings at law or in equity for the collection of the sums so due and
unpaid, and may prosecute any such action or proceeding to judgment or final
decree, and may enforce any such judgment or final decree against the Company
or any other obligor on such Debt Securities and collect in the manner provided
by law out of the property of the Company or any other obligor on such Debt
Securities wherever situated the moneys adjudged or decreed to be payable.


 


In case there shall be pending proceedings for the
bankruptcy or for the reorganization of the Company or any other obligor on the
Debt Securities under Bankruptcy Law, or in case a receiver or trustee shall
have been appointed for the property of the Company or such other obligor, or
in the case of any other similar judicial proceedings relative to the Company
or other obligor upon the Debt Securities, or to the creditors or property of
the Company or such other obligor, the Trustee, irrespective of whether the
principal of the Debt Securities shall then be due and payable as therein
expressed or by acceleration or otherwise and irrespective of whether the
Trustee shall have made any demand pursuant to the provisions of this Section 5.02,
shall be entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Debt Securities and,
in case of any judicial proceedings, to file such proofs of claim and other
papers or documents as may be necessary or advisable in 


 


31

















 


order to have the claims
of the Trustee (including any claim for reasonable compensation to the Trustee
and each predecessor Trustee, and their respective agents, attorneys and
counsel, and for reimbursement of all other amounts due to the Trustee under Section 6.06)
and of the Securityholders allowed in such judicial proceedings relative to the
Company or any other obligor on the Debt Securities, or to the creditors or
property of the Company or such other obligor, unless prohibited by applicable
law and regulations, to vote on behalf of the holders of the Debt Securities in
any election of a trustee or a standby trustee in arrangement, reorganization,
liquidation or other bankruptcy or insolvency proceedings or Person performing
similar functions in comparable proceedings, and to collect and receive any
moneys or other property payable or deliverable on any such claims, and to
distribute the same after the deduction of its charges and expenses; and any
receiver, assignee or trustee in bankruptcy or reorganization is hereby
authorized by each of the Securityholders to make such payments to the Trustee,
and, in the event that the Trustee shall consent to the making of such payments
directly to the Securityholders, to pay to the Trustee such amounts as shall be
sufficient to cover reasonable compensation to the Trustee, each predecessor
Trustee and their respective agents, attorneys and counsel, and all other
amounts due to the Trustee under Section 6.06.


 


Nothing herein contained shall be construed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf
of any Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Debt Securities or the rights of any holder thereof
or to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding.


 


All rights of action and of asserting claims under
this Indenture, or under any of the Debt Securities, may be enforced by the
Trustee without the possession of any of the Debt Securities, or the production
thereof at any trial or other proceeding relative thereto, and any such suit or
proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall be for the
ratable benefit of the holders of the Debt Securities.


 


In any proceedings brought by the Trustee (and also
any proceedings involving the interpretation of any provision of this Indenture
to which the Trustee shall be a party), the Trustee shall be held to represent
all the holders of the Debt Securities, and it shall not be necessary to make
any holders of the Debt Securities parties to any such proceedings.


 


Section 5.03           Application
of Moneys Collected by Trustee.


 


Any moneys collected by the Trustee shall be applied
in the following order, at the date or dates fixed by the Trustee for the
distribution of such moneys, upon presentation of the several Debt Securities
in respect of which moneys have been collected, and stamping thereon the
payment, if only partially paid, and upon surrender thereof if fully paid:


 


First: To the payment of costs and expenses incurred
by, and reasonable fees of, the Trustee, its agents, attorneys and counsel, and
of all other amounts due to the Trustee under Section 6.06;


 


32
















 


Second: To the payment of all Senior Indebtedness of
the Company if and to the extent required by Article XV;


 


Third:  To the
payment of the amounts then due and unpaid upon Debt Securities, in respect of
which or for the benefit of which money has been collected, ratably, without
preference or priority of any kind, according to the amounts due upon such Debt
Securities; and


 


Fourth: The balance, if any, to the Company.


 


Section 5.04           Proceedings by Securityholders.


 


No holder of any Debt Security shall have any right to
institute any suit, action or proceeding for any remedy hereunder, unless such
holder previously shall have given to the Trustee written notice of an Event of
Default with respect to the Debt Securities and unless the holders of not less
than 25% in aggregate principal amount of the Debt Securities then outstanding
shall have given the Trustee a written request to institute such action, suit
or proceeding and shall have offered to the Trustee such reasonable indemnity
as it may require against the costs, expenses and liabilities to be incurred
thereby, and the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity shall have failed to institute any such action, suit or
proceeding; provided, that no holder of Debt Securities shall have any
right to prejudice the rights of any other holder of Debt Securities, obtain
priority or preference over any other such holder or enforce any right under
this Indenture except in the manner herein provided and for the equal, ratable
and common benefit of all holders of Debt Securities.


 


Notwithstanding any other provisions in this
Indenture, the right of any holder of any Debt Security to receive payment of
the principal of and premium, if any, and interest on such Debt Security when
due, or to institute suit for the enforcement of any such payment, shall not be
impaired or affected without the consent of such holder.  For the protection and enforcement of the
provisions of this Section, each and every Securityholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.


 


Section 5.05           Proceedings by Trustee.


 


In case of an Event of Default, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either by suit in
equity or by action at law or by proceeding in bankruptcy or otherwise, whether
for the specific enforcement of any covenant or agreement contained in this
Indenture or in aid of the exercise of any power granted in this Indenture, or
to enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law.


 


Section 5.06           Remedies Cumulative and Continuing.


 


Except as otherwise provided in Section 2.06, all
powers and remedies given by this Article V to the Trustee or to the
Securityholders shall, to the extent permitted by law, be deemed cumulative and
not exclusive of any other powers and remedies available to the Trustee or the
holders of the Debt Securities, by judicial proceedings or otherwise, to
enforce the performance or observance of the covenants and agreements contained
in this Indenture or 


 


33

















 


otherwise established
with respect to the Debt Securities, and no delay or omission of the Trustee or
of any holder of any of the Debt Securities to exercise any right or power
accruing upon any Event of Default occurring and continuing as aforesaid shall
impair any such right or power, or shall be construed to be a waiver of any
such default or an acquiescence therein; and, subject to the provisions of Section 5.04,
every power and remedy given by this Article V or by law to the Trustee or
to the Securityholders may be exercised from time to time, and as often as
shall be deemed expedient, by the Trustee or by the Securityholders.


 


Section 5.07           Direction of Proceedings and Waiver of
Defaults by Majority of Securityholders.


 


The holders of a majority in aggregate principal
amount of the Debt Securities affected at the time outstanding and, if the Debt
Securities are held by the Trust or a trustee of the Trust, the holders of a
majority in aggregate liquidation amount of the outstanding Capital Securities
of the Trust shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee with respect to such
Debt Securities; provided, however, that if the Debt Securities
are held by the Trust or a trustee of the Trust, such time, method and place or
such exercise, as the case may be, may not be so directed until the holders of
a majority in aggregate liquidation amount of the outstanding Capital
Securities of the Trust shall have directed such time, method and place or such
exercise, as the case may be; provided, further, that (subject to
the provisions of Section 6.01) the Trustee shall have the right to
decline to follow any such direction if the Trustee shall determine that the
action so directed would be unjustly prejudicial to the holders not taking part
in such direction or if the Trustee being advised by counsel determines that
the action or proceeding so directed may not lawfully be taken or if a
Responsible Officer of the Trustee shall determine that the action or
proceedings so directed would involve the Trustee in personal liability.  Prior to any declaration of acceleration, or ipso
facto acceleration, of the maturity of the Debt Securities, the holders
of a majority in aggregate principal amount of the Debt Securities at the time
outstanding may on behalf of the holders of all of the Debt Securities waive
(or modify any previously granted waiver of) any past Default or Event of Default
and its consequences, except a default (a) in the payment of principal of
or premium, if any, or interest on any of the Debt Securities, (b) in
respect of covenants or provisions hereof which cannot be modified or amended
without the consent of the holder of each Debt Security affected, or (c) 
in respect of the covenants contained in Section 3.09; provided, however,
that if the Debt Securities are held by the Trust or a trustee of the Trust,
such waiver or modification to such waiver shall not be effective until the
holders of a majority in aggregate liquidation amount of the outstanding
Capital Securities of the Trust shall have consented to such waiver or
modification to such waiver; provided, further, that if the
consent of the holder of each outstanding Debt Security is required, such
waiver or modification to such waiver shall not be effective until each holder
of the outstanding Capital Securities of the Trust shall have consented to such
waiver or modification to such waiver. 
Upon any such waiver or modification to such waiver, the Default or
Event of Default covered thereby shall be deemed to be cured for all purposes
of this Indenture and the Company, the Trustee and the holders of the Debt
Securities shall be restored to their former positions and rights hereunder,
respectively; but no such waiver or modification to such waiver shall extend to
any subsequent or other Default or Event of Default or impair any right
consequent thereon.  Whenever any Default
or Event of Default hereunder shall have been 


 


34

















 


waived as permitted by
this Section, said Default or Event of Default shall for all purposes of the
Debt Securities and this Indenture be deemed to have been cured and to be not
continuing.


 


Section 5.08           Notice of Defaults.


 


The Trustee shall, within 90 days after a Responsible
Officer of the Trustee shall have actual knowledge or received written notice
of the occurrence of a default with respect to the Debt Securities, mail to all
Securityholders, as the names and addresses of such holders appear upon the
Debt Security Register, notice of all defaults with respect to the Debt
Securities known to the Trustee, unless such defaults shall have been cured
before the giving of such notice (the term “default” for the purpose of this Section is
hereby defined to be any event specified in Section 5.01, not including
periods of grace, if any, provided for therein); provided, that,
except in the case of default in the payment of the principal of or premium, if
any, or interest on any of the Debt Securities, the Trustee shall be protected
in withholding such notice if and so long as a Responsible Officer of the
Trustee in good faith determines that the withholding of such notice is in the
interests of the Securityholders.


 


Section 5.09           Undertaking to Pay Costs.


 


All parties to this Indenture agree, and each holder
of any Debt Security by such holder’s acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys’ fees and expenses, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this Section shall not
apply to any suit instituted by the Trustee, to any suit instituted by any
Securityholder, or group of Securityholders, holding in the aggregate more than
10% in principal amount of the outstanding Debt Securities (or, if such Debt
Securities are held by the Trust or a trustee of the Trust, more than 10% in
liquidation amount of the outstanding Capital Securities), to any suit
instituted by any Securityholder for the enforcement of the payment of the
principal of or premium, if any, or interest on any Debt Security against the
Company on or after the same shall have become due and payable or to any suit
instituted in accordance with Section 14.12.


 


ARTICLE VI

CONCERNING THE TRUSTEE


 


Section 6.01           Duties and Responsibilities of Trustee.


 


With respect to the holders of Debt Securities issued
hereunder, the Trustee, prior to the occurrence of an Event of Default with
respect to the Debt Securities and after the curing or waiving of all Events of
Default which may have occurred, with respect to the Debt Securities,
undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture.  In case an
Event of Default with respect to the Debt Securities has occurred (which has
not been cured or waived), the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent 


 


35

















 


person would exercise or
use under the circumstances in the conduct of such person’s own affairs.


 


No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct or bad faith, except
that:


 


(a)           prior to the occurrence
of an Event of Default and after the curing or waiving of all Events of Default
which may have occurred:


 


(i)            the
duties and obligations of the Trustee with respect to the Debt Securities shall
be determined solely by the express provisions of this Indenture, and the
Trustee shall not be liable except for the performance of such duties and
obligations with respect to the Debt Securities as are specifically set forth
in this Indenture, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and


 


(ii)           in
the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but, in the case
of any such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not they conform on
their face to the requirements of this Indenture;


 


(b)           the Trustee shall not
be liable for any error of judgment made in good faith by a Responsible Officer
or Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;


 


(c)           the 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 Securityholders pursuant to Section 5.07,
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture; and


 


(d)           the Trustee shall not
be charged with knowledge of any Default or Event of Default with respect to
the Debt Securities unless either (1) a Responsible Officer shall have
actual knowledge of such Default or Event of Default or (2) written notice
of such Default or Event of Default shall have been given to the Trustee by the
Company or any other obligor on the Debt Securities or by any holder of the
Debt Securities, except that the Trustee shall be deemed to have knowledge of
any Event of Default pursuant to Sections 5.01(a), 5.01(b) or 5.01(c) hereof
(other than an Event of Default resulting from the default in the payment of
Additional Amounts if the Trustee does not have actual knowledge or written
notice that such payment is due and payable) .


 


None of the provisions contained in this Indenture
shall require the Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers.


 


36

















 


Section 6.02           Reliance on Documents, Opinions, etc.


 


Except as otherwise
provided in Section 6.01:


 


(a)           the Trustee may
conclusively rely and shall be fully protected in acting or refraining from
acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, bond, note, debenture or other paper
or document believed by it in good faith to be genuine and to have been signed
or presented by the proper party or parties;


 


(b)           any request, direction,
order or demand of the Company mentioned herein shall be sufficiently evidenced
by an Officers’ Certificate (unless other evidence in respect thereof be herein
specifically prescribed); and any Board Resolution may be evidenced to the
Trustee by a copy thereof certified by the Secretary or an Assistant Secretary
of the Company;


 


(c)           the Trustee may consult
with counsel of its selection and any advice or Opinion of 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 accordance with such
advice or Opinion of Counsel;


 


(d)           the Trustee shall be
under no obligation to exercise any of the rights or powers vested in it by
this Indenture at the request, order or direction of any of the
Securityholders, pursuant to the provisions of this Indenture, unless such
Securityholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby;


 


(e)           the Trustee shall not
be liable for any action taken or omitted by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Indenture; nothing contained herein shall, however,
relieve the Trustee of the obligation, upon the occurrence of an Event of
Default with respect to the Debt Securities (which has not been cured or
waived) to exercise with respect to the Debt Securities such of the rights and
powers vested in it by this Indenture, and to 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 such person’s own affairs;


 


(f)            the 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, coupon or other paper or
document, unless requested in writing to do so by the holders of a majority in
aggregate principal amount of the outstanding Debt Securities affected thereby;
provided, however, that if the payment within a reasonable time
to the Trustee of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms
of this Indenture, the Trustee may require reasonable indemnity against such
expense or liability as a condition to so proceeding; and


 


(g)           the Trustee may execute
any of the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents (including any Authenticating Agent) or
attorneys, and the Trustee shall not be responsible for any misconduct or
negligence on the part of any such agent or attorney appointed by it with due
care.


 


37

















 


Section 6.03           No Responsibility for Recitals, etc.


 


The recitals contained herein and in the Debt
Securities (except in the certificate of authentication of the Trustee or the
Authenticating Agent) shall be taken as the statements of the Company, and the
Trustee and the Authenticating Agent assume no responsibility for the correctness
of the same.  The Trustee and the
Authenticating Agent make no representations as to the validity or sufficiency
of this Indenture or of the Debt Securities. 
The Trustee and the Authenticating Agent shall not be accountable for
the use or application by the Company of any Debt Securities or the proceeds of
any Debt Securities authenticated and delivered by the Trustee or the
Authenticating Agent in conformity with the provisions of this Indenture.


 


Section 6.04           Trustee, Authenticating Agent, Paying
Agents, Transfer Agents or Registrar May Own Debt Securities.


 


The Trustee, any Authenticating Agent, any Paying
Agent, any transfer agent or any Debt Security registrar, in its individual or
any other capacity, may become the owner or pledgee of Debt Securities with the
same rights it would have if it were not Trustee, Authenticating Agent, Paying
Agent, transfer agent or Debt Security registrar.


 


Section 6.05           Moneys to be Held in Trust.


 


Subject to the provisions of Section 12.04, all
moneys received by the Trustee or any Paying Agent shall, until used or applied
as herein provided, be held in trust for the purpose for which they were
received, but need not be segregated from other funds except to the extent
required by law.  The Trustee and any
Paying Agent shall be under no liability for interest on any money received by
it hereunder except as otherwise agreed in writing with the Company.  So long as no Event of Default shall have
occurred and be continuing, all interest allowed on any such moneys, if any,
shall be paid from time to time to the Company upon the written order of the
Company, signed by the Chairman of the Board of Directors, the President, the
Chief Operating Officer, a Vice President, the Treasurer or an Assistant
Treasurer of the Company.


 


Section 6.06           Compensation and Expenses of Trustee.


 


The Company covenants and agrees to pay to the Trustee
from time to time, and the Trustee shall be entitled to, such compensation as
shall be agreed to in writing between the Company and the Trustee (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust), and the Company will pay or reimburse the Trustee
upon its written request for all documented reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any of the
provisions of this Indenture (including the reasonable compensation and the
reasonable expenses and disbursements of its counsel and of all Persons not
regularly in its employ) except any such expense, disbursement or advance that
arises from its negligence, willful misconduct or bad faith.  The Company also covenants to indemnify each
of the Trustee (including in its individual capacity) and any predecessor Trustee
(and its officers, agents, directors and employees) for, and to hold it
harmless against, any and all loss, damage, claim, liability or expense
including taxes (other than taxes based on the income of the Trustee), except
to the extent such loss, damage, claim, liability or expense results from the
negligence, willful misconduct or bad faith of such 


 


38

















 


indemnitee, arising out
of or in connection with the acceptance or administration of this trust,
including the costs and expenses of defending itself against any claim or
liability in the premises.  The
obligations of the Company under this Section to compensate and indemnify
the Trustee and to pay or reimburse the Trustee for documented expenses,
disbursements and advances shall constitute additional indebtedness
hereunder.  Such additional indebtedness
shall be secured by a lien prior to that of the Debt Securities upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the benefit of the holders of particular Debt Securities.


 


Without prejudice to any other rights available to the
Trustee under applicable law, when the Trustee incurs expenses or renders
services in connection with an Event of Default specified in clause (e), (f),
(g), (h) or (i) of Section 5.01, the expenses (including the
reasonable charges and expenses of its counsel) and the compensation for the
services are intended to constitute expenses of administration under any
applicable federal or state bankruptcy, insolvency or other similar law.


 


The provisions of this Section shall survive the
resignation or removal of the Trustee and the defeasance or other termination
of this Indenture.


 


Notwithstanding anything in this Indenture or any Debt
Security to the contrary, the Trustee shall have no obligation whatsoever to
advance funds to pay any principal of or interest on or other amounts with
respect to the Debt Securities or otherwise advance funds to or on behalf of
the Company.


 


Section 6.07           Officers’ Certificate as Evidence.


 


Except as otherwise provided in Sections 6.01 and
6.02, whenever in the administration of the provisions of this Indenture the
Trustee shall deem it necessary or desirable that a matter be proved or
established prior to taking or omitting any action hereunder, such matter
(unless other evidence in respect thereof be herein specifically prescribed)
may, in the absence of negligence, willful misconduct or bad faith on the part
of the Trustee, be deemed to be conclusively proved and established by an
Officers’ Certificate delivered to the Trustee, and such certificate, in the
absence of negligence, willful misconduct or bad faith on the part of the
Trustee, shall be full warrant to the Trustee for any action taken or omitted
by it under the provisions of this Indenture upon the faith thereof.


 


Section 6.08           Eligibility of Trustee.


 


The Trustee hereunder shall at all times be a U.S.
Person that is a banking corporation or national association organized and
doing business under the laws of the United States of America or any state
thereof or of the District of Columbia and authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least fifty million U.S. dollars ($50,000,000) and subject to supervision or
examination by federal, state, or District of Columbia authority.  If such corporation or national association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section the combined capital and surplus of 


 


39

















 


such corporation or
national association shall be deemed to be its combined capital and surplus as
set forth in its most recent records of condition so published.


 


The Company may not, nor may any Person directly or
indirectly controlling, controlled by, or under common control with the
Company, serve as Trustee, notwithstanding that such corporation or national
association shall be otherwise eligible and qualified under this Article.


 


In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 6.09.


 


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


 


Section 6.09           Resignation or Removal of Trustee.


 


(a)           The Trustee, or any
trustee or trustees hereafter appointed, may at any time resign by giving
written notice of such resignation to the Company and by mailing notice
thereof, at the Company’s expense, to the holders of the Debt Securities at
their addresses as they shall appear on the Debt Security Register.  Upon receiving such notice of resignation,
the Company shall promptly appoint a successor trustee or trustees by written
instrument, in duplicate, executed by order of its Board of Directors, one copy
of which instrument shall be delivered to the resigning Trustee and one copy to
the successor Trustee.  If no successor
Trustee shall have been so appointed and have accepted appointment within 30
days after the mailing of such notice of resignation to the affected
Securityholders, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee, or any Securityholder
who has been a bona fide holder of a Debt Security or Debt Securities for at
least six months may, subject to the provisions of Section 5.09, on behalf
of himself or herself and all others similarly situated, petition any such
court for the appointment of a successor Trustee.  Such court may thereupon, after such notice,
if any, as it may deem proper and prescribe, appoint a successor Trustee.


 


(b)                                 In
case at any time any of the following shall occur:


 


(i)            the
Trustee shall fail to comply with the provisions of the last paragraph of Section 6.08
after written request therefor by the Company or by any Securityholder who has
been a bona fide holder of a Debt Security or Debt Securities for at least six
months;


 


(ii)           the
Trustee shall cease to be eligible in accordance with the provisions of Section 6.08
and shall fail to resign after written request therefor by the Company or by
any such Securityholder; or


 


(iii)          the Trustee shall become incapable of acting,
or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or 


 


40

















 


any
public officer shall take charge or control of the Trustee or of its property
or affairs for the purpose of rehabilitation, conservation or liquidation,


 


then, in any such case, the Company may remove the
Trustee and appoint a successor Trustee by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which instrument shall
be delivered to the Trustee so removed and one copy to the successor Trustee, or,
subject to the provisions of Section 5.09, if no successor Trustee shall
have been so appointed and have accepted appointment within 30 days of the
occurrence of any of (i), (ii) or (iii) above, any Securityholder who
has been a bona fide holder of a Debt Security or Debt Securities for at least
six months may, on behalf of himself or herself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.  Such court may thereupon, after such notice,
if any, as it may deem proper and prescribe, remove the Trustee and appoint a
successor Trustee.


 


(c)           Upon prior written
notice to the Company and the Trustee, the holders of a majority in aggregate
principal amount of the Debt Securities at the time outstanding may at any time
remove the Trustee and nominate a successor Trustee, which shall be deemed
appointed as successor Trustee unless within ten Business Days after such
nomination the Company objects thereto, in which case or in the case of a
failure by such holders to nominate a successor Trustee, the Trustee so removed
or any Securityholder, upon the terms and conditions and otherwise as in
subsection (a) of this Section, may petition any court of competent
jurisdiction for an appointment of a successor.


 


(d)           Any resignation or
removal of the Trustee and appointment of a successor Trustee pursuant to any
of the provisions of this Section shall become effective upon acceptance
of appointment by the successor Trustee as provided in Section 6.10.


 


Section 6.10           Acceptance by Successor Trustee.


 


Any successor Trustee appointed as provided in Section 6.09
shall execute, acknowledge and deliver to the Company and to its predecessor
Trustee an indenture supplemental hereto which shall contain such provisions as
shall be deemed necessary or desirable to confirm that all of the rights,
powers, trusts and duties of the retiring Trustee shall be vested in the
successor Trustee, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers,
duties and obligations with respect to the Debt Securities of its predecessor
hereunder, with like effect as if originally named as Trustee herein; but,
nevertheless, on the written request of the Company or of the successor
Trustee, the Trustee ceasing to act shall, upon payment of the amounts then due
it pursuant to the provisions of Section 6.06, execute and deliver an
instrument transferring to such successor Trustee all the rights and powers of
the Trustee so ceasing to act and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder.  Upon request of any such
successor Trustee, the Company shall execute any and all instruments in writing
for more fully and certainly vesting in and confirming to such successor
Trustee all such rights and powers.  Any
Trustee ceasing to act shall, nevertheless, retain a lien upon all property or
funds held or collected by such Trustee to secure any amounts then due it
pursuant to the provisions of Section 6.06.


 


41
















 


No successor Trustee shall accept appointment as
provided in this Section unless at the time of such acceptance such
successor Trustee shall be eligible and qualified under the provisions of Section 6.08.


 


In no event shall a retiring Trustee be liable for the
acts or omissions of any successor Trustee hereunder.


 


Upon acceptance of appointment by a successor Trustee
as provided in this Section, the Company shall mail notice of the succession of
such Trustee hereunder to the holders of Debt Securities at their addresses as
they shall appear on the Debt Security Register.  If the Company fails to mail such notice
within ten Business Days after the acceptance of appointment by the successor
Trustee, the successor Trustee shall cause such notice to be mailed at the
expense of the Company.


 


Section 6.11           Succession by Merger, etc.


 


Any corporation into which the Trustee may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder without the execution or filing of any paper or any further act on the
part of any of the parties hereto, provided, that such corporation shall
be otherwise eligible and qualified under this Article.


 


In case at the time such successor to the Trustee
shall succeed to the trusts created by this Indenture any of the Debt Securities
shall have been authenticated but not delivered, any such successor to the
Trustee may adopt the certificate of authentication of any predecessor Trustee,
and deliver such Debt Securities so authenticated; and in case at that time any
of the Debt Securities shall not have been authenticated, any successor to the
Trustee may authenticate such Debt Securities either in the name of any
predecessor hereunder or in the name of the successor Trustee; and in all such
cases such certificates shall have the full force which it is anywhere in the
Debt Securities or in this Indenture provided that the certificate of the
Trustee shall have; provided, however, that the right to adopt
the certificate of authentication of any predecessor Trustee or authenticate
Debt Securities in the name of any predecessor Trustee shall apply only to its
successor or successors by merger, conversion or consolidation.


 


Section 6.12           Authenticating Agents.


 


There may be one or more Authenticating Agents
appointed by the Trustee upon the request of the Company with power to act on
its behalf and subject to its direction in the authentication and delivery of
Debt Securities issued upon exchange or registration of transfer thereof as
fully to all intents and purposes as though any such Authenticating Agent had
been expressly authorized to authenticate and deliver Debt Securities; provided,
however, that the Trustee shall have no liability to the Company for any
acts or omissions of the Authenticating Agent with respect to the
authentication and delivery of Debt Securities. 
Any such Authenticating Agent shall at all times be a corporation
organized and doing business under the laws of the United States or of any
state thereof or of the District of Columbia authorized under


 


42

















 


such laws to act as
Authenticating Agent, having a combined capital and surplus of at least
$50,000,000 and being 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 the requirements of such authority, then for the purposes of this Section 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
an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect herein specified in this Section.


 


Any corporation into which any Authenticating Agent
may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, consolidation or conversion to which any
Authenticating Agent shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of any Authenticating Agent,
shall be the successor of such Authenticating Agent hereunder, if such
successor corporation is otherwise eligible under this Section without the
execution or filing of any paper or any further act on the part of the parties
hereto or such Authenticating Agent.


 


Any Authenticating Agent may at any time resign by
giving written notice of resignation to the Trustee and to the Company.  The Trustee may at any time terminate the
agency of any Authenticating Agent with respect to the Debt Securities by
giving written notice of termination to such Authenticating Agent and to the
Company.  Upon receiving such a notice of
resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible under this Section, the Trustee
may, and upon the request of the Company shall, promptly appoint a successor
Authenticating Agent eligible under this Section, shall give written notice of
such appointment to the Company and shall mail notice of such appointment to
all holders of Debt Securities as the names and addresses of such holders
appear on the Debt Security Register. 
Any successor Authenticating Agent, upon acceptance of its appointment
hereunder, shall become vested with all rights, powers, duties and
responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent herein.


 


The Company agrees to pay to any Authenticating Agent
from time to time reasonable compensation for its services.  Any Authenticating Agent shall have no
responsibility or liability for any action taken by it as such in accordance
with the directions of the Trustee.


 


ARTICLE VII

CONCERNING THE SECURITYHOLDERS


 


Section 7.01           Action by Securityholders.


 


Whenever in this Indenture it is provided that the
holders of a specified percentage in aggregate principal amount of the Debt
Securities or aggregate liquidation amount of the Capital Securities may take
any action (including the making of any demand or request, the giving of any
notice, consent or waiver or the taking of any other action), the fact that at
the time of taking any such action the holders of such specified percentage
have joined therein may be evidenced (a) by any instrument or any number
of instruments of similar tenor executed by such Securityholders or holders of
Capital Securities, as the case may be, in person or by agent or proxy
appointed in writing, or (b) by the record of such holders of Debt
Securities voting in


 


43

















 


favor thereof at any
meeting of such Securityholders duly called and held in accordance with the
provisions of Article VIII or of such holders of Capital Securities duly
called and held in accordance with the provisions of the Declaration, or (c) by
a combination of such instrument or instruments and any such record of such a
meeting of such Securityholders or holders of Capital Securities, as the case
may be, or (d) by any other method the Trustee deems satisfactory.


 


If the Company shall solicit from the Securityholders
any request, demand, authorization, direction, notice, consent, waiver or other
action or revocation of the same, the Company may, at its option, as evidenced
by an Officers’ Certificate, fix in advance a record date for such Debt
Securities for the determination of Securityholders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other
action or revocation of the same, but the Company shall have no obligation to
do so.  If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, waiver or
other action or revocation of the same may be given before or after the record
date, but only the Securityholders of record at the close of business on the
record date shall be deemed to be Securityholders for the purposes of
determining whether Securityholders of the requisite proportion of outstanding
Debt Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other action or revocation
of the same, and for that purpose the outstanding Debt Securities shall be
computed as of the record date; provided, however, that no such
authorization, agreement or consent by such Securityholders on the record date
shall be deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than six months after the record date.


 


Section 7.02           Proof of Execution by
Securityholders.


 


Subject to the provisions of Sections 6.01, 6.02 and
8.05, proof of the execution of any instrument by a Securityholder or such
Securityholder’s agent or proxy shall be sufficient if made in accordance with
such reasonable rules and regulations as may be prescribed by the Trustee
or in such manner as shall be satisfactory to the Trustee.  The ownership of Debt Securities shall be
proved by the Debt Security Register or by a certificate of the Debt Security
registrar.  The Trustee may require such
additional proof of any matter referred to in this Section as it shall
deem necessary.


 


The record of any Securityholders’ meeting shall be
proved in the manner provided in Section 8.06.


 


Section 7.03           Who Are Deemed Absolute Owners.


 


Prior to due presentment for registration of transfer
of any Debt Security, the Company, the Trustee, any Authenticating Agent, any
Paying Agent, any transfer agent and any Debt Security registrar may deem the
Person in whose name such Debt Security shall be registered upon the Debt
Security Register to be, and may treat such Person as, the absolute owner of
such Debt Security (whether or not such Debt Security shall be overdue) for the
purpose of receiving payment of or on account of the principal of and premium,
if any, and interest on such Debt Security and for all other purposes; and none
of the Company, the Trustee, any Authenticating Agent, any Paying Agent, any
transfer agent or any Debt Security registrar shall be affected by any notice to
the contrary.  All such payments so made
to any holder for the


 


44

















 


time being or upon such
holder’s order shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for moneys payable upon any
such Debt Security.


 


Section 7.04           Debt Securities Owned by Company
Deemed Not Outstanding.


 


In determining whether the holders of the requisite
aggregate principal amount of Debt Securities have concurred in any request,
demand, authorization, direction, notice, consent or waiver under this
Indenture, Debt Securities which are owned by the Company or any other obligor
on the Debt Securities or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company
(other than the Trust) or any other obligor on the Debt Securities shall be
disregarded and deemed not to be outstanding for the purpose of any such
determination, provided, that for the purposes of determining whether
the Trustee shall be protected in relying on any such request, demand,
authorization, direction, notice, consent or waiver, only Debt Securities which
a Responsible Officer of the Trustee actually knows are so owned shall be so
disregarded.  Debt Securities so owned
which have been pledged in good faith may be regarded as outstanding for the
purposes of this Section if the pledgee shall establish to the
satisfaction of the Trustee the pledgee’s right to vote such Debt Securities
and that the pledgee is not the Company or any such other obligor or Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company or any such other obligor.  In the case of a dispute as to such right,
any decision by the Trustee taken upon the advice of counsel shall be full
protection to the Trustee.


 


Section 7.05           Revocation of Consents; Future
Holders Bound.


 


At any time prior to (but not after) the evidencing to
the Trustee, as provided in Section 7.01, of the taking of any action by
the holders of the percentage in aggregate principal amount of the Debt
Securities specified in this Indenture in connection with such action, any
holder (in cases where no record date has been set pursuant to Section 7.01)
or any holder as of an applicable record date (in cases where a record date has
been set pursuant to Section 7.01) of a Debt Security (or any Debt
Security issued in whole or in part in exchange or substitution therefor) the
serial number of which is shown by the evidence to be included in the Debt
Securities the holders of which have consented to such action may, by filing
written notice with the Trustee at the Principal Office of the Trustee and upon
proof of holding as provided in Section 7.02, revoke such action so far as
concerns such Debt Security (or so far as concerns the principal amount
represented by any exchanged or substituted Debt Security).  Except as aforesaid any such action taken by
the holder of any Debt Security shall be conclusive and binding upon such
holder and upon all future holders and owners of such Debt Security, and of any
Debt Security issued in exchange or substitution therefor or on registration of
transfer thereof, irrespective of whether or not any notation in regard thereto
is made upon such Debt Security or any Debt Security issued in exchange or
substitution therefor.


 


45

















 


ARTICLE VIII

SECURITYHOLDERS’ MEETINGS


 


Section 8.01           Purposes of Meetings.


 


A meeting of Securityholders may be called at any time
and from time to time pursuant to the provisions of this Article VIII for
any of the following purposes:


 


(a)           to give any notice to the Company or
to the Trustee, or to give any directions to the Trustee, or to consent to the
waiving of any default hereunder and its consequences, or to take any other
action authorized to be taken by Securityholders pursuant to any of the
provisions of Article V;


 


(b)           to remove the Trustee and nominate a
successor trustee pursuant to the provisions of Article VI;


 


(c)           to consent to the execution of an
indenture or indentures supplemental hereto pursuant to the provisions of Section 9.02;
or


 


(d)           to take any other action authorized
to be taken by or on behalf of the holders of any specified aggregate principal
amount of such Debt Securities under any other provision of this Indenture or
under applicable law.


 


Section 8.02           Call of Meetings by Trustee.


 


The Trustee may at any time call a meeting of
Securityholders to take any action specified in Section 8.01, to be held
at such time and at such place in the City of New York, the Borough of
Manhattan, or Wilmington, Delaware, as the Trustee shall determine.  Notice of every meeting of the
Securityholders, setting forth the time and the place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be mailed
to holders of Debt Securities affected at their addresses as they shall appear
on the Debt Securities Register.  Such
notice shall be mailed not less than 20 nor more than 180 days prior to the
date fixed for the meeting.


 


Section 8.03           Call of Meetings by Company or
Securityholders.


 


In case at any time the Company pursuant to a Board
Resolution, or the holders of at least 10% in aggregate principal amount of the
Debt Securities, as the case may be, then outstanding, shall have requested the
Trustee to call a meeting of Securityholders, by written request setting forth
in reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have mailed the notice of such meeting within 20 days after
receipt of such request, then the Company or such Securityholders may determine
the time and the place in Wilmington, Delaware or Charleston, South Carolina for such meeting and may call such
meeting to take any action authorized in Section 8.01, by mailing notice
thereof as provided in Section 8.02.


 


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Section 8.04           Qualifications for Voting.


 


To be entitled to vote at any meeting of
Securityholders, a Person shall be (a) a holder of one or more Debt
Securities or (b) a Person appointed by an instrument in writing as proxy
by a holder of one or more Debt Securities. 
The only Persons who shall be entitled to be present or to speak at any
meeting of Securityholders shall be the Persons entitled to vote at such
meeting and their counsel and any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.


 


Section 8.05           Regulations.


 


Notwithstanding any other provisions of this Indenture,
the Trustee may make such reasonable regulations as it may deem advisable for
any meeting of Securityholders, in regard to proof of the holding of Debt
Securities and of the appointment of proxies, and in regard to the appointment
and duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall deem appropriate.


 


The Trustee shall, by an instrument in writing,
appoint a temporary chairman of the meeting, unless the meeting shall have been
called by the Company or by Securityholders as provided in Section 8.03,
in which case the Company or the Securityholders calling the meeting, as the
case may be, shall in like manner appoint a temporary chairman. A permanent
chairman and a permanent secretary of the meeting shall be elected by majority
vote at the meeting.


 


Subject to the provisions of Section 7.04, at any
meeting each holder of Debt Securities with respect to which such meeting is
being held or proxy therefor shall be entitled to one vote for each $1,000
principal amount of Debt Securities held or represented by such holder; provided,
however, that no vote shall be cast or counted at any meeting in respect
of any Debt Security challenged as not outstanding and ruled by the chairman of
the meeting to be not outstanding.  The
chairman of the meeting shall have no right to vote other than by virtue of
Debt Securities held by such chairman or instruments in writing as aforesaid
duly designating such chairman as the Person to vote on behalf of other
Securityholders.  Any meeting of
Securityholders duly called pursuant to the provisions of Section 8.02 or
8.03 may be adjourned from time to time by a majority of those present, whether
or not constituting a quorum, and the meeting may be held as so adjourned
without further notice.


 


Section 8.06           Voting.


 


The vote upon any resolution submitted to any meeting
of holders of Debt Securities with respect to which such meeting is being held
shall be by written ballots on which shall be subscribed the signatures of such
holders or of their representatives by proxy and the serial number or numbers
of the Debt Securities held or represented by them.  The permanent chairman of the meeting shall
appoint two inspectors of votes who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with the secretary of
the meeting their verified written reports in triplicate of all votes cast at
the meeting. A record in duplicate of the proceedings of each meeting of
Securityholders shall be prepared by the secretary of the meeting and there
shall be attached to said record the original reports of the


 


47

















 


inspectors of votes on
any vote by ballot taken thereat and affidavits by one or more Persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was mailed as provided in Section 8.02.  The record shall show the serial numbers of
the Debt Securities voting in favor of or against any resolution. The record
shall be signed and verified by the affidavits of the permanent chairman and
secretary of the meeting and one of the duplicates shall be delivered to the
Company and the other to the Trustee to be preserved by the Trustee, the latter
to have attached thereto the ballots voted at the meeting.


 


Any record so signed and verified shall be conclusive
evidence of the matters therein stated.


 


Section 8.07           Quorum; Actions.


 


The Persons entitled to vote a majority in aggregate
principal amount of the Debt Securities then outstanding shall constitute a
quorum for a meeting of Securityholders; provided, however, that
if any action is to be taken at such meeting with respect to a consent, waiver,
request, demand, notice, authorization, direction or other action which may be
given by the holders of not less than a specified percentage in aggregate
principal amount of the Debt Securities then outstanding, the Persons holding
or representing such specified percentage in aggregate principal amount of the
Debt Securities then outstanding will constitute a quorum.  In the absence of a quorum within 30 minutes
of the time appointed for any such meeting, the meeting shall, if convened at
the request of Securityholders, be dissolved. 
In any other case, the meeting may be adjourned for a period of not less
than 10 days as determined by the permanent chairman of the meeting prior to the
adjournment of such meeting.  In the absence
of a quorum at any such adjourned meeting, such adjourned meeting may be
further adjourned for a period of not less than 10 days as determined by the
permanent chairman of the meeting prior to the adjournment of such adjourned
meeting.  Notice of the reconvening of
any adjourned meeting shall be given as provided in Section 8.02, except
that such notice need be given only once not less than five days prior to the
date on which the meeting is scheduled to be reconvened.  Notice of the reconvening of an adjourned
meeting shall state expressly the percentage, as provided above, of the
aggregate principal amount of the Debt Securities then outstanding which shall
constitute a quorum.


 


Except as limited by the proviso in the first
paragraph of Section 9.02, any resolution presented to a meeting or
adjourned meeting duly reconvened at which a quorum is present as aforesaid may
be adopted by the affirmative vote of the holders of a majority in aggregate
principal amount of the Debt Securities then outstanding; provided, however,
that, except as limited by the proviso in the first paragraph of Section 9.02,
any resolution with respect to any consent, waiver, request, demand, notice,
authorization, direction or other action that this Indenture expressly provides
may be given by the holders of not less than a specified percentage in
outstanding principal amount of the Debt Securities may be adopted at a meeting
or an adjourned meeting duly reconvened and at which a quorum is present as
aforesaid only by the affirmative vote of the holders of not less than such
specified percentage in aggregate principal amount of the Debt Securities then
outstanding.


 


48

















 


Any resolution passed or decision taken at any meeting
of holders of Debt Securities duly held in accordance with this Section shall
be binding on all the Securityholders, whether or not present or represented at
the meeting.


 


ARTICLE IX

SUPPLEMENTAL INDENTURES


 


Section 9.01           Supplemental Indentures without
Consent of Securityholders.


 


The Company, when authorized by a Board Resolution,
and the Trustee may from time to time and at any time enter into an indenture
or indentures supplemental hereto, without the consent of the Securityholders,
for one or more of the following purposes:


 


(a)           to evidence the succession of another
corporation to the Company, or successive successions, and the assumption by
the successor corporation of the covenants, agreements and obligations of the
Company, pursuant to Article XI hereof;


 


(b)           to add to the covenants of the
Company such further covenants, restrictions or conditions for the protection
of the holders of Debt Securities as the Board of Directors shall consider to
be for the protection of the holders of such Debt Securities, and to make the
occurrence, or the occurrence and continuance, of a Default in any of such
additional covenants, restrictions or conditions a Default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, however,
that in respect of any such additional covenant, restriction or condition such
supplemental indenture may provide for a particular period of grace after
Default (which period may be shorter or longer than that allowed in the case of
other Defaults) or may provide for an immediate enforcement upon such Default
or may limit the remedies available to the Trustee upon such default;


 


(c)           to cure any ambiguity or to correct
or supplement any provision contained herein or in any supplemental indenture
which may be defective or inconsistent with any other provision contained
herein or in any supplemental indenture, or to make such other provisions in
regard to matters or questions arising under this Indenture, provided,
that any such action shall not adversely affect the interests of the holders of
the Debt Securities then outstanding;


 


(d)           to add to, delete from, or revise the
terms of Debt Securities, including, without limitation, any terms relating to
the issuance, exchange, registration or transfer of Debt Securities, including
to provide for transfer procedures and restrictions substantially similar to
those applicable to the Capital Securities, as required by Section 2.05
(for purposes of assuring that no registration of Debt Securities is required
under the Securities Act), provided, that any such action shall not
adversely affect the interests of the holders of the Debt Securities then
outstanding (it being understood, for purposes of this proviso, that transfer
restrictions on Debt Securities substantially similar to those applicable to
Capital Securities shall not be deemed to adversely affect the holders of the
Debt Securities);


 


(e)           to evidence and provide for the
acceptance of appointment hereunder by a successor Trustee with respect to the
Debt Securities and to add to or change any of the


 


49

















 


provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, pursuant to the requirements of Section 6.10;


 


(f)            to make any change (other than as
elsewhere provided in this Section) that does not adversely affect the rights
of any Securityholder in any material respect; or


 


(g)           to provide for the issuance of and
establish the form and terms and conditions of the Debt Securities, to
establish the form of any certifications required to be furnished pursuant to
the terms of this Indenture or the Debt Securities, or to add to the rights of
the holders of Debt Securities.


 


The Trustee is hereby authorized to join with the
Company in the execution of any such supplemental indenture, to make any
further appropriate agreements and stipulations which may be therein contained
and to accept the conveyance, transfer and assignment of any property
thereunder, but the Trustee shall not be obligated to, but may in its
discretion, enter into any such supplemental indenture which affects the
Trustee’s own rights, duties or immunities under this Indenture or otherwise.


 


Any supplemental indenture authorized by the
provisions of this Section may be executed by the Company and the Trustee
without the consent of the holders of any of the Debt Securities at the time
outstanding, notwithstanding any of the provisions of Section 9.02.


 


Section 9.02           Supplemental Indentures with
Consent of Securityholders.


 


With the consent (evidenced as provided in Section 7.01)
of the holders of a majority in aggregate principal amount of the Debt
Securities at the time outstanding affected by such supplemental indenture, the
Company, when authorized by a Board Resolution, and the Trustee may from time
to time and at any time enter into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act, then
in effect, applicable to indentures qualified thereunder) for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture or of modifying
in any manner the rights of the holders of the Debt Securities; provided,
however, that no such supplemental indenture shall, without the consent
of the holders of each Debt Security then outstanding and affected thereby, (i) change
the Maturity Date of any Debt Security, or reduce the principal amount thereof
or any premium thereon, or reduce the rate (or manner of calculation of the
rate) or extend the time of payment of interest thereon, or reduce (other than
as a result of the maturity or earlier redemption of any such Debt Security in
accordance with the terms of this Indenture and such Debt Security) or increase
the aggregate principal amount of Debt Securities then outstanding, or change
any of the redemption provisions, or make the principal thereof or any interest
or premium thereon payable in any coin or currency other than United States
Dollars, or impair or affect the right of any Securityholder to institute suit
for payment thereof, or (ii) reduce the aforesaid percentage of Debt
Securities the holders of which are required to consent to any such
supplemental indenture; and provided, further, that if the Debt
Securities are held by the Trust or the trustee of the Trust, such supplemental
indenture shall not be effective until the holders of a majority in aggregate
liquidation amount of the outstanding Capital Securities shall have consented
to such supplemental indenture; provided, further, that if the
consent of the Securityholder of each


 


50

















 


outstanding Debt Security
is required, such supplemental indenture shall not be effective until each
holder of the outstanding Capital Securities shall have consented to such
supplemental indenture.


 


Upon the request of the Company accompanied by a Board
Resolution authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Securityholders
(and holders of Capital Securities, if required) as aforesaid, the Trustee
shall join with the Company in the execution of such supplemental indenture
unless such supplemental indenture affects the Trustee’s own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such supplemental
indenture.


 


Promptly after the execution by the Company and the
Trustee of any supplemental indenture pursuant to the provisions of this
Section, the Trustee shall transmit by mail, first class postage prepaid, a
notice, prepared by the Company, setting forth in general terms the substance
of such supplemental indenture, to the Securityholders as their names and
addresses appear upon the Debt Security Register.  Any failure of the Trustee to mail such notice,
or any defect therein, shall not, however, in any way impair or affect the
validity of any such supplemental indenture.


 


It shall not be necessary for the consent of the
Securityholders under this Section to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.


 


Section 9.03           Effect of Supplemental Indentures.


 


Upon the execution of any supplemental indenture
pursuant to the provisions of this Article IX, this Indenture shall be and
be deemed to be modified and amended in accordance therewith and the respective
rights, limitations of rights, obligations, duties and immunities under this
Indenture of the Trustee, the Company and the holders of Debt Securities shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.


 


Section 9.04           Notation on Debt Securities.


 


Debt Securities authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this Article IX
may bear a notation as to any matter provided for in such supplemental
indenture.  If the Company or the Trustee
shall so determine, new Debt Securities so modified as to conform, in the
opinion of the Board of Directors of the Company, to any modification of this
Indenture contained in any such supplemental indenture may be prepared and
executed by the Company, authenticated by the Trustee or the Authenticating
Agent and delivered in exchange for the Debt Securities then outstanding.


 


51
















 


Section 9.05           Evidence
of Compliance of Supplemental Indenture to be Furnished to Trustee.


 


The Trustee, subject to the provisions of Sections
6.01 and 6.02, shall, in addition to the documents required by Section 14.06,
receive an Officers’ Certificate as conclusive evidence that any supplemental
indenture executed pursuant hereto complies with the requirements of this Article IX.  The Trustee shall also receive an Opinion of
Counsel as conclusive evidence that any supplemental indenture executed
pursuant to this Article IX is authorized or permitted by, and conforms
to, the terms of this Article IX and that it is proper for the Trustee
under the provisions of this Article IX to join in the execution thereof.


 


ARTICLE X

REDEMPTION OF SECURITIES


 


Section 10.01         Optional
Redemption.


 


The Company shall have the right, subject to the
receipt by the Company of the prior approval from the Federal Reserve, if then
required under applicable capital guidelines or policies of the Federal
Reserve, to redeem the Debt Securities, in whole or (provided that all accrued
and unpaid interest has been paid on all Debt Securities for all Interest
Periods terminating on or prior to such date) from time to time in part, on any
Interest Payment Date on or after June 30,
2013 (each, an “Optional Redemption Date”), at the Optional Redemption
Price.


 


Section 10.02         Special
Event Redemption.


 


If a Special Event shall occur and be continuing, the
Company shall have the right, subject to the receipt by the Company of prior
approval from the Federal Reserve, if then required under applicable capital
guidelines or policies of the Federal Reserve, to redeem the Debt Securities,
in whole but not in part, at any time within 90 days following the occurrence
of such Special Event (the “Special Redemption Date”), at the Special
Redemption Price.


 


Section 10.03         Notice
of Redemption; Selection of Debt Securities.


 


In case the Company shall desire to exercise the right
to redeem all, or, as the case may be, any part of the Debt Securities, it
shall fix a date for redemption and shall mail, or cause the Trustee to mail
(at the expense of the Company), a notice of such redemption at least 30 and
not more than 60 days prior to the date fixed for redemption to the holders of
Debt Securities so to be redeemed as a whole or in part at their last addresses
as the same appear on the Debt Security Register.  Such mailing shall be by first class
mail.  The notice if mailed in the manner
herein provided shall be conclusively presumed to have been duly given, whether
or not the holder receives such notice. 
In any case, failure to give such notice by mail or any defect in the
notice to the holder of any Debt Security designated for redemption as a whole
or in part shall not affect the validity of the proceedings for the redemption
of any other Debt Security.


 


Each such notice of redemption shall specify the CUSIP
number, if any, of the Debt Securities to be redeemed, the date fixed for
redemption, the price (or manner of calculation of the price) at which Debt
Securities are to be redeemed, the place or places of payment, that payment
will be made upon presentation and surrender of such Debt Securities, 


 


52

















 


that interest accrued to
the date fixed for redemption will be paid as specified in said notice, and
that on and after said date interest thereon or on the portions thereof to be
redeemed will cease to accrue. If less than all the Debt Securities are to be
redeemed, the notice of redemption shall specify the numbers of the Debt
Securities to be redeemed.  In case the
Debt Securities are to be redeemed in part only, the notice of redemption shall
state the portion of the principal amount thereof to be redeemed and shall
state that on and after the date fixed for redemption, upon surrender of such
Debt Security, a new Debt Security or Debt Securities in principal amount equal
to the unredeemed portion thereof will be issued.


 


Prior to 10:00 a.m., New York City time, on the
Optional Redemption Date or the Special Redemption Date specified in the notice
of redemption given as provided in this Section, the Company will deposit with
the Trustee or with one or more Paying Agents an amount of money sufficient to
redeem on such date all the Debt Securities so called for redemption at the
applicable price therefor, together with unpaid interest accrued to such date.


 


The Company will give the Trustee notice not less than
45 nor more than 75 days prior to the date fixed for redemption as to the price
at which the Debt Securities are to be redeemed and the aggregate principal
amount of Debt Securities to be redeemed and the Trustee shall select, in such
manner as in its sole discretion it shall deem appropriate and fair, the Debt
Securities or portions thereof (in integral multiples of $1,000) to be
redeemed.


 


Section 10.04         Payment
of Debt Securities Called for Redemption.


 


If notice of redemption has been given as provided in Section 10.03,
the Debt Securities or portions of Debt Securities with respect to which such
notice has been given shall become due and payable on the related Optional
Redemption Date or Special Redemption Date (as the case may be) and at the
place or places stated in such notice at the applicable price therefor,
together with unpaid interest accrued thereon to said Optional Redemption Date
or the Special Redemption Date (as the case may be), and on and after said
Optional Redemption Date or the Special Redemption Date (as the case may be)
(unless the Company shall default in the payment of such Debt Securities at the
redemption price, together with unpaid interest accrued thereon to said date)
interest on the Debt Securities or portions of Debt Securities so called for
redemption shall cease to accrue.  On
presentation and surrender of such Debt Securities at a place of payment
specified in said notice, such Debt Securities or the specified portions
thereof shall be paid and redeemed by the Company at the applicable price
therefor, together with unpaid interest, if any, accrued thereon to said
Optional Redemption Date or the Special Redemption Date (as the case may be); provided,
however, that interest payable on any Interest Payment Date on or prior
to said Optional Redemption Date or the Special Redemption Date will be paid to
the holders on the relevant regular record date.


 


Upon presentation of any Debt Security redeemed in
part only, the Company shall execute and the Trustee shall authenticate and
make available for delivery to the holder thereof, at the expense of the
Company, a new Debt Security or Debt Securities of authorized denominations in
principal amount equal to the unredeemed portion of the Debt Security so
presented.


 


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ARTICLE XI

CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE


 


Section 11.01         Company
May Consolidate, etc., on Certain Terms.


 


Nothing contained in this Indenture or in the Debt
Securities shall prevent any consolidation or merger of the Company with or
into any other corporation or corporations (whether or not affiliated with the
Company) or successive consolidations or mergers in which the Company or its
successor or successors shall be a party or parties, or shall prevent any sale,
conveyance, transfer or other disposition of all or substantially all of the
property or capital stock of the Company or its successor or successors to any
other corporation (whether or not affiliated with the Company or its successor
or successors) authorized to acquire and operate the same; provided, however,
that the Company hereby covenants and agrees that (i) upon any such
consolidation, merger (where the Company is not the surviving corporation),
sale, conveyance, transfer or other disposition, the successor entity shall be
a corporation organized and existing under the laws of the United States or any
state thereof or the District of Columbia (unless such corporation has (1) agreed
to make all payments due in respect of the Debt Securities or, if outstanding,
the Trust Securities and the Capital Securities Guarantee without withholding
or deduction for, or on account of, any taxes, duties, assessments or other
governmental charges under the laws or regulations of the jurisdiction of
organization or residence (for tax purposes) of such corporation or any
political subdivision or taxing authority thereof or therein unless required by
applicable law, in which case such corporation shall have agreed to pay such
additional amounts as shall be required so that the net amounts received and
retained by the holders of such Debt Securities or Trust Securities, as the
case may be, after payment of all taxes (including withholding taxes), duties,
assessments or other governmental charges, will be equal to the amounts that
such holders would have received and retained had no such taxes (including
withholding taxes), duties, assessments or other governmental charges been
imposed), (2) irrevocably and unconditionally consented and submitted to
the jurisdiction of any United States federal court or New York state court, in
each case located in the Borough of Manhattan, The City of New York, in respect
of any action, suit or proceeding against it arising out of or in connection
with this Indenture, the Debt Securities, the Capital Securities Guarantee or
the Declaration and irrevocably and unconditionally waived, to the fullest
extent permitted by law, any objection to the laying of venue in any such court
or that any such action, suit or proceeding has been brought in an inconvenient
forum and (3) irrevocably appointed an agent in The City of New York for
service of process in any action, suit or proceeding referred to in clause (2) above)  and such corporation expressly assumes all of
the obligations of the Company under the Debt Securities, this Indenture, the
Capital Securities Guarantee and the Declaration and (ii) after giving
effect to any such consolidation, merger, sale, conveyance, transfer or other
disposition, no Default or Event of Default shall have occurred and be
continuing.


 


Section 11.02         Successor
Entity to be Substituted.


 


In case of any such consolidation, merger, sale,
conveyance, transfer or other disposition contemplated in Section 11.01
and upon the assumption by the successor corporation, by supplemental
indenture, executed and delivered to the Trustee and reasonably satisfactory in
form to the Trustee, of the due and punctual payment of the principal of and
premium, if any, and interest on all of the Debt Securities and the due and
punctual performance and observance 


 


54

















 


of all of the covenants
and conditions of this Indenture to be performed or observed by the Company,
such successor corporation shall succeed to and be substituted for the Company,
with the same effect as if it had been named herein as the Company, and
thereupon the predecessor entity shall be relieved of any further liability or
obligation hereunder or upon the Debt Securities.  Such successor corporation thereupon may
cause to be signed, and may issue either in its own name or in the name of the
Company, any or all of the Debt Securities issuable hereunder which theretofore
shall not have been signed by the Company and delivered to the Trustee or the
Authenticating Agent; and, upon the order of such successor corporation instead
of the Company and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee or the Authenticating Agent shall
authenticate and deliver any Debt Securities which previously shall have been
signed and delivered by the officers of the Company to the Trustee or the
Authenticating Agent for authentication, and any Debt Securities which such
successor corporation thereafter shall cause to be signed and delivered to the
Trustee or the Authenticating Agent for that purpose.  All the Debt Securities so issued shall in
all respects have the same legal rank and benefit under this Indenture as the
Debt Securities theretofore or thereafter issued in accordance with the terms
of this Indenture as though all of such Debt Securities had been issued at the
date of the execution hereof.


 


Section 11.03         Opinion
of Counsel to be Given to Trustee.


 


The Trustee, subject to the provisions of Sections
6.01 and 6.02, shall receive, in addition to the Opinion of Counsel required by
Section 9.05, an Opinion of Counsel as conclusive evidence that any
consolidation, merger, sale, conveyance, transfer or other disposition, and any
assumption, permitted or required by the terms of this Article XI complies
with the provisions of this Article XI.


 


ARTICLE XII

SATISFACTION AND DISCHARGE OF INDENTURE


 


Section 12.01         Discharge
of Indenture.


 


When (a) the Company shall deliver to the Trustee
for cancellation all Debt Securities theretofore authenticated (other than any
Debt Securities which shall have been destroyed, lost or stolen and which shall
have been replaced or paid as provided in Section 2.06) and not
theretofore canceled, or (b) all the Debt Securities not theretofore
canceled or delivered to the Trustee for cancellation shall have become due and
payable, or are by their terms to become due and payable within one year or are
to be called for redemption within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption, and the Company shall
deposit with the Trustee, in trust, funds, which shall be immediately due and
payable, sufficient to pay at maturity or upon redemption all of the Debt
Securities (other than any Debt Securities which shall have been destroyed,
lost or stolen and which shall have been replaced or paid as provided in Section 2.06)
not theretofore canceled or delivered to the Trustee for cancellation,
including principal and premium, if any, and interest due or to become due to
the Maturity Date, any Optional Redemption Date or the Special Redemption Date,
as the case may be, but excluding, however, the amount of any moneys for the
payment of principal of and premium, if any, or interest on the Debt Securities
(1) theretofore repaid to the Company in accordance with the provisions of
Section 12.04, or (2) paid to any state or to the District of 


 


55

















 


Columbia pursuant to its
unclaimed property or similar laws, and if in the case of either clause (a) or
(b) above the Company shall also pay or cause to be paid all other sums
payable hereunder by the Company, then this Indenture shall cease to be of
further effect except for the provisions of Sections 2.05, 2.06, 3.01, 3.02,
3.04, 6.06, 6.09 and 12.04 hereof, which shall survive until such Debt
Securities shall mature or are redeemed, as the case may be, and are paid in full.  Thereafter, Sections 6.06, 6.09 and 12.04
shall survive, and the Trustee, on demand of the Company accompanied by an
Officers’ Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with, and at the cost and
expense of the Company, shall execute proper instruments acknowledging
satisfaction of and discharging this Indenture, the Company, however, hereby
agreeing to reimburse the Trustee for any costs or expenses thereafter
reasonably and properly incurred by the Trustee in connection with this
Indenture or the Debt Securities.


 


Section 12.02         Deposited
Moneys to be Held in Trust by Trustee.


 


Subject to the provisions of Section 12.04, all
moneys deposited with the Trustee pursuant to Section 12.01 shall be held
in trust and applied by it to the payment, either directly or through any
Paying Agent (including the Company if acting as its own Paying Agent), to the
holders of the particular Debt Securities for the payment of which such moneys
have been deposited with the Trustee, of all sums due and to become due thereon
for principal, premium, if any, and interest.


 


Section 12.03         Paying
Agent to Repay Moneys Held.


 


Upon the satisfaction and discharge of this Indenture,
all moneys then held by any Paying Agent of the Debt Securities (other than the
Trustee) shall, upon demand of the Company, be repaid to the Company or paid to
the Trustee, and thereupon such Paying Agent shall be released from all further
liability with respect to such moneys.


 


Section 12.04         Return
of Unclaimed Moneys.


 


Any moneys deposited with or paid to the Trustee or
any Paying Agent for payment of the principal of and premium, if any, or
interest on Debt Securities and not applied but remaining unclaimed by the
holders of Debt Securities for two years after the date upon which the
principal of and premium, if any, or interest on such Debt Securities, as the
case may be, shall have become due and payable, shall be repaid to the Company
by the Trustee or such Paying Agent on written demand; and the holder of any of
the Debt Securities shall thereafter look only to the Company for any payment
which such holder may be entitled to collect and all liability of the Trustee or
such Paying Agent with respect to such moneys shall thereupon cease.


 


56

















 


ARTICLE XIII

IMMUNITY OF INCORPORATORS, STOCKHOLDERS,

OFFICERS AND DIRECTORS


 


Section 13.01         Indenture
and Debt Securities Solely Corporate Obligations.


 


No recourse for the payment of the principal of or
premium, if any, or interest on any Debt Security, or for any claim based
thereon or otherwise in respect thereof, and no recourse under or upon any
obligation, covenant or agreement of the Company in this Indenture or in any
supplemental indenture, or in any such Debt Security, or because of the
creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, officer, director, employee or agent, as such, past,
present or future, of the Company or of any predecessor or successor
corporation of the Company, either directly or through the Company or any
successor corporation of the Company, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty
or otherwise; it being expressly understood that all such liability is hereby
expressly waived and released as a condition of, and as a consideration for,
the execution of this Indenture and the issue of the Debt Securities.


 


ARTICLE XIV

MISCELLANEOUS PROVISIONS


 


Section 14.01         Successors.


 


All the covenants, stipulations, promises and
agreements of the Company contained in this Indenture shall bind its successors
and assigns, whether so expressed or not.


 


Section 14.02         Official
Acts by Successor Entity.


 


Any act or proceeding by any provision of this
Indenture authorized or required to be done or performed by any board,
committee or officer of the Company shall and may be done and performed with
like force and effect by the like board, committee, officer or other authorized
Person of any entity that shall at the time be the lawful successor of the
Company.


 


Section 14.03         Surrender
of Company Powers.


 


The Company, by instrument in writing executed by
authority of 2/3 (two thirds) of its Board of Directors and delivered to the
Trustee, may surrender any of the powers reserved to the Company and thereupon
such power so surrendered shall terminate both as to the Company and as to any
permitted successor.


 


Section 14.04         Addresses
for Notices, etc.


 


Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the Trustee or by
the Securityholders on the Company may be given or served in writing by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company with the
Trustee for such purpose) to the Company at 875
Lowcountry Blvd., Mount Pleasant, South Carolina 29464, Attention: Chief Financial Officer.  Any notice, direction, request or demand by
any 


 


57

















 


Securityholder or the
Company to or upon the Trustee shall be deemed to have been sufficiently given
or made, for all purposes, if given or made in writing at the office of
Wilmington Trust Company at Rodney Square North, 1100 North Market Street,
Wilmington, DE 19890-0001, Attention: Corporate Capital Markets.


 


Section 14.05         Governing
Law.


 


This Indenture and the Debt Securities shall each be
governed by, and construed in accordance with, the laws of the State of New
York, without regard to conflict of laws principles of said State other than Section 5-1401
of the New York General Obligations Law.


 


Section 14.06         Evidence
of Compliance with Conditions Precedent.


 


Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers’ Certificate stating that in
the opinion of the signers all conditions precedent, if any, provided for in
this Indenture relating to the proposed action have been complied with and an
Opinion of Counsel stating that, in the opinion of such counsel, all such
conditions precedent have been complied with (except that no such Opinion of
Counsel is required to be furnished to the Trustee in connection with the
authentication and issuance of Debt Securities).


 


Each certificate or opinion provided for in this
Indenture and delivered to the Trustee with respect to compliance with a
condition or covenant provided for in this Indenture (except certificates
delivered pursuant to Section 3.05) shall include (a) a statement
that the person making such certificate or opinion has read such covenant or
condition and the definitions relating thereto; (b) a brief statement as
to the nature and scope of the examination or investigation upon which the
statements or opinions contained in such certificate or opinion are based; (c) a
statement that, in the opinion of such person, he or she has made such
examination or investigation as is necessary to enable him or her 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 or not, in the opinion of
such person, such condition or covenant has been complied with.


 


Section 14.07         Business
Day Convention.


 


Notwithstanding anything to the contrary contained
herein, if any Interest Payment Date after the Interest Payment Date in June 2013,
other than the Maturity Date, any Optional Redemption Date or the Special
Redemption Date, falls on a day that is not a Business Day, then any interest
payable will be paid on, and such Interest Payment Date will be moved to, the
next succeeding Business Day, and additional interest will accrue for each day
that such payment is delayed as a result thereof.  If any Interest Payment Date on or prior to
the Interest Payment Date in June 2013, the Maturity Date, any Optional
Redemption Date or the Special Redemption Date falls on a day that is not a
Business Day, then the principal, premium, if any, and/or interest payable on
such date will be paid on the next succeeding Business Day, and no additional
interest will accrue in respect of such payment made on such next succeeding
Business Day.


 


58

















 


Section 14.08         Table
of Contents, Headings, etc.


 


The table of contents and the titles and headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.


 


Section 14.09         Execution
in Counterparts.


 


This Indenture may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.


 


Section 14.10         Separability.


 


In case any one or more of the provisions contained in
this Indenture or in the Debt Securities shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provisions of this Indenture or
of such Debt Securities, but this Indenture and such Debt Securities shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein or therein.


 


Section 14.11         Assignment.


 


Subject to Article XI, the Company will have the
right at all times to assign any of its rights or obligations under this
Indenture and the Debt Securities to a direct or indirect wholly owned
Subsidiary of the Company; provided, however, that, in the event
of any such assignment, the Company will remain liable for all such
obligations. Subject to the foregoing, this Indenture is binding upon and
inures to the benefit of the parties hereto and their respective successors and
assigns. This Indenture may not otherwise be assigned by the parties thereto.


 


Section 14.12         Acknowledgment
of Rights.


 


The Company acknowledges that, with respect to any
Debt Securities held by the Trust or a trustee of the Trust, if such trustee of
the Trust fails to enforce its rights under this Indenture as the holder of
Debt Securities held as the assets of the Trust after the holders of a majority
in aggregate liquidation amount of the outstanding Capital Securities of the
Trust have so directed in writing such trustee, a holder of record of such
Capital Securities may, to the fullest extent permitted by law, institute legal
proceedings directly against the Company to enforce such trustee’s rights under
this Indenture without first instituting any legal proceedings against such
trustee or any other Person. 
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Company to pay
interest or premium, if any, on or principal of the Debt Securities on the date
such interest, premium, if any, or principal is otherwise due and payable (or,
in the case of redemption, on the related Optional Redemption Date or the
Special Redemption Date (as the case may be)), the Company acknowledges that a
holder of outstanding Capital Securities of the Trust may directly institute a
proceeding against the Company for enforcement of payment to such holder directly
of the principal of or premium, if any, or interest on the Debt Securities
having an aggregate principal amount equal to the aggregate liquidation amount
of the Capital Securities of such 


 


59

















 


holder on or after the
respective due date (or Optional Redemption Date or Special Redemption Date (as
the case may be)) specified in the Debt Securities.


 


ARTICLE XV

SUBORDINATION OF DEBT SECURITIES


 


Section 15.01         Agreement
to Subordinate.


 


The Company covenants and agrees, and each holder of
Debt Securities issued hereunder and under any supplemental indenture (the
“Additional Provisions”) by such holder’s acceptance thereof likewise covenants
and agrees, that all Debt Securities shall be issued subject to the provisions
of this Article XV; and each holder of a Debt Security, whether upon
original issue or upon transfer or assignment thereof, accepts and agrees to be
bound by such provisions.


 


The payment by the Company of the payments due on all
Debt Securities issued hereunder and under any Additional Provisions shall, to
the extent and in the manner hereinafter set forth, be subordinated and junior
in right of payment to the prior payment in full of all Senior Indebtedness of
the Company, whether outstanding at the date of this Indenture or thereafter
incurred.


 


No provision of this Article XV shall prevent the
occurrence of any default or Event of Default hereunder.


 


Section 15.02         Default
on Senior Indebtedness.


 


In the event and during the continuation of any default
by the Company in the payment of principal, premium, interest or any other
amount due on any Senior Indebtedness of the Company following any applicable
grace period, or in the event that the maturity of any Senior Indebtedness of
the Company has been accelerated because of a default, and such acceleration
has not been rescinded or canceled and such Senior Indebtedness has not been
paid in full, then, in either case, no payment shall be made by the Company
with respect to the payments due on the Debt Securities.


 


In the event that, notwithstanding the foregoing, any
payment shall be received by the Trustee or any Securityholder when such
payment is prohibited by the preceding paragraph of this Section, such payment
shall, subject to Section 15.06, be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of Senior Indebtedness or their
respective representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Senior Indebtedness may have been issued, as
their respective interests may appear, but only to the extent that the holders
of the Senior Indebtedness (or their representative or representatives or
trustee) notify the Trustee in writing within 90 days of such payment of the
amounts then due and owing on the Senior Indebtedness and only the amounts
specified in such notice to the Trustee shall be paid to the holders of Senior
Indebtedness.


 


Section 15.03         Liquidation;
Dissolution; Bankruptcy.


 


Upon any payment by the Company or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution, 


 


60

















 


winding-up, liquidation
or reorganization of the Company, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, all amounts due upon
all Senior Indebtedness of the Company shall first be paid in full, or payment
thereof provided for in money in accordance with its terms, before any payment
is made by the Company on the Debt Securities; and upon any such dissolution,
winding-up, liquidation or reorganization, any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, to which the Securityholders or the Trustee would
be entitled to receive from the Company, except for the provisions of this Article XV,
shall be paid by the Company, or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or distribution,
or by the Securityholders or by the Trustee under this Indenture if received by
them or it, directly to the holders of Senior Indebtedness of the Company (pro
rata to such holders on the basis of the respective amounts of Senior
Indebtedness held by such holders, as calculated by the Company) or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, as their respective interests may appear, to the extent
necessary to pay such Senior Indebtedness in full, in money or money’s worth,
after giving effect to any concurrent payment or distribution to or for the
holders of such Senior Indebtedness, before any payment or distribution is made
to the Securityholders or to the Trustee.


 


In the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, prohibited by the foregoing shall be
received by the Trustee or any Securityholder before all Senior Indebtedness of
the Company is paid in full, or provision is made for such payment in money in
accordance with its terms, such payment or distribution shall be held in trust
for the benefit of, and shall be paid over or delivered to, the holders of such
Senior Indebtedness or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, as their respective
interests may appear, as calculated by the Company, for application to the
payment of all Senior Indebtedness of the Company remaining unpaid to the
extent necessary to pay such Senior Indebtedness in full in money in accordance
with its terms, after giving effect to any concurrent payment or distribution
to or for the benefit of the holders of such Senior Indebtedness.


 


For purposes of this Article XV, the words “cash,
property or securities” shall not be deemed to include shares of stock of the
Company as reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this Article XV
with respect to the Debt Securities to the payment of all Senior Indebtedness
of the Company, that may at the time be outstanding, provided, that (a) such
Senior Indebtedness is assumed by the new corporation, if any, resulting from
any such reorganization or readjustment, and (b) the rights of the holders
of such Senior Indebtedness are not, without the consent of such holders,
altered by such reorganization or readjustment. 
The consolidation of the Company with, or the merger of the Company
into, another corporation or the liquidation or dissolution of the Company
following the conveyance, transfer or other disposition of its property as an
entirety, or substantially as an entirety, to another corporation upon the terms
and conditions provided for in Article XI of this Indenture shall not be
deemed a dissolution, winding-up, liquidation or reorganization for the
purposes of this Section if such other corporation shall, as a part of
such 


 


61

















 


consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article XI of
this Indenture.  Nothing in Section 15.02
or in this Section shall apply to claims of, or payments to, the Trustee
under or pursuant to Section 6.06 of this Indenture.


 


Section 15.04         Subrogation.


 


Subject to the payment in full of all Senior
Indebtedness of the Company, the Securityholders shall be subrogated to the
rights of the holders of such Senior Indebtedness to receive payments or distributions
of cash, property or securities of the Company applicable to such Senior
Indebtedness until all payments due on the Debt Securities shall be paid in
full; and, for the purposes of such subrogation, no payments or distributions
to the holders of such Senior Indebtedness of any cash, property or securities
to which the Securityholders or the Trustee would be entitled except for the
provisions of this Article XV, and no payment over pursuant to the
provisions of this Article XV to or for the benefit of the holders of such
Senior Indebtedness by Securityholders or the Trustee, shall, as between the
Company, its creditors other than holders of Senior Indebtedness of the
Company, and the holders of the Debt Securities be deemed to be a payment or distribution
by the Company to or on account of such Senior Indebtedness.  It is understood that the provisions of this Article XV
are, and are intended, solely for the purposes of defining the relative rights
of the holders of the Debt Securities, on the one hand, and the holders of such
Senior Indebtedness, on the other hand.


 


Nothing contained in this Article XV or elsewhere
in this Indenture, any Additional Provisions or in the Debt Securities is
intended to or shall impair, as between the Company, its creditors other than
the holders of Senior Indebtedness of the Company, and the holders of the Debt
Securities, the obligation of the Company, which is absolute and unconditional,
to pay to the holders of the Debt Securities all payments on the Debt Securities
as and when the same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of the holders of
the Debt Securities and creditors of the Company other than the holders of
Senior Indebtedness of the Company, nor shall anything herein or therein
prevent the Trustee or the holder of any Debt Security from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article XV of the
holders of such Senior Indebtedness in respect of cash, property or securities
of the Company received upon the exercise of any such remedy.


 


Upon any payment or distribution of assets of the
Company referred to in this Article XV, the Trustee, subject to the
provisions of Article VI of this Indenture, and the Securityholders shall
be entitled to conclusively rely upon any order or decree made by any court of
competent jurisdiction in which such dissolution, winding-up, liquidation or
reorganization proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidation trustee, agent or other Person making such
payment or distribution, delivered to the Trustee or to the Securityholders,
for the purposes of ascertaining the Persons entitled to participate in such
distribution, the holders of Senior Indebtedness and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article XV.


 


62

















 


Section 15.05         Trustee
to Effectuate Subordination.


 


Each Securityholder, by such Securityholder’s
acceptance thereof, authorizes and directs the Trustee on such Securityholder’s
behalf to take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article XV and appoints the Trustee such
Securityholder’s attorney-in-fact for any and all such purposes.


 


Section 15.06         Notice
by the Company.


 


The Company shall give prompt written notice to a
Responsible Officer of the Trustee at the Principal Office of the Trustee of
any fact known to the Company that would prohibit the making of any payment of
moneys to or by the Trustee in respect of the Debt Securities pursuant to the
provisions of this Article XV. 
Notwithstanding the provisions of this Article XV or any other
provision of this Indenture or any Additional Provisions, the Trustee shall not
be charged with knowledge of the existence of any facts that would prohibit the
making of any payment of moneys to or by the Trustee in respect of the Debt
Securities pursuant to the provisions of this Article XV unless and until
a Responsible Officer of the Trustee at the Principal Office of the Trustee
shall have received written notice thereof from the Company or a holder or
holders of Senior Indebtedness or from any trustee therefor; and before the
receipt of any such written notice, the Trustee, subject to the provisions of Article VI
of this Indenture, shall be entitled in all respects to assume that no such
facts exist; provided, however, that if the Trustee shall not
have received the notice provided for in this Section at least two
Business Days prior to the date upon which by the terms hereof any money may become
payable for any purpose (including, without limitation, the payment of the
principal of or premium, if any, or interest on any Debt Security), then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such money and to apply the same to
the purposes for which they were received, and shall not be affected by any
notice to the contrary that may be received by it within two Business Days
prior to such date.


 


The Trustee, subject to the provisions of Article VI
of this Indenture, shall be entitled to conclusively rely on the delivery to it
of a written notice by a Person representing himself or herself to be a holder
of Senior Indebtedness of the Company (or a trustee or representative on behalf
of such holder) to establish that such notice has been given by a holder of
such Senior Indebtedness or a trustee or representative on behalf of any such
holder or holders.  In the event that the
Trustee determines in good faith that further evidence is required with respect
to the right of any Person as a holder of such Senior Indebtedness to
participate in any payment or distribution pursuant to this Article XV,
the Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior Indebtedness held
by such Person, the extent to which such Person is entitled to participate in
such payment or distribution and any other facts pertinent to the rights of
such Person under this Article XV, and, if such evidence is not furnished,
the Trustee may defer any payment to such Person pending judicial determination
as to the right of such Person to receive such payment.


 


Section 15.07         Rights
of the Trustee; Holders of Senior Indebtedness.


 


The Trustee, in its individual capacity, shall be
entitled to all the rights set forth in this Article XV in respect of any
Senior Indebtedness at any time held by it, to the same extent as 


 


63

















 


any other holder of Senior
Indebtedness, and nothing in this Indenture or any Additional Provisions shall
deprive the Trustee of any of its rights as such holder.


 


With respect to the holders of Senior Indebtedness of
the Company, the Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this Article XV,
and no implied covenants or obligations with respect to the holders of such
Senior Indebtedness shall be read into this Indenture or any Additional
Provisions against the Trustee.  The
Trustee shall not owe or be deemed to owe any fiduciary duty to the holders of
such Senior Indebtedness and, subject to the provisions of Article VI of
this Indenture, the Trustee shall not be liable to any holder of such Senior
Indebtedness if it shall pay over or deliver to Securityholders, the Company or
any other Person money or assets to which any holder of such Senior
Indebtedness shall be entitled by virtue of this Article XV or otherwise.


 


Nothing in this Article XV shall apply to claims
of, or payments to, the Trustee under or pursuant to Section 6.06.


 


Section 15.08         Subordination
May Not Be Impaired.


 


No right of any present or future holder of any Senior
Indebtedness of the Company to enforce subordination as herein provided shall
at any time in any way be prejudiced or impaired by any act or failure to act
on the part of the Company, or by any act or failure to act, in good faith, by
any such holder, or by any noncompliance by the Company, with the terms,
provisions and covenants of this Indenture, regardless of any knowledge thereof
that any such holder may have or otherwise be charged with.


 


Without in any way limiting the generality of the
foregoing paragraph, the holders of Senior Indebtedness of the Company may, at
any time and from time to time, without the consent of or notice to the Trustee
or the Securityholders, without incurring responsibility to the Securityholders
and without impairing or releasing the subordination provided in this Article XV
or the obligations hereunder of the holders of the Debt Securities to the
holders of such Senior Indebtedness, do any one or more of the following: (a) change
the manner, place or terms of payment or extend the time of payment of, or
renew or alter, such Senior Indebtedness, or otherwise amend or supplement in
any manner such Senior Indebtedness or any instrument evidencing the same or
any agreement under which such Senior Indebtedness is outstanding; (b) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing such Senior Indebtedness; (c) release any Person liable
in any manner for the collection of such Senior Indebtedness; and (d) exercise
or refrain from exercising any rights against the Company or any other Person.


 


64

















 


Wilmington Trust Company, in its capacity as Trustee,
hereby accepts the trusts in this Indenture declared and provided, upon the
terms and conditions herein above set forth.


 


IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed by their respective officers thereunto duly
authorized, as of the day and year first above written.


 


	
   

  	
  TIDELANDS
  BANCSHARES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By::

  	
    /s/ Robert
  E. Coffee, Jr.

  
	
   

  	
   

  	
  Name: Robert E.
  Coffee, Jr.

  
	
   

  	
   

  	
  Title: Chief Executive
  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WILMINGTON TRUST
  COMPANY,

  
	
   

  	
  as
  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By::

  	
    /s/ W.
  Thomas Morris, II

  
	
   

  	
   

  	
  Name: W. Thomas
  Morris, II

  
	
   

  	
   

  	
  Title: Assistant Vice
  President

  



 


65
















 


EXHIBIT A


 


FORM OF DEBT SECURITY


 


[FORM OF FACE
OF SECURITY]


 


[THIS SECURITY IS A GLOBAL DEBENTURE WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF THE DEPOSITORY TRUST COMPANY (“DTC”) OR A NOMINEE OF DTC. THIS SECURITY IS
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC
OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE,
AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A
WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER
NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.


 


UNLESS THIS SECURITY IS PRESENTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY SECURITY ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.](1)


 


THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAWS.  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.  THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE,
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (i) ONE YEAR
(OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(b)(1) UNDER THE
SECURITIES ACT) AFTER THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE
HEREOF AND (Z) THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE (AS
DEFINED IN RULE 405 UNDER THE SECURITIES ACT) OF THE COMPANY WAS THE HOLDER OF
THIS 


 






(1) Only applicable
if this Debt Security is a Global Debt Security.


 


A-1





















 


SECURITY OR SUCH INTEREST OR
PARTICIPATION (OR ANY PREDECESSOR THERETO) AND (ii) SUCH LATER DATE, IF
ANY, AS MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW, ONLY (A) TO
THE COMPANY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE
144A”), TO A PERSON THE HOLDER REASONABLY BELIEVES IS A “QUALIFIED
INSTITUTIONAL BUYER”, AS DEFINED IN RULE 144A, THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT
TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN
“ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2),
(3), (7) OR (8) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THIS SECURITY OR SUCH INTEREST OR PARTICIPATION FOR ITS OWN ACCOUNT,
OR FOR THE ACCOUNT OF SUCH AN 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, (D) PURSUANT TO OFFERS AND SALES TO
NON-US PERSONS THAT OCCUR OUTSIDE THE UNITED STATES PURSUANT TO REGULATION S
UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
COMPANY’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C) OR
(E) ABOVE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE INDENTURE, A
COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY.  THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE,
AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.


 


THE HOLDER OF THIS SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE,
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 THIS SECURITY OR
ANY INTEREST OR PARTICIPATION HEREIN, UNLESS SUCH PURCHASER OR HOLDER IS
ELIGIBLE FOR THE 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 OR
SUCH INTEREST OR PARTICIPATION 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 THIS 


 


A-2





















 


SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND
HOLDING HEREOF OR THEREOF, AS THE CASE MAY BE, 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 AND HOLDING 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.


 


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


 


THIS SECURITY WILL BE ISSUED AND MAY BE
TRANSFERRED ONLY IN MINIMUM DENOMINATIONS OF $100,000 AND MULTIPLES OF $1,000
IN EXCESS THEREOF.  ANY ATTEMPTED
TRANSFER OF THIS SECURITY IN DENOMINATIONS OF LESS THAN $100,000 SHALL BE
DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED
TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SECURITY OR ANY
INTEREST OR PARTICIPATION HEREIN FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED
TO, THE RECEIPT OF DISTRIBUTIONS ON THIS SECURITY OR SUCH INTEREST OR
PARTICIPATION, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO
INTEREST WHATSOEVER IN THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN.


 


THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT
INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES,
INCLUDING THE FEDERAL DEPOSIT INSURANCE CORPORATION (THE “FDIC”).  THIS OBLIGATION IS SUBORDINATED TO THE CLAIMS
OF THE DEPOSITORS AND THE CLAIMS OF GENERAL AND SECURED CREDITORS OF THE
COMPANY, IS INELIGIBLE AS COLLATERAL FOR A LOAN BY THE COMPANY OR ANY OF ITS
SUBSIDIARIES AND IS NOT SECURED.


 


A-3





















 


Fixed/Floating Rate
Junior Subordinated Debt Security due 2038


 


of


TIDELANDS
BANCSHARES, INC.


 


Tidelands Bancshares, Inc.,
a bank holding company incorporated in South
Carolina (the “Company”, which term includes any successor permitted
under the Indenture (as defined herein)), for value received, promises to pay
to Wilmington Trust Company, not in its individual capacity but solely as
Institutional Trustee for Tidelands Statutory
Trust II, a Delaware statutory trust, or registered assigns, the
principal amount of Six Million One Hundred
Eighty-Six Thousand Dollars ($6,186,000) on June 30, 2038 (the “Maturity Date”) (or any Optional
Redemption Date or the Special Redemption Date, each as defined herein, or any
earlier date of acceleration of the maturity of this Debt Security), and to pay
interest on the outstanding principal amount of this Debt Security from June 20, 2008, or from the most recent
Interest Payment Date (as defined below) to which interest has been paid or
duly provided for, quarterly (subject to deferral as set forth herein) in
arrears on March 30, June 30, September 30
and December 30 of each year, commencing on September 30, 2008
(each, an “Interest Payment Date”), at a per annum rate (the “Interest Rate”)
equal to (i) with respect to any Interest Period (as defined in the
Indenture) prior to the Interest Period commencing on Interest Payment Date (as
defined in the Indenture) in June 2013, 9.425%, and (ii) with respect
to any Interest Period commencing on or after the Interest Payment Date in June 2013,
LIBOR (as defined in the Indenture), as determined on the LIBOR Determination
Date (as defined in the Indenture) for such Interest Period plus 5.075%% (the “Interest Rate”) (provided
that the Interest Rate for any Interest Period commencing on or after the
Interest Payment Date in June 2013 may not exceed the highest rate
permitted by New York law, as the same may be modified by United States law of
general application) until the principal hereof shall have been paid or duly
provided for, and on any overdue principal and (without duplication and to the
extent that payment of such interest is enforceable under applicable law) on
any overdue installment of interest at an annual rate equal to the then applicable
Interest Rate, compounded quarterly.  The
amount of interest payable shall be computed with respect to any Interest
Period prior to the Interest Period commencing on the Interest Payment Date in June 2013,
on the basis of a 360-day year consisting of twelve 30-day months and (ii) with
respect to any Interest Period commencing on or after the Interest Payment Date
in June 2013, on the basis of a 360-day year and the actual number of days
elapsed in such Interest Period.


 


The interest installment so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
the Indenture, be paid to the Person in whose name this Debt Security (or one
or more Predecessor Securities, as defined in the Indenture) is registered at
the close of business on the “regular record date” for such interest
installment, which shall be the fifteenth day prior to such Interest Payment
Date, whether or not such day is a Business Day (as defined herein).  Any such interest installment (other than Deferred
Interest (as defined herein)) not punctually paid or duly provided for shall
forthwith cease to be payable to the holders on such regular record date and
may be paid to the Person in whose name this Debt Security (or one or more
Predecessor Securities) is registered at the close of business on a special
record date to be fixed by the Trustee for the payment of such defaulted
interest, notice whereof 


 


A-4





















 


shall be given to the
holders of the Debt Securities not less than 10 days prior to such special
record date, all as more fully provided in the Indenture.


 


Payment of the principal of and premium, if any, and
interest on this Debt Security due on the Maturity Date, any Optional
Redemption Date or the Special Redemption Date, as the case may be, shall be
made in immediately available funds against presentation and surrender of this
Debt Security at the office or agency of the Trustee maintained for that
purpose in Wilmington, Delaware, or at the office or agency of any other Paying
Agent appointed by the Company maintained for that purpose in Wilmington,
Delaware.  Payment of interest on this
Debt Security due on any Interest Payment Date other than the Maturity Date,
any Optional Redemption Date or the Special Redemption Date, as the case may
be, shall be made at the option of the Company by check mailed to the holder
thereof at such address as shall appear in the Debt Security Register or by
wire transfer of immediately available funds to an account appropriately
designated by the holder hereof. 
Notwithstanding the foregoing, so long as the holder of this Debt
Security is the Institutional Trustee, payment of the principal of and premium,
if any, and interest on this Debt Security shall be made in immediately
available funds when due at such place and to such account as may be designated
by the Institutional Trustee.  All
payments in respect of this Debt Security shall be payable in any coin or
currency of the United States of America that at the time of payment is legal
tender for payment of public and private debts.


 


Notwithstanding anything to the contrary contained
herein, if any Interest Payment Date after the Interest Payment Date in June 2013,
other than the Maturity Date, any Optional Redemption Date or the Special
Redemption Date, falls on a day that is not a Business Day, then any interest
payable will be paid on, and such Interest Payment Date will be moved to, the
next succeeding Business Day, and additional interest will accrue for each day
that such payment is delayed as a result thereof.  If any Interest Payment Date on or prior to
the Interest Payment Date in June 2013, the Maturity Date, any Optional
Redemption Date or the Special Redemption Date falls on a day that is not a
Business Day, then the principal, premium, if any, and/or interest payable on
such date will be paid on the next succeeding Business Day, and no additional
interest will accrue in respect of such payment made on such next succeeding
Business Day.


 


So long as no Event of Default pursuant to Sections
5.01(b), (e), (f), (g), (h) or (i) of the Indenture has occurred and
is continuing, the Company shall have the right, from time to time and without
causing an Event of Default, to defer payments of interest on the Debt
Securities by extending the interest payment period on the Debt Securities at
any time and from time to time during the term of the Debt Securities, for up
to 20 consecutive quarterly periods (each such extended interest payment
period, together with all previous and further consecutive extensions thereof,
is referred to herein as an “Extension Period”).  No Extension Period may end on a date other
than an Interest Payment Date or extend beyond the Maturity Date, any Optional
Redemption Date or the Special Redemption Date, as the case may be.  During any Extension Period, interest will
continue to accrue on the Debt Securities, and interest on such accrued
interest (such accrued interest and interest thereon referred to herein as
“Deferred Interest”) will accrue at an annual rate equal to the Interest Rate
applicable during such Extension Period, compounded quarterly from the date
such Deferred Interest would have been payable were it not for the Extension
Period, to the extent permitted by applicable law.  No 


 


A-5





















 


interest or Deferred
Interest (except any Additional Amounts (as defined in the Indenture) that may
be due and payable) shall be due and payable during an Extension Period, except
at the end thereof.  At the end of any
Extension Period, the Company shall pay all Deferred Interest then accrued and
unpaid on the Debt Securities; provided, however, that during any
Extension Period, the Company may 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 Company’s capital stock, (ii) make any payment
of principal of or premium, if any, or interest on or repay, repurchase or
redeem any debt securities of the Company that rank pari passu
in all respects with or junior in interest to the Debt Securities or (iii) make
any payment under any guarantees of the Company that rank in all respects pari passu with or junior in respect to the Capital
Securities Guarantee   (other than (a) repurchases,
redemptions or other acquisitions of shares of capital stock of the Company (A) in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of one or more employees, officers,
directors or consultants, (B) in connection with a dividend reinvestment
or stockholder stock purchase plan or (C) in connection with the issuance
of capital stock of the Company (or securities convertible into or exercisable
for such capital stock), as consideration in an acquisition transaction entered
into prior to such Extension Period, (b) as a result of any exchange or
conversion of any class or series of the Company’s capital stock (or any
capital stock of a subsidiary of the Company) for any class or series of the
Company’s capital stock or of any class or series of the Company’s indebtedness
for any class or series of the Company’s capital stock, (c) the purchase
of fractional interests in shares of the Company’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 stockholder’s rights plan, or the issuance of rights, stock
or other property under any stockholder’s rights plan, or the redemption or
repurchase of rights pursuant thereto or (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).  Prior to
the termination of any Extension Period, the Company may further extend such
Extension Period, provided, that no Extension Period (including all
previous and further consecutive extensions that are part of such Extension
Period) shall exceed 20 consecutive quarterly periods.  Upon the termination of any Extension Period
and upon the payment of all Deferred Interest, the Company may commence a new
Extension Period, subject to the foregoing requirements.  The Company must give the Trustee notice of
its election to begin or extend an Extension Period no later than the close of
business on the fifteenth Business Day prior to the applicable Interest Payment
Date.


 


The indebtedness evidenced by this Debt Security is,
to the extent provided in the Indenture, subordinate and junior in right of
payment to the prior payment in full of all Senior Indebtedness (as defined in
the Indenture), and this Debt Security is issued subject to the provisions of
the Indenture with respect thereto.  Each
holder of this Debt Security, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee
on such holder’s behalf to take such action as may be necessary or appropriate
to acknowledge or effectuate the subordination so provided and (c) appoints
the Trustee such holder’s attorney-in-fact for any and all such purposes.  Each holder hereof, by such holder’s
acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder
of Senior Indebtedness, whether now outstanding or hereafter incurred, and
waives reliance by each such holder upon said provisions.


 


A-6





















 


The Company waives diligence, presentment, demand for
payment, notice of nonpayment, notice of protest, and all other demands and
notices.


 


This Debt Security shall not be entitled to any
benefit under the Indenture hereinafter referred to and shall not be valid or
become obligatory for any purpose until the certificate of authentication
hereon shall have been signed by or on behalf of the Trustee.


 


The provisions of this
Debt Security are continued on the reverse side hereof and such continued
provisions shall for all purposes have the same effect as though fully set
forth at this place.


 


This Debt Security may
contain more than one counterpart of the signature page and this Debt
Security may be executed and authenticated by the affixing of the signature of
a proper officer of the Company, and the signature of the Trustee providing
authentication, 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
the Company had executed, and the Trustee had authenticated, a single signature
page.


 


A-7





















 


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


 


	
   

  	
  TIDELANDS BANCSHARES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


 


Dated: 
                                            ,       


 


 


CERTIFICATE OF AUTHENTICATION


 


 


This certificate represents Debt Securities referred
to in the within-mentioned Indenture.


 


	
   

  	
  WILMINGTON TRUST
  COMPANY,

  
	
   

  	
  not in its individual
  capacity but solely as

  
	
   

  	
  the Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Officer

  



 


Dated: 
                                            ,


 


A-8





















 


[FORM OF
REVERSE OF SECURITY]


 


This Debt Security is one of a duly authorized series
of debt securities of the Company (collectively, the “Debt Securities”), all
issued or to be issued pursuant to an Indenture (the “Indenture”), dated as of June 20, 2008, duly executed and delivered
between the Company and Wilmington Trust Company, as Trustee (the “Trustee”),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Trustee, the Company and the holders of
the Debt Securities of which this Debt Security is a part.


 


Upon the occurrence and continuation of a Tax Event,
an Investment Company Event or a Capital Treatment Event (each, a “Special
Event”), the Company shall have the right to redeem this Debt Security, at its
option, in whole with all other Debt Securities but not in part, at any time,
within 90 days following the occurrence of such Special Event (the “Special
Redemption Date”), at the Special Redemption Price (as defined herein).


 


The Company shall also have the right to redeem this
Debt Security at its option, in whole or (provided that all accrued and unpaid
interest has been paid on all Debt Securities for all Interest Periods
terminating on or prior to such date) from time to time in part, on any
Interest Payment Date on or after June 30,
2013 (each, an “Optional Redemption Date”), at the Optional Redemption
Price (as defined herein).


 


Any redemption pursuant to the preceding two paragraphs
will be made, subject to receipt by the Company of prior approval from the
Board of Governors of the Federal Reserve System (the “Federal Reserve”) if
then required under applicable capital guidelines or policies of the Federal
Reserve, upon not less than 30 days’ nor more than 60 days’ prior written
notice.  If the Debt Securities are only
partially redeemed by the Company, the Debt Securities will be redeemed pro
rata or by any other method utilized by the Trustee.  In the event of redemption of this Debt
Security in part only, a new Debt Security or Debt Securities for the
unredeemed portion hereof will be issued in the name of the holder hereof upon
the cancellation hereof.


 


“Optional Redemption Price” means an amount in cash
equal to 100% of the principal amount of this Debt Security being redeemed plus
unpaid interest accrued thereon to the related Optional Redemption Date.


 


“Special Redemption Price” means, with respect to the
redemption of any Debt Security following a Special Event, an amount in cash
equal to the percentage of the principal amount of the Debt Securities that is
specified below for the Special Redemption Date plus, in each case, unpaid
interest accrued thereon to the Special Redemption Date:


 


	
  Special Redemption During the 12-Month

  Period Beginning June 30,

  	
   

  	
  Percentage of Principal Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2008

  	
   

  	
  104.125

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  2009

  	
   

  	
  103.30

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  2010

  	
   

  	
  102.48

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  2011

  	
   

  	
  101.65

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  2012

  	
   

  	
  100.83

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  2013

  	
   

  	
  100

  	
  %

  



 


A-9





















 


In case an Event of Default, as defined in the
Indenture, shall have occurred and be continuing, the principal of all of the
Debt Securities may be declared, and, in certain cases, shall ipso  facto
become, due and payable, and upon any such declaration of acceleration shall
become due and payable, in each case, in the manner, with the effect and
subject to the conditions provided in the Indenture.


 


The Indenture contains provisions permitting the
Company and the Trustee, with the consent of the holders of a majority in aggregate
principal amount of the Debt Securities at the time outstanding affected
thereby, as specified in the Indenture, to execute supplemental indentures for
the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or of modifying in any manner the rights of the holders of the Debt
Securities; provided, however, that no such supplemental
indenture shall, among other things, without the consent of the holders of each
Debt Security then outstanding and affected thereby (i) change the
Maturity Date of any Debt Security, or reduce the principal amount thereof or
any premium thereon, or reduce the rate (or manner of calculation of the rate)
or extend the time of payment of interest thereon, or reduce (other than as a
result of the maturity or earlier redemption of any such Debt Security in
accordance with the terms of the Indenture and such Debt Security) or increase
the aggregate principal amount of Debt Securities then outstanding, or change
any of the redemption provisions, or make the principal thereof or any interest
or premium thereon payable in any coin or currency other than United States
Dollars, or impair or affect the right of any holder to institute suit for payment
thereof, or (ii) reduce the aforesaid percentage of Debt Securities the
holders of which are required to consent to any such supplemental
indenture.  The Indenture also contains
provisions permitting the holders of a majority in aggregate principal amount
of the Debt Securities at the time outstanding, on behalf of the holders of all
the Debt Securities, to waive any past default in the performance of any of the
covenants contained in the Indenture, or established pursuant to the Indenture,
and its consequences, except (a) a default in payments due in respect of
any of the Debt Securities, (b) in respect of covenants or provisions of
the Indenture which cannot be modified or amended without the consent of the
holder of each Debt Security affected, or (c) in respect of the covenants
of the Company relating to its ownership of Common Securities of the
Trust.  Any such consent or waiver by the
holder of this Debt Security (unless revoked as provided in the Indenture) shall
be conclusive and binding upon such holder and upon all future holders and
owners of this Debt Security and of any Debt Security issued in exchange
herefor or in place hereof (whether by registration of transfer or otherwise),
irrespective of whether or not any notation of such consent or waiver is made
upon this Debt Security.


 


A-10





















 


No reference herein to the Indenture and no provision
of this Debt Security or of the Indenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to make all payments due
on this Debt Security at the time and place and at the rate and in the money
herein prescribed.


 


As provided in the Indenture and subject to certain
limitations herein and therein set forth, this Debt Security is transferable by
the holder hereof on the Debt Security Register (as defined in the Indenture)
of the Company, upon surrender of this Debt Security for registration of
transfer at the office or agency of the Trustee in Wilmington, Delaware, or at
any other office or agency of the Company in Wilmington, Delaware, accompanied
by a written instrument or instruments of transfer in form satisfactory to the
Company or the Trustee duly executed by the holder hereof or such holder’s
attorney duly authorized in writing, and thereupon one or more new Debt
Securities of authorized denominations and for the same aggregate principal
amount will be issued to the designated transferee or transferees.  No service charge will be made for any such
registration of transfer, but the Company or the Trustee may require payment of
a sum sufficient to cover any tax, fee or other governmental charge payable in
relation thereto as specified in the Indenture.


 


Prior to due presentment for registration of transfer
of this Debt Security, the Company, the Trustee, any Authenticating Agent, any
Paying Agent, any transfer agent and the Debt Security registrar may deem and
treat the holder hereof as the absolute owner hereof (whether or not this Debt
Security shall be overdue and notwithstanding any notice of ownership or
writing hereon) for the purpose of receiving payment of the principal of and
premium, if any, and interest on this Debt Security and for all other purposes,
and none of the Company, the Trustee, any Authenticating Agent, any Paying
Agent, any transfer agent or any Debt Security registrar shall be affected by
any notice to the contrary.


 


As provided in the Indenture and subject to certain
limitations herein and therein set forth, Debt Securities are exchangeable for
a like aggregate principal amount of Debt Securities of different authorized
denominations, as requested by the holder surrendering the same.


 


The Debt Securities are issuable only in registered
certificated form without coupons.


 


No recourse shall be had for the payment of the
principal of or premium, if any, or interest on this Debt Security, or for any
claim based hereon, or otherwise in respect hereof, or based on or in respect
of the Indenture, against any incorporator, stockholder, officer, director, employee
or agent, past, present or future, as such, of the Company or of any
predecessor or successor corporation of the Company, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.


 


All terms used but not defined in this Debt Security
shall have the meanings assigned to them in the Indenture.


 


A-11





















 


THIS DEBT SECURITY SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES OF SAID STATE OTHER THAN SECTION 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS LAW.


 


A-12




















 


EXHIBIT B


 


FORM OF CERTIFICATE OF OFFICER OF THE COMPANY


 


Pursuant
to Section 3.05 of the Indenture, dated as of June 20, 2008 (as
amended or supplemented from time to time, the “Indenture”), between Tidelands
Bancshares, Inc., as issuer (the “Company”), and Wilmington Trust Company,
as trustee, the undersigned certifies that he/she is a [principal executive
officer, principal financial officer or principal accounting officer] of the
Company and in the course of the performance by the undersigned of his/her
duties as an officer of the Company, the undersigned would normally have
knowledge of any default by the Company in the performance of any covenants
contained in the Indenture, and the undersigned hereby further certifies that
he/she has no knowledge of any default for the fiscal year ending on
                    ,
20       [, except as follows: specify each such default and the nature thereof].


 


Capitalized
terms used herein, and not otherwise defined herein, have the respective
meanings assigned thereto in the Indenture.


 


IN
WITNESS WHEREOF, the undersigned has executed this Certificate as of


 


                        ,
20        .


 


 


	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


B-1

















 


EXHIBIT C


 


Form of
Officer’s Financial Certificate


 


The undersigned, the
[Chief Financial Officer] [Treasurer] [Executive Vice President] hereby
certifies, pursuant to Section 4.03(c) of the Indenture, dated as of June 20,
2008, among Tidelands Bancshares, Inc. (the “Company”), Wilmington Trust
Company, as property trustee, Wilmington Trust Company, as Delaware trustee and
the administrators named therein, that, as of
                          ,
20          , the Company had
the following ratios and balances:


 


[BANK] HOLDING COMPANY


 


As of [Quarterly Financial
Dates]


 


	
  Tier 1 Risk
  Weighted Assets

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Ratio of Double
  Leverage

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Non-Performing
  Assets to Loans and OREO

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Tangible Common
  Equity as a Percentage of Tangible Assets

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Ratio of
  Reserves to Non-Performing Loans

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Ratio of Net
  Charge-Offs to Loans

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Return on
  Average Assets (annualized)

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Net Interest
  Margin (annualized)

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Efficiency Ratio

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Ratio of Loans
  to Assets

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Ratio of Loans
  to Deposits

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Double Leverage
  (exclude trust preferred as equity)

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Assets

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Year to Date
  Income

  	
   

  	
  $

  	
   

  	
   

  



 


C-1

















 






*A table describing the
quarterly report calculation procedures is attached.


 


[FOR FISCAL
YEAR END: Attached hereto are the audited consolidated financial
statements (including the balance sheet, income statement and statement of cash
flows, and notes thereto, together with the report of the independent
accountants thereon) of the Company and its consolidated subsidiaries for the
three years ended
                            ,
20          .]


 


[FOR FISCAL
QUARTER END: Attached hereto are the unaudited consolidated and
consolidating financial statements (including the balance sheet and income statement)
of the Company and its consolidated subsidiaries for the fiscal quarter and
[six/nine] month period ended
                            ,
20          ].


 


The financial statements
fairly present in all material respects, in accordance with U.S. generally
accepted accounting principals (“GAAP”), the financial position of the Company
and its consolidated subsidiaries, and the results of operations and changes in
financial condition as of the date, and for the
[           quarter interim]
[annual] period ended
                          ,
20          , and such
financial statements have been prepared in accordance with GAAP consistently
applied throughout the period involved (except as otherwise noted therein).


 


C-2

















 


IN WITNESS WHEREOF, the
undersigned has executed this Officer’s Certificate as of this
           day of
                                    ,
20          .


 


 


	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Tidelands
  Bancshares, Inc.

  
	
   

  	
  875 Lowcountry
  Boulevard

  
	
   

  	
  Mt. Pleasant, SC 29464

  
	
   

  	
  (843) 388-8433

  



 


C-3

















 


Financial Definitions


 


	
  Report

  Item

  	
   

  	
  Corresponding FRY-9C or LP Line Items with line Item

  corresponding Schedules

  	
   

  	
  Description of

  Calculation

  
	
  Tier
  1 Risk Weighted Assets

  	
   

  	
  BHCK7206

  Schedule HC-R

  	
   

  	
  Tier
  1 Risk Ratio: core Capital (Tier 1)/Risk-Adjusted Assets

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ratio
  of Double Leverage

  	
   

  	
  (BHCP0365)/(BCHCP3210)

  Schedule PC in the LP

  	
   

  	
  Total
  equity investments in subsidiaries divided by the total equity capital. This
  field is calculated at the parent company level. “Subsidiaries” include bank,
  bank holding company, and non-bank subsidiaries.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Non-Performing
  Assets to Loans and OREO

  	
   

  	
  (BHCK5525-BHCK3506+BHCK5526-BHCK3507+/BHCK2744/(BHCK2122+BHCK2744)
  Schedules HC-C, HC-M & HC-N

  	
   

  	
  Total
  Nonperforming Assets  (NPLs+Foreclosed
  Real Estate+Other Nonaccrual & Repossessed Assets)/Total
  Loans+Foreclosed Real Estate

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tangible
  Common Equity as a Percentage of Tangible Assets

  	
   

  	
  (BHDM3210-BHCK3163)/BHCK2170-BHCK3163)

  Schedule HC

  	
   

  	
  (Equity
  Capital – Goodwill)/(Total Assets – Goodwill)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ratio
  of Reserves to Non-Performing loans

  	
   

  	
  (BHCK3123+BHCK3128)/(BHCK5525-BHCK3506+BHCK5526-BHCK3507)

  Schedules HC &
  HC-N & HC-R

  	
   

  	
  Total
  Loan Loss and Allocated Transfer Risk Reserves/Total Nonperforming Loans
  (Nonaccrual + Restructured)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ratio
  of Net Charge-Offs to Loans

  	
   

  	
  (BHCK4635-BHCK4605)/(BHCK3516)

  Schedules HI-B & HC-K

  	
   

  	
  Net
  charge offs for the period as a percentage of average loans.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Return
  on Average Assets (annualized)

  	
   

  	
  (BHCK4340/BHCK3368)

  Schedules HI & HC-K

  	
   

  	
  Net
  Income as a percentage of Assets.

  



 


C-4

















 


	
  Report

  Item

  	
   

  	
  Corresponding FRY-9C or LP Line Items with line Item

  corresponding Schedules

  	
   

  	
  Description of

  Calculation

  
	
  Net
  Interest Margin (annualized)

  	
   

  	
  (BHCK4519/(BHCK3515+BHCK3365+BHCK3516+BHCK3401+BHCKB985)

  Schedules HI Memorandum and
  HC-K

  	
   

  	
  (Net
  Interest Income Fully Taxable Equivalent, if available/Average Earning
  Assets)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Efficiency
  Ration

  	
   

  	
  (BHCK4093)/(BHCK4519+BHCK4079)

  Schedule HI

  	
   

  	
  (Non-interest
  Expense)/(Net Interest Income Fully Taxable Equivalent, if available, plus
  Non-interest Income)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ratio
  of Loans to Assets

  	
   

  	
  (BHCKB528+BHCK5369)/(BHCK2170)

  Schedule HC

  	
   

  	
  Total
  Loans & Leases (Net of Unearned Income & Gross of
  Reserve)/Total Assets

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ratio
  of Loans to Deposits

  	
   

  	
  (BHCKB528+BHCK5369)/(BHDM6631+BHDM6636+BHFN6631+BHFN6636)

  Schedule HC

  	
   

  	
  Total
  Loans & Leases (Net of Unearned Income & Gross of
  Reserve)/Total Deposits (Includes Domestic and Foreign Deposits)

  



 


C-5

















 


	
  Report

  Item

  	
   

  	
  Corresponding FRY-9C or LP Line Items with line Item

  corresponding Schedules

  	
   

  	
  Description of

  Calculation

  
	
  Total
  Assets

  	
   

  	
  (BHCK2170)

  Schedule HC

  	
   

  	
  The
  sum of total assets. Includes cash and balances due from depository
  institutions; securities; federal funds sold and securities purchased under
  agreements to resell; loans and lease financing receivables; trading assets;
  premises and fixed assets; other real estate owned; investments in
  unconsolidated subsidiaries and associate companies; customer’s liability on
  acceptances outstanding; intangible assets; and other assets.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net
  Income

  	
   

  	
  (BHCK4300)
  Schedule HI

  	
   

  	
  The
  sum of income (loss) before extraordinary items and other adjustments and
  extraordinary items; and other adjustments, net of income taxes.

  



 


C-6