Document:

Indenture between Registrant and Wells Fargo Bank

 Exhibit 4.1 
 BANK OF THE CAROLINAS CORPORATION 
 as Company 
 INDENTURE 
 Dated as of March 26, 2008 
 WELLS FARGO BANK, NATIONAL ASSOCIATION 
 As
Trustee 
 JUNIOR SUBORDINATED DEBT SECURITIES 
 Due June 15, 2038 

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	 ARTICLE I
 DEFINITIONS

			
	SECTION 1.01.	  	Definitions	  	1
	
	 ARTICLE II
 DEBT SECURITIES

			
	SECTION 2.01.	  	Authentication and Dating	  	9
			
	SECTION 2.02.	  	Form of Trustee’s Certificate of Authentication	  	9
			
	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	  	10
			
	SECTION 2.06.	  	Mutilated, Destroyed, Lost or Stolen Debt Securities	  	13
			
	SECTION 2.07.	  	Temporary Debt Securities	  	14
			
	SECTION 2.08.	  	Payment of Interest	  	15
			
	SECTION 2.09.	  	Cancellation of Debt Securities Paid, etc	  	16
			
	SECTION 2.10.	  	Computation of Interest	  	16
			
	SECTION 2.11.	  	Extension of Interest Payment Period	  	18
			
	SECTION 2.12.	  	CUSIP Numbers	  	19
			
	SECTION 2.13.	  	Income Tax Certification	  	19
			
	SECTION 2.14.	  	Global Debentures	  	19
	
	 ARTICLE III
 PARTICULAR COVENANTS OF THE COMPANY

			
	SECTION 3.01.	  	Payment of Principal, Premium and Interest; Agreed Treatment of the Debt Securities	  	21
			
	SECTION 3.02.	  	Offices for Notices and Payments, etc	  	22
			
	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 Interest	  	24
			
	SECTION 3.07.	  	Compliance with Consolidation Provisions	  	24
			
	SECTION 3.08.	  	Limitation on Dividends	  	25
			
	SECTION 3.09.	  	Covenants as to the Trust	  	25

  

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 TABLE OF CONTENTS 
 (CONTINUED) 
  

					
	 	  	 	  	Page
	 ARTICLE IV
 LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

			
	SECTION 4.01.	  	Securityholders’ Lists	  	26
			
	SECTION 4.02.	  	Preservation and Disclosure of Lists	  	26
			
	SECTION 4.03.	  	Financial and Other Information	  	27
	
	 ARTICLE V
 REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS UPON AN EVENT OF
 DEFAULT

			
	SECTION 5.01.	  	Events of Default	  	28
			
	SECTION 5.02.	  	Payment of Debt Securities on Default; Suit Therefor	  	30
			
	SECTION 5.03.	  	Application of Moneys Collected by Trustee	  	31
			
	SECTION 5.04.	  	Proceedings by Securityholders	  	32
			
	SECTION 5.05.	  	Proceedings by Trustee	  	32
			
	SECTION 5.06.	  	Remedies Cumulative and Continuing	  	33
			
	SECTION 5.07.	  	Direction of Proceedings and Waiver of Defaults by Majority of Securityholders	  	33
			
	SECTION 5.08.	  	Notice of Defaults	  	34
			
	SECTION 5.09.	  	Undertaking to Pay Costs	  	34
	
	 ARTICLE VI
 CONCERNING THE TRUSTEE

			
	SECTION 6.01.	  	Duties and Responsibilities of Trustee	  	35
			
	SECTION 6.02.	  	Reliance on Documents, Opinions, etc	  	36
			
	SECTION 6.03.	  	No Responsibility for Recitals, etc	  	37
			
	SECTION 6.04.	  	Trustee, Authenticating Agent, Paying Agents, Transfer Agents or Registrar May Own Debt Securities	  	37
			
	SECTION 6.05.	  	Moneys to be Held in Trust	  	37
			
	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, Calculation Agent, Paying Agent or Debt Security Registrar	  	39
			
	SECTION 6.10.	  	Acceptance by Successor	  	41

  

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 TABLE OF CONTENTS 
 (CONTINUED) 
  

					
	 	  	 	  	Page
	SECTION 6.11.	  	Succession by Merger, etc	  	42
			
	SECTION 6.12.	  	Authenticating Agents	  	42
	
	 ARTICLE VII
 CONCERNING THE SECURITYHOLDERS

			
	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 Securityholders Bound	  	45
	
	 ARTICLE VIII
 SECURITYHOLDERS’ MEETINGS

			
	SECTION 8.01.	  	Purposes of Meetings	  	45
			
	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	  	46
			
	SECTION 8.05.	  	Regulations	  	47
			
	SECTION 8.06.	  	Voting	  	47
			
	SECTION 8.07.	  	Quorum; Actions	  	48
			
	SECTION 8.08.	  	Written Consent Without a Meeting	  	48
	
	 ARTICLE IX
 SUPPLEMENTAL INDENTURES

			
	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
			
	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

			
	SECTION 10.01.	  	Optional Redemption	  	52
			
	SECTION 10.02.	  	Special Event Redemption	  	52

  

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 TABLE OF CONTENTS 
 (CONTINUED) 
  

					
	 	  	 	  	Page
	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

			
	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

			
	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

			
	SECTION 13.01.	  	Indenture and Debt Securities Solely Corporate Obligations	  	57
	
	 ARTICLE XIV
 MISCELLANEOUS PROVISIONS

			
	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.	  	Non-Business Days	  	58
			
	SECTION 14.08.	  	Table of Contents, Headings, etc	  	59
			
	SECTION 14.09.	  	Execution in Counterparts	  	59
			
	SECTION 14.10.	  	Severability	  	59
			
	SECTION 14.11.	  	Assignment	  	59
			
	SECTION 14.12.	  	Acknowledgment of Rights	  	59

  

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 TABLE OF CONTENTS 
 (CONTINUED) 
  

					
	 	  	 	  	Page
	 ARTICLE XV
 SUBORDINATION OF DEBT SECURITIES

			
	SECTION 15.01.	  	Agreement to Subordinate	  	60
			
	SECTION 15.02.	  	Default on Senior Indebtedness	  	60
			
	SECTION 15.03.	  	Liquidation; Dissolution; Bankruptcy	  	61
			
	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	  	64
			
	SECTION 15.08.	  	Subordination May Not Be Impaired	  	64
			
	EXHIBITS	  		  	
			
	EXHIBIT A	  	FORM OF DEBT SECURITY	  	

  

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 THIS INDENTURE, dated as of March 26, 2008, between Bank of the Carolinas Corporation, a bank
holding company incorporated in North Carolina (hereinafter sometimes called the “Company”), and Wells Fargo Bank, National Association 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 Junior Subordinated Debt Securities due June 15, 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 Interest” shall have the meaning set forth in Section 3.06. 
 “Additional Provisions” shall
have the meaning set forth in Section 15.01. 
 “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. 
 “Business Day” means any day other than a Saturday, Sunday or any other day on which banking institutions in Wilmington, Delaware, New York
City or the city of the Principal Office of the Trustee or the Company are permitted or required by any applicable 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 “TP Securities” 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. The Capital Securities sold by the Trust to the initial purchaser(s) pursuant to the Placement Agreement and
the Capital Securities Purchase Agreement(s) shall be issued in book entry form, registered in the name of Cede & Co., as nominee on behalf of the Depository Trust Company, without coupons, and held by the Institutional Trustee as custodian
for the Depository Trust Company. 
 “Capital Securities Guarantee” means the guarantee agreement that the Company will enter into
with Wells Fargo Bank, National Association 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 (a) any amendment to, or change in, the laws, rules or regulations of the United States or any political subdivision thereof or therein, or any rules, guidelines
or policies of any applicable regulatory authority for the Company or (b) 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, within 90 days of the receipt of such opinion, the aggregate Liquidation Amount of
the Capital Securities will not be eligible to be treated by the Company 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 or financial holding companies), as then in effect and applicable to the Company (or if the Company is not a bank holding company, such guidelines applied to the Company as if the Company were subject to such guidelines);
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 cumulative preferred stock, minority interests in consolidated subsidiaries, or any other 

  

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class of security or interest which the Federal Reserve or OTS, as applicable, may now or hereafter accord Tier 1 Capital treatment in excess of the
amount which may now or hereafter qualify for treatment as Tier 1 Capital under applicable capital adequacy guidelines; provided further, however, that the distribution of 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. 
 “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. 
 “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 Bank of the Carolinas Corporation, a bank holding company incorporated in North 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. 
 “Debt Security Registrar” has the meaning specified in Section 2.05. 
 “Declaration” means the Amended and Restated Declaration of Trust of the Trust dated as of March 26, 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 or
any successor thereto. DTC will be the initial Depositary. 
 “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 the Depositary. 
 “DTC” means The Depository Trust Company, a New York corporation. 
  

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 “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 from time to time, or any successor legislation. 
 “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 security that evidences all or part of the Debt Securities, the ownership and transfers of which shall be made
through book entries by a Depositary. 
 “Indenture” means this instrument as originally executed or, if amended or supplemented as
herein provided, as so amended or supplemented, or both. 
 “Initial Purchaser” means the initial purchaser of the Capital
Securities. 
 “Institutional Trustee” has the meaning set forth in the Declaration. 
 “Interest Payment Date” means March 15, June 15, September 15 and December 15 of each year, commencing on
June 15, 2008, during the term of this Indenture. 
 “Interest Payment Period” means the period from and including an Interest
Payment Date, or in the case of the first Interest Payment Period, the original date of issuance of the Debt Securities, to, but excluding, the next succeeding Interest Payment Date or, in the case of the last Interest Payment Period, the Redemption
Date, Special Redemption Date or Maturity Date, as the case may be. 
 “Interest Rate” means, with respect to any Interest Payment
Period, a per annum rate of interest, equal to LIBOR, as determined on the LIBOR Determination Date for such Interest Payment Date, plus 3.0%; provided, however, that the Interest Rate for any Interest Payment Period may not exceed the highest rate
permitted by New York law, as the same may be modified by United States law of general applicability. 
 “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 or prospective change becomes effective or would become effective, as the case may be, on or after the date of the original issuance of the Debt Securities. 

 

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 “LIBOR” means the London Interbank Offered Rate for 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)(1). 
 “LIBOR Business Day” has the meaning set forth in Section 2.10(b)(1). 
 “LIBOR Determination Date” has the meaning set forth in Section 2.10(b). 
 “Liquidation Amount” means the liquidation amount of $1,000 per Trust Security. 
 “Maturity Date” means June 15, 2038. 
 “Notice” has the meaning set forth in Section 2.11. 
 “Officers’ Certificate” means a certificate
signed by the Chairman of the Board, the Vice Chairman, 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 an employee of or 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. 
 “OTS” means the Office of Thrift Supervision and any successor federal agency that is primarily responsible for regulating the activities of
savings and loan holding companies. 
 “Outstanding” means, when used with reference to Debt Securities, subject to the provisions
of Section 7.04, 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. 
  

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 “Paying Agent” has the meaning set forth in Section 3.04(e). 
 “Person” means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision thereof. 
 “Placement Agent” means Silverton
Capital Corporation. 
 “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 919 North
Market Street, Suite 1600, Wilmington, Delaware 19801, Attn: Corporate Trust Division – Bank of the Carolinas Trust I. 
 “Redemption Date” has the meaning set forth in Section 10.01. 
 “Redemption Price” means 100% of the
principal amount of the Debt Securities being redeemed plus accrued and unpaid interest on such Debt Securities to the Redemption Date. 
 “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 from time to time, or any successor legislation. 
 “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. 
 “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 and (B) indebtedness evidenced by securities, debentures, notes, bonds or other similar 

  

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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 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, 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 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 and in the Declaration, (B) any guarantees of the Company in respect of the equity or other securities of any financing entity
referred to in clause (A) above or (C) any other instruments classified as subordinated or pari passu to the Debt Securities by the Federal Reserve from time to time hereafter. 
 “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
103.525% of the principal amount of Debt Securities to be redeemed prior to June 15, 2009 and thereafter 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 15
	  	Percentage of Principal
Amount	 
	 2009
	  	102.820	%
	 2010
	  	102.115	%
	 2011
	  	101.410	%
	 2012
	  	100.705	%
	 2013 and thereafter
	  	100.000	%

  

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 “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 by 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 by 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. 
 “Trust” means Bank of the Carolinas Trust I, 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 Bank of the Carolinas Trust
I. 
  

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 “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 Internal Revenue Code of 1986, as amended. 
 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 $5,155,000 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 Trustee shall also be entitled to receive an opinion of counsel to the effect that (1) all conditions precedent to the execution, delivery and authentication of the Debt Securities have been
complied with; (2) the Debt Securities are not required to be registered under the Securities Act; and (3) the Indenture is not required to be qualified under the Trust Indenture Act. 
 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. 
 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 represents Debt Securities referred to in the within-mentioned Indenture. 
  

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 Wells Fargo Bank, National Association, not in its individual capacity but solely as Trustee 

 

			
	By	 	  

		 	Authorized Signatory

 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, certificated 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 any 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 the Trustee has no
duty to determine), 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 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
Securityholder 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 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 Trustee, in its capacity
as “Debt Security Registrar”, 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 

  

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hereunder in which, subject to such reasonable regulations as it may prescribe, the Debt Security Registrar 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 Securityholder or such Securityholder’s attorney duly authorized in writing. 
 Neither the Trustee nor the Debt Security Registrar shall be responsible for ascertaining whether any transfer hereunder complies with the registration
provisions of or any exemptions from the Securities Act (under and as defined in the Declaration), applicable state securities laws or the applicable laws of any other jurisdiction, ERISA, the United States Internal Revenue Code of 1986, as amended,
or the Investment Company Act (under and as defined in the Declaration). 
 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. 
 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 except in
compliance with the restricted securities legend set forth below, unless otherwise determined by the Company in accordance with applicable law, which legend shall be placed on each Debt Security: 
  

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 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 BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY 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) TO A “NON U.S. PERSON” IN AN “OFFSHORE TRANSACTION” PURSUANT TO
REGULATION S UNDER THE SECURITIES ACT, (D) 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) OR (7) OF
RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY 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, 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
CLAUSES (D) OR (E) 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
BY ITS ACCEPTANCE HEREOF AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS. 
 THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
AGREES, REPRESENTS AND WARRANTS THAT IT WILL NOT ENGAGE IN HEDGING TRANSACTIONS INVOLVING THIS SECURITY UNLESS SUCH TRANSACTIONS ARE IN COMPLIANCE WITH THE SECURITIES ACT OR AN APPLICABLE EXEMPTION THEREFROM. 
 THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT
ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), (EACH A
“PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY AND NO PERSON INVESTING “PLAN ASSETS” 

  

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OF ANY PLAN MAY ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST THEREIN, 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 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 THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE
MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN
OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION. 
 IN CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL DELIVER TO THE COMPANY AND TRUSTEE 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 BLOCKS HAVING A PRINCIPAL AMOUNT OF NOT LESS THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF THIS SECURITY IN A BLOCK HAVING A PRINCIPAL AMOUNT 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 FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS SECURITY, AND SUCH PURPORTED TRANSFEREE SHALL
BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS SECURITY. 
 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. THIS OBLIGATION IS SUBORDINATED TO THE CLAIMS OF 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 

  

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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 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 

  

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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 from and including each Interest Payment Date or, in the case of the first Interest Payment Period, the original date of issuance of such Debt Security to, but
excluding, the next succeeding Interest Payment Date or, in the case of the last Interest Payment Period, the Redemption Date, Special Redemption Date or Maturity Date, as applicable, 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 on each Interest Payment Date commencing on June 15, 2008.
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 said 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, the Redemption Date (to the extent redeemed) or the
Special Redemption Date shall be paid to the Person to whom principal is paid. In the event that any Debt Security or portion thereof is called for redemption and the redemption date is subsequent to a regular record date with respect to any
Interest Payment Date and either on or 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 registered Securityholder on the relevant regular record date by virtue of having been such Securityholder, 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 in this clause provided. 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 

  

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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 Indenture shall mean the fifteenth day prior to the applicable Interest Payment Date whether or
not such date 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, be surrendered to the Trustee and promptly
canceled by it, or, if surrendered to the Trustee, 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. The Trustee shall dispose of all
canceled Debt Securities in accordance with its customary practices, 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. If the Company shall
acquire any of the Debt Securities, however, such acquisition 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 for any Interest Payment Period will be computed on the basis of a 360-day year and the actual number of days elapsed in the relevant interest period; provided,
however, that upon the occurrence of a Special Event Redemption pursuant to Section 10.02 the amounts payable pursuant to this Indenture shall be calculated as set forth in the definition of Special Redemption Price. 
 (b) LIBOR, for any Interest Payment Period, shall be determined by the Calculation Agent in accordance with the following provisions: 
 (1) On the second LIBOR Business Day (provided, that on such day commercial banks are open for business (including dealings in foreign
currency 

  

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deposits) in London (a “LIBOR Banking Day”), and otherwise the next preceding LIBOR Business Day that is also a LIBOR Banking Day) prior to
March 15, June 15, September 15 and December 15 (or, with respect to the first Interest Payment Period, on March 24, 2008) (each such day, a “LIBOR Determination Date” for the following Interest Payment
Period), the Calculation Agent shall obtain the rate for three-month U.S. Dollar deposits in Europe, which appears on Reuters Screen LIBOR 01 Page (as defined in the International Swaps and Derivatives Association, Inc. 2000 Interest Rate and
Currency Exchange Definitions) or such other page as may replace such page 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 (“Reuters
Screen”), and the rate so obtained shall be LIBOR for such Interest Payment Period. “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 Reuters Screen by a corrected rate before 12:00 noon (London time) on the same LIBOR Determination Date, the corrected rate as so
substituted will be LIBOR for that Interest Payment Period. 
 (2) If, on any LIBOR Determination Date, such rate does not
appear on Reuters Screen, the Calculation Agent shall determine the arithmetic mean of the offered quotations of the Reference Banks (as defined below) 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 the LIBOR Determination Date made by the Calculation Agent to the Reference Banks. If, on any LIBOR
Determination Date, at least two of the Reference Banks provide such quotations, LIBOR shall equal the arithmetic mean of such quotations. If, on any 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 the relevant 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.

 (3) 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 the applicable Interest Payment Period shall be LIBOR in effect for the immediately preceding Interest Payment 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). 
  

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 (d) As soon as practicable following each LIBOR Determination Date, but in no event later than the 30th
day following such LIBOR Determination Date, the Calculation Agent shall notify, in writing, the Company, the Institutional Trustee and the Paying Agent of the applicable Interest Rate in effect for the related Interest Payment Period. The
Calculation Agent shall, upon the request of any Securityholder, provide the Interest Rate then in effect. 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 Securityholders. Any error in a calculation of the Interest Rate by the Calculation Agent may be corrected at any time by the delivery of notice of such corrected Interest Rate as provided above. The Paying Agent shall be entitled to
rely on information received from the Calculation Agent or the Company as to the 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. Failure to notify the Company, the Institutional Trustee or the Paying Agent of the applicable Interest Rate shall not affect the obligation of
the Company to make payment on Debentures at such Interest Rate. 
 SECTION 2.11. Extension of Interest Payment Period. 
 So long as no Event of Default pursuant to paragraphs (c), (e), (f) or (g) of Section 5.01 of the Indenture has occurred and is continuing,
the Company shall have the right under the Indenture, from time to time and without causing an Event of Default, to defer payments of interest on the Debt Securities by extending the interest distribution period on the Debt Securities at any time
and from time to time during the term of the Debt Securities, for up to twenty consecutive quarterly periods (each such extended interest distribution period, an “Extension Period”), during which Extension Period no interest shall be due
and payable (except any Additional Interest that may be due and payable). No Extension Period may end on a date other than an Interest Payment Date. 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 law. No interest or Deferred Interest shall be due and payable during an Extension Period, except at the end thereof. At the end of
any such Extension Period the Company shall pay all Deferred Interest then accrued and unpaid on the Debt Securities; provided, however, that no Extension Period may extend beyond the Maturity Date, Redemption Date (to the extent
redeemed) or Special Redemption Date; and provided further, however, that during any such Extension Period, the Company shall be subject to the restrictions set forth in Section 3.08 of this Indenture. Prior to the
termination of any Extension Period, the Company may further extend such period, provided, that such period together with all such previous and further consecutive extensions thereof shall not exceed twenty consecutive quarterly periods, or
extend beyond the Maturity Date, Redemption Date (to the extent redeemed) or Special Redemption Date. 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. No interest or Deferred Interest shall be due and payable during an Extension Period, except at the end thereof, but Deferred Interest shall accrue upon each installment of interest that would otherwise have
been due and payable during such Extension Period until such installment is paid. The Company must give the Trustee notice of its election to begin any Extension Period or extend an Extension 

  

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Period (“Notice”) not later than the related regular record date for the relevant Interest Payment Date. The Notice shall describe, in reasonable
detail, why the Company has elected to begin an Extension Period. The Notice shall acknowledge and affirm the Company’s understanding that it is prohibited from issuing dividends and other distributions during the Extension Period. Upon receipt
of the Notice, the Placement Agent shall have the right, at its sole discretion, to disclose the name of the Company, the fact that the Company has elected to begin an Extension Period and other information that such Placement Agent, at its sole
discretion, deems relevant to the Company’s election to begin an Extension Period. The Trustee shall give notice of the Company’s election to begin a new Extension Period to the Securityholders. 
 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. Income Tax Certification. 
 As a condition to the payment of any principal of or interest on the Debt Securities without the imposition of withholding tax, the Trustee shall require the previous delivery of properly completed and signed applicable U.S. federal income
tax certifications (generally, an Internal Revenue Service Form W-9 (or applicable successor form) in the case of a person that is a “United States person” within the meaning of Section 7701 (a)(30) of the Code (under and as defined
in the Declaration) or an Internal Revenue Service Form W-8 (or applicable successor form) in the case of a person that is not a “United States person” within the meaning of Section 7701(a)(30) of the Code, and any other certification
acceptable to it to enable the Trustee or any Paying Agent to determine their respective duties and liabilities with respect to any taxes or other charges that they may be required to pay, deduct or withhold in respect of such Debt Securities.

 SECTION 2.14. Global Debentures. 
 (a) Upon the election of the holder of Outstanding Debt Securities, which election need not be in writing, the Debt Securities owned by such holder shall be issued in the form of one or more Global Debentures
registered in the name of the Depositary or its nominee. 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 thereof 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 registered, and no transfer 

  

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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 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, (iii) the Company executes and delivers to the Trustee a company order stating that the Company elects to terminate the book-entry system through the Depositary or
(iv) an Event of Default shall have occurred and be continuing. Upon the occurrence of any event specified in clause (i), (ii), (iii) or (iv) 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 to such owners of beneficial interests requesting the same. Upon the issuance of such Debt Securities and the
registration in the Debt Security Register of such Debt Securities in the names of such owners of the beneficial interests therein, the Trustee shall recognize such owners of beneficial interests as holders hereof. 
 (c) If any Global Debenture is to be exchanged for other Debt Securities or canceled in part, or if another Debt Security 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 in this Article II or (ii) the principal amount thereof shall be
reduced or increased by an amount equal to the portion thereof to be so exchanged or canceled, or equal to the principal amount of such other 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 depository 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 any Debt Securities issuable
in exchange for such Global Debenture (or any portion thereof) in accordance with the instructions of the Depositary. The Trustee shall not be liable for any delay in delivery of such instructions and 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 Trust Agreement) upon the dissolution of the Trust shall be distributed in the form of one or more Global Debentures registered in the name of a Depositary or its nominee, and deposited with the Debt Security Registrar, as custodian for such
Depositary, or with such Depositary, for credit by the Depositary to the respective accounts of the beneficial owners of the Debt Securities represented thereby (or such other accounts as they may direct). Debt Securities 

  

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distributed to holders of Capital Securities other than Book-Entry Capital Securities upon the dissolution of the Trust shall not be issued in the form of a
Global Debenture or any other form intended to facilitate book-entry trading in beneficial interests in such Debt Securities. 
 (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 interests pursuant to the Applicable Depository 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 Security Registrar and the Trustee shall be entitled to deal with the Depositary for all purposes of this Indenture relating to a Global Debenture (including the
payment of principal and interest thereon and the giving of instructions or directions by owners of beneficial interests therein and the giving of notices) as the sole holder of the Debt Security and shall have no obligations to the owners of
beneficial interests therein. Neither the Trustee nor the Debt Security Registrar shall have any liability in respect of any transfers affected by the Depositary. 
 (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 holder of any beneficial interest in any Global Debenture held on its behalf by a
Depositary shall have any rights under this Indenture with respect to such Global Debenture, and such Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the owner of such Global Debenture for all
purposes whatsoever. 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 of 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 a Depositary or impair, as between a Depositary and such holders of beneficial interests, the operation of customary practices governing the exercise of the
rights of the Depositary (or its nominee) as holder of any Debt Security. 
 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 on the Debt Securities at the place, at the respective times and in the manner provided in this Indenture and the Debt Securities. At the option of the Company, each installment of
interest on the Debt Securities may be paid (i) by mailing checks for such 

  

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interest payable to the order of the Securityholders entitled thereto as they appear on the Debt Security Register or (ii) by wire transfer to any
account with a banking institution located in the United States designated by such Securityholders 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 and each of the Securityholders will treat the Debt Securities as indebtedness, and the amounts, other than payments of principal,
payable in respect of the principal amount of such Debt Securities as interest, for all U.S. federal income tax purposes. All payments in respect of the Debt Securities will be made free and clear of U.S. withholding tax to any beneficial owner
thereof that has provided (i) an Internal Revenue Service Form W-9 or W-8BEN (or any substitute or successor form) establishing its U.S. or non-U.S. status for U.S. federal income tax purposes, and establishing a complete exemption from U.S.
withholding tax, or (ii) any other applicable form establishing a complete exemption from U.S. withholding tax. 
 (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. 
 (d) As of the date of this Indenture, the Company represents that the likelihood that it would exercise its right under this Indenture 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 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. Until otherwise designated by the Company in a Notice to the Trustee, such office or agency for all above purposes shall be at the Principal
Office of the Trustee. In case the Company shall fail to maintain any such office 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 other
offices or agencies where the Debt Securities may be presented for 

  

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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 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: 
 (1) 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 Securityholders; 
 (2) 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 
 (3) 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 Securityholders a sum sufficient to pay 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. 
  

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 (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 (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 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. 
 SECTION 3.06. Additional Interest. 
 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 Interest”) on the Debt Securities as shall be required so that the net amounts received and retained by the Trust for distribution to holders of Trust
Securities after paying all taxes (including withholding taxes), duties, assessments or other governmental charges will be equal to the amounts the Trust would have received and retained for distribution to holders of Trust Securities after paying
all taxes (including withholding taxes on distributions to holders of Trust Securities), duties, assessments or other governmental charges if no such additional taxes, duties, assessments or other governmental charges had 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 Interest
provided for in this paragraph to the extent that, in such context, Additional Interest is, was or would be payable in respect thereof pursuant to the provisions of this paragraph and express mention of the payment of Additional Interest (if
applicable) in any provisions hereof shall not be construed as excluding Additional Interest 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 Interest 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. 
  

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 SECTION 3.08. Limitation on Dividends. 
 If Debt Securities are initially issued to the Trust or a trustee of such Trust in connection with the issuance of Trust Securities by the Trust
(regardless of whether Debt Securities continue to be held by such Trust) and (i) there shall have occurred and be continuing 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 distribution 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 or (B) make any payment of principal of or interest or premium, if any, 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 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, reclassification, combination 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).

 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 that is a U.S. Person 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 certain mergers, consolidations or amalgamations, each as permitted by the
Declaration, (b) to otherwise continue 

  

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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 AND REPORTS BY THE COMPANY AND THE TRUSTEE 
 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 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. 
 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 Securityholders (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 Security 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 Securityholders (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
Securityholders 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 the election of the Company, either: 
 (1) 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 
 (2) inform such applicants as to the approximate number of Securityholders whose names and addresses appear in the information preserved at the time by the Trustee in accordance with the provisions of subsection
(a) of 

  

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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 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 of the
Company 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. 
 (c) Each and every Securityholder, by receiving and holding the same, agrees with the Company and the
Trustee that neither the Company nor the Trustee nor any Paying Agent shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Securityholders 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. 
 The Company shall deliver to each Securityholder (1) each Report on Form 10-K and Form 10-Q prepared by the Company and filed with the Securities and Exchange Commission in accordance with the Exchange Act within
7 days after the filing thereof, (2) if the Company is not then (y) subject to Section 13 or 15(d) of the Exchange Act or (z) exempt from reporting pursuant to Rule 12g3-2(b) thereunder, the Company shall be required to provide
within 45 days of the end of each calendar quarterly period and 90 days after the end of each calendar year, the information required to be provided by Rule 144A(d)(4) under the Securities Act and (3) 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 Securityholder as is required by the Code and the
income tax regulations of the U.S. Treasury thereunder. 
  

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 The Company will cause copies of its regulatory reports to be delivered to the Securityholder promptly
following their filing with the Federal Reserve. 
 ARTICLE V 
 REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS UPON AN EVENT OF 
 DEFAULT 
 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 (unless the Company has elected and may defer interest payments pursuant to Section 2.11), and continuance of such default for a period of 30 days; for the avoidance of doubt, an
extension of any interest distribution 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 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 either at maturity, upon redemption, by declaration of acceleration pursuant to Section 5.01 of this Indenture or otherwise; or 
 (c) the Company defaults in the payment of any interest upon any Debt Security when it becomes due and payable following the nonpayment of any such interest for 20 or more consecutive quarterly periods; 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 30 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 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 or order shall remain unstayed and in effect for a period of 90
consecutive days; or 
 (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, 

  

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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) 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) certain mergers, consolidations or amalgamations, each as permitted by the Declaration. 
 If an Event of Default specified under clause (c) of this Section 5.01 occurs and is continuing with respect to the Debt Securities, then, and in each and every such case, unless the principal of the Debt
Securities shall have already become due and payable, 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, if any, 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) or (g) 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. Notwithstanding anything to the contrary in this Section 5.01, if at any time during the period in which this Indenture remains in force and
effect, the Company ceases or elects to cease to be subject to the supervision and regulations of the Federal Reserve, OTS, OCC or similar regulatory authority overseeing bank, thrift, savings and loan or financial holding companies or similar
institutions requiring specifications for the treatment of capital similar in nature to the capital adequacy guidelines under the Federal Reserve rules and regulations, then the first sentence of this paragraph shall be deemed to include clauses
(a), (b) and (d) under this Section 5.01 as an Event of Default resulting in an acceleration of payment of the Debt Securities to the same extent as provided herein for clause (c). 
 With respect to clause (d) of this Section 5.01, the Company agrees that in the event of a breach by the Company of its covenants or agreements
mentioned therein, any remedy at law or in damages may prove inadequate and therefore the Company agrees that the Trustee shall be entitled to injunctive relief against the Company in the event of any breach or threatened breach by the Company, in
addition to any other relief (including damages) available to the Trustee under this Indenture or under law. 
 The foregoing provisions,
however, are subject to the condition that if, at any time after the principal of the Debt Securities shall have been so declared due and payable, 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 

  

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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 on Debt Securities which shall have become due by
acceleration, shall have been cured, waived or otherwise remedied as provided herein, and 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 declaration 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 Securityholders shall be restored respectively to their several positions and rights hereunder, and all rights, remedies and powers of the Company, the Trustee and the Securityholders 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 paragraphs (c), (e), (f) or (g) of
Section 5.01, and upon demand of the Trustee, the Company will pay to the Trustee, for the benefit of the Securityholders, 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 declaration of acceleration or
otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the 

  

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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 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 Securityholders 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 Securityholders. 
 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 Securityholders, and it shall not be necessary to make any Securityholders 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; 
  

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 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 on such Debt Securities; and 
 Fourth:
The balance, if any, to the Company. 
 SECTION 5.04. Proceedings by Securityholders. 
 No Securityholder shall have any right to institute any suit, action or proceeding for any remedy hereunder, unless such Securityholder 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 Securityholder shall have any right to prejudice the rights of any other Securityholder, obtain
priority or preference over any other such Securityholder or enforce any right under this Indenture except in the manner herein provided and for the equal, ratable and common benefit of all Securityholders. 
 Notwithstanding any other provisions in this Indenture, however, the right of any Securityholder to receive payment of the principal of, 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 Securityholder. 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 hereunder 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. 
  

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 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 Securityholders, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture or otherwise established with respect to the Debt Securities, and no delay or omission of the Trustee or of any Securityholder 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 (voting as one class) 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 being advised by counsel 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, 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
Liquidation Amount of the Trust 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 

  

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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 Securityholders 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 waived as permitted by this Section 5.07, 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 Securityholders appear upon the Debt Security Register, notice of all Defaults with respect to the
Debt Securities actually known to the Trustee, unless such defaults shall have been cured before the giving of such notice (the term “defaults” for the purpose of this Section 5.08 being hereby defined to be the events specified in
subsections (a), (b), (c), (d), (e), (f) and (g) of 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, 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 Securityholder by such Securityholder’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 5.09 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 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. 
  

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 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 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, except that: 
 (a) 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 
 (1) 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 
 (2) 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; 
  

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 (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 Securityholder, except with respect to an 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 Interest or premium, if any, if the Trustee does not have actual knowledge or written notice that such payment is due and payable), of which the Trustee shall be deemed to have knowledge; and 
 (e) in the absence of bad faith on the part of the Trustee, the Trustee may seek and rely on reasonable instructions from the Company. 
 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. 
 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 (that 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; 

 

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 (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 not less than 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. 
 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 or any Authenticating Agent or any Paying Agent or 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. 
  

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 SECTION 6.06. Compensation and Expenses of Trustee. 
 Other than as provided in the Fee Agreement of even date herewith among Wells Fargo Delaware Trust Company, the Trustee and the Company, 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 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 6.06 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 (and the Company hereby grants and pledges to the Trustee) 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 subsections (e), (f) or (g) 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. 
  

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 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 banking 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 banking 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 6.08 the combined capital and surplus of such corporation or
national banking 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 banking
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 6.08, 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, Calculation Agent, Paying Agent
or Debt Security Registrar. 
 (a) The Trustee, or any trustee or trustees hereafter appointed, the Calculation Agent, the Paying Agent
and any Debt Security Registrar 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 Securityholders 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 or successors by written instrument, in duplicate, executed by order of its 

  

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Board of Directors, one copy of which instrument shall be delivered to the resigning party and one copy to the successor. If no successor 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 party may, at the Company’s expense, petition any court of competent jurisdiction for the
appointment of a successor, 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. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor. 
 (b) In case at any time any of the following shall occur: 
 (1) 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, 
 (2) 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 
 (3) 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 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 (1), (2) or (3) above, the Trustee or 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 Securityholders 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 6.09 provided, may petition any court of
competent jurisdiction for an appointment of a successor. 
  

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 (d) Any resignation or removal of the Trustee, the Calculation Agent, the Paying Agent and any Debt
Security Registrar and appointment of a successor pursuant to any of the provisions of this Section 6.09 shall become effective upon acceptance of appointment by the successor as provided in Section 6.10. 
 SECTION 6.10. Acceptance by Successor. 
 Any successor Trustee, Calculation Agent, Paying Agent or Debt Security Registrar appointed as provided in Section 6.09 shall execute, acknowledge and deliver to the Company and to its predecessor an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the retiring party shall become effective and such successor, 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 herein; but, nevertheless, on the written request of the Company or of the successor, the party 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 all the rights and powers of the party so ceasing to act and shall duly assign, transfer and deliver to such
successor all property and money held by such retiring party hereunder. Upon reasonable request of any such successor, the Company shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such
successor all such rights and powers. Any party ceasing to act shall, nevertheless, retain a lien upon all property or funds held or collected to secure any amounts then due it pursuant to the provisions of Section 6.06. 
 If a successor Trustee is appointed, the Company, the retiring Trustee and the successor Trustee shall execute and deliver an indenture supplemental
hereto which shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Debt Securities as to which the predecessor Trustee is not
retiring shall continue to be vested in the predecessor Trustee, and shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the Trust hereunder by more than one
Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be Trustee of a trust or trusts hereunder separate and apart from any
trust or trusts hereunder administered by any other such Trustee. 
 No successor Trustee shall accept appointment as provided in this
Section 6.10 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, Calculation Agent, Paying Agent or Debt Security Registrar be liable for the acts or omissions of any successor hereunder. 
 Upon acceptance of appointment by a successor Trustee, Calculation Agent, Paying Agent or Debt Security Registrar as provided in this Section 6.10,
the Company shall mail notice of the succession to the Securityholders 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, the successor shall cause such notice to be mailed at the expense of the Company. 
  

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 SECTION 6.11. Succession by Merger, etc. 
 Any Person into which the Trustee may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person 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 Person 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, 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 Person organized and doing business under the laws of the United States or of any state or territory thereof or of the District of Columbia authorized under 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, territorial or District of Columbia authority. If such Person publishes reports of condition at least annually pursuant
to law or the requirements of such authority, then for the purposes of this Section 6.12 the combined capital and surplus of such Person 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 Person into which any Authenticating Agent may be merged or converted or with which it may be consolidated, or any Person resulting from any merger,
consolidation or conversion to which any Authenticating Agent shall be a party, or any Person succeeding to all 

  

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or substantially all of the corporate trust business of any Authenticating Agent, shall be the successor of such Authenticating Agent hereunder, if such
successor Person is otherwise eligible under this Section 6.12 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 6.12, the Trustee may, and upon the request of the Company shall, promptly appoint a successor Authenticating Agent eligible under this
Section 6.12, shall give written notice of such appointment to the Company and shall mail notice of such appointment to all Securityholders as the names and addresses of such Securityholders 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 with respect to the Debt Securities of its predecessor hereunder, with like effect as if originally named as
Authenticating Agent herein. 
 Other than as provided in the Fee Agreement of even date herewith among Wells Fargo Delaware Trust Company,
the Company and the Trustee, 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 and shall receive such reasonable indemnity as it may require against the costs, expenses and liabilities incurred in furtherance of its duties under this Section 6.12. 
 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 Securityholders voting in 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. 
  

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 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 holders 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, premium, if any, and interest on such Debt Security and for all other purposes; and neither the Company nor the Trustee nor any Authenticating Agent nor any Paying Agent nor any transfer agent nor any
Debt Security Registrar shall be affected by any notice to the contrary. All such payments so made to any Securityholder for the time being or upon such Securityholder’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. 
  

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 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 direction, 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 direction, 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 7.04 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 Securityholders 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 Securityholder (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 Securityholder 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. 
 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; 
  

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 (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 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 Securityholders 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 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.

 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 with respect to which the meeting is being held or (b) a Person appointed by an
instrument in writing as proxy by a holder of one or more such 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. 
  

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 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 Securityholder 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 Securityholder; 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 Securityholders with respect to which such meeting is being held
shall be by written ballots on which shall be subscribed the signatures of such Securityholders 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 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. 
  

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 SECTION 8.07. Quorum; Actions. 
 The Persons entitled to vote a majority in outstanding principal amount of the Debt Securities 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 outstanding principal amount of the Debt Securities, the Persons holding or representing such specified percentage in outstanding principal amount of the Debt Securities 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 outstanding principal amount of the Debt Securities 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 not less than a majority in outstanding principal amount of the Debt Securities; 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 outstanding principal amount of the Debt Securities. 
 Any resolution passed or
decision taken at any meeting of Securityholders duly held in accordance with this Section shall be binding on all the Securityholders, whether or not present or represented at the meeting. 
 SECTION 8.08. Written Consent Without a Meeting. 
 Whenever under this Indenture, Securityholders are required or permitted to take any action by vote, such action may be taken without a meeting on written consent, setting forth the action so taken, signed by the
Securityholders of all outstanding Debt Securities entitled to vote thereon. No consent shall be effective to take the action referred to therein unless, within sixty days of the earliest dated consent delivered in the manner required by this
paragraph to the Trustee, written consents signed by a sufficient number of Securityholders to take action are delivered to the Trustee at its Principal Office. Delivery made to the Trustee at its Principal Office, shall be by hand or by
certificated or registered mail, return receipt requested. Written 

  

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consent thus given by the Securityholders of such number of Debt Securities as is required hereunder, shall have the same effect as a valid vote of
Securityholders of such number of Debt Securities. 
 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 Person to the Company, or successive successions, and the assumption by the successor Person 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 Securityholders as the Board of
Directors shall consider to be for the protection of such Securityholders, 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 or amend 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 Securityholders; 
 (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 of 1933, as amended); 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 Securityholders); 
 (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 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; 
  

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 (f) to make any change (other than as elsewhere provided in this paragraph) 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 Securityholders. 
 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 9.01 may be executed by the Company and the Trustee without the consent of the Securityholders 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 not less than 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 Securityholders; provided, however, that no such supplemental indenture shall without such 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 impair the right of repayment, if any, at the option of the Securityholder, 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 a trustee of such trust, such supplemental indenture shall not be effective until the holders of a majority in Liquidation Amount of the outstanding Capital
Securities shall have consented to such supplemental indenture; provided, further, that if the 

  

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consent of the Securityholder of each 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 9.02 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 Securityholders
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. 
  

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 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 and an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant hereto complies with the requirements of this Article IX. The Trustee shall 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. 
 At any time the Company shall have the right, subject to the receipt by the Company of prior approval from any regulatory authority with jurisdiction over
the Company if such approval is then required under applicable capital guidelines or policies of such regulatory authority, 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 Payment Periods terminating on or prior to such date) from time to time in part, on any March 15, June 15, September 15 or December 15 on or after June 15, 2013 (the “Redemption
Date”), at the 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 any
regulatory authority with jurisdiction over the Company if such approval is then required under applicable capital guidelines or policies of such regulatory authority, to redeem the Debt Securities, in whole or 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 Securityholders 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 Securityholder 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. 
  

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 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 redemption 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, 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.

 On the Business Day prior to the 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 the redemption date all the Debt Securities so called for redemption at the appropriate redemption price, together
with unpaid interest accrued to such date. 
 The Company will give the Trustee notice not less than 45 nor more than 60 days prior to the
Redemption Date as to the Redemption 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 Redemption Date or the Special Redemption Date (as the case may be) and at the place or places stated in such notice at the
applicable redemption price, together with interest accrued to the date fixed for redemption, and on and after said Redemption Date or the Special Redemption Date (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 redemption price, together with unpaid interest accrued thereon to the Redemption Date or
the Special Redemption Date (as the case may be). 
 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 Capital Securities and 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 Securityholders or holders of Capital 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 Securityholders or holders of Capital Securities 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 City of New York, Borough of
Manhattan, 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 entity, by supplemental indenture, executed and
delivered to the Trustee and reasonably satisfactory in 

  

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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 of all of the covenants and conditions of this Indenture to be performed or observed by the Company, such successor entity 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 entity 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 entity 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 entity 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 such
date of maturity or redemption date, as the case may be, but excluding, however, the amount of 

  

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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 Columbia pursuant to its unclaimed property or similar laws, and if in the case of either clause (a) or clause (b) 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, and 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 Securityholders 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 Securityholder may be entitled to collect and all liability of the Trustee or such Paying Agent with respect to such moneys shall thereupon cease.

  

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 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, duly signed by the party giving such notice, and shall be delivered by facsimile (which shall be followed by notice delivered or mailed by first class mail) or mailed by first
class mail to the Company at: 
  

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 Bank of the Carolinas Corporation 
 135 Boxwood Village Drive 
 Mocksville, North Carolina 27028 
 Attention: Eric E. Rhodes 
 Any notice,
direction, request or demand by any 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 Wells Fargo Bank, National Association
at: 
 919 North Market Street 
 Suite 1600 
 Wilmington, DE 19801 
 Attention: Corporate Trust Division – Bank of the Carolinas Trust I 
 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 issued on the date of this Indenture). 
 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. Non-Business Days. 
 Notwithstanding anything to the contrary contained herein, if any Interest Payment Date, other than on the Maturity Date, any 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 

  

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interest will accrue for each day that such payment is delayed as a result thereof. If the Maturity Date, Redemption Date or 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 (except that, if such Business Day falls in the next
calendar year, such payment will be made on the immediately preceding Business Day). 
 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. Severability. 
 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 or 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 the Institutional Trustee of the Trust, if the Institutional Trustee of the Trust fails to enforce its rights under this Indenture as the Securityholder
held as the assets of the Trust after the holders of a majority in Liquidation Amount of the Capital Securities of the Trust have so directed in writing such Institutional 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 Institutional Trustee’s rights under this Indenture without first instituting any legal proceedings against such Institutional Trustee or any other
Person. Notwithstanding the foregoing, if an Event of Default has occurred and is continuing and such event is attributable to 

  

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the failure of the Company to pay interest (or premium, if any) or principal on the Debt Securities on the date such interest (or premium, if any) or
principal is otherwise due and payable (or in the case of redemption, on the redemption date), the Company acknowledges that a holder of record of 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 holder on or
after the respective due date 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 Securityholder’s acceptance thereof likewise covenants and agrees, that all Debt Securities shall be issued subject to the provisions of this Article XV; and each Securityholder, 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 payment
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 when such payment is prohibited by the preceding paragraph
of this Section 15.02, 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 a trustee) notify 

  

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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 or winding-up or 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 or winding-up or 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.

 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 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, 

  

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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 15.03 if such other corporation shall, as a part of such 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 15.03
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 Securityholders 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 Securityholders, 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 Securityholders, the obligation of the Company, which is absolute and unconditional, to pay to the Securityholders 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 Securityholders 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 

  

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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. 
 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 15.06 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. 
  

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 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 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 Securityholders 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, and any other Person. 
 Wells Fargo Bank, National Association, in its capacity as Trustee,
hereby accepts the trusts in this Indenture declared and provided, upon the terms and conditions herein above set forth. 
  

 -64- 

 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. 
  

			
	Bank of the Carolinas Corporation
		
	By:	 	 /s/ Eric E. Rhodes

	Name:	 	Eric E. Rhodes
	Title:	 	Vice President and CFO
	
	Wells Fargo Bank, National Association, as Trustee
		
	By:	 	 /s/ Amy L. Martin

	Name:	 	Amy L. Martin
	Title:	 	Vice President

 EXHIBIT A 
 FORM OF JUNIOR SUBORDINATED DEBT SECURITY 
 DUE 2038 
 [FORM OF FACE OF 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 BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY 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) TO A “NON U.S. PERSON” IN AN “OFFSHORE TRANSACTION” PURSUANT TO REGULATION S UNDER THE SECURITIES ACT, (D) 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) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY 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, 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 CLAUSES (D) OR (E) 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 BY ITS ACCEPTANCE HEREOF AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS. 
 THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES, REPRESENTS AND WARRANTS THAT IT WILL NOT ENGAGE IN HEDGING TRANSACTIONS INVOLVING THIS
SECURITY UNLESS SUCH TRANSACTIONS ARE IN COMPLIANCE WITH THE SECURITIES ACT OR AN APPLICABLE EXEMPTION THEREFROM. 
  

 A-1 

 THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT
AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE “CODE”), (EACH A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY AND NO PERSON INVESTING “PLAN ASSETS” OF ANY PLAN MAY
ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST THEREIN, 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 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 THEREIN WILL
BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER
PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION. 
 IN CONNECTION
WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL DELIVER TO THE COMPANY AND TRUSTEE 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 BLOCKS HAVING A PRINCIPAL AMOUNT OF NOT LESS THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS
THEREOF. ANY ATTEMPTED TRANSFER OF THIS SECURITY IN A BLOCK HAVING A PRINCIPAL AMOUNT 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 FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS SECURITY, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS SECURITY. 
 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. THIS OBLIGATION IS SUBORDINATED TO THE CLAIMS OF 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-2 

 Form of Junior Subordinated Debt Security due 2038 
 of 
 Bank of the Carolinas Corporation

 Bank of the Carolinas Corporation, a bank holding company incorporated in North Carolina (the “Company”), for value received
promises to pay to Wells Fargo Bank, National Association, not in its individual capacity but solely as Institutional Trustee for Bank of the Carolinas Trust I, a Delaware statutory trust (the “Securityholder”), or registered assigns, the
principal sum of Five Million One Hundred Fifty Five Thousand Dollars ($5,155,000) on June 15, 2038 and to pay interest on said principal sum from March 26, 2008, or from the most recent interest payment date (each such date, an
“Interest Payment Date”) to which interest has been paid or duly provided for, quarterly (subject to deferral as set forth herein) in arrears on March 15, June 15, September 15 and December 15 of each year
commencing June 15, 2008, at a variable per annum rate equal to LIBOR (as defined in the Indenture) plus 3.0% (the “Interest Rate”) (provided, however, that the Interest Rate for any Interest Payment Period may not exceed the highest
rate permitted by New York law, as the same may be modified by United States law of general applicability) until the principal hereof shall have become due and payable, 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 Interest Rate in effect for each such Interest Payment Period compounded quarterly. The amount of interest payable on
any Interest Payment Date shall be computed on the basis of a 360-day year and the actual number of days elapsed in the relevant interest period. Notwithstanding anything to the contrary contained herein, if any Interest Payment Date, other than on
the Maturity Date, any Redemption Date (to the extent redeemed) 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 the Maturity Date, Redemption Date or 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 (except that, if such Business Day falls in the next calendar year, such payment will be made
on the immediately preceding Business Day). 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 said Indenture) 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 shall be
paid to the Person to whom principal is paid. Any such interest installment not punctually paid or duly provided for shall forthwith cease to be payable to the registered Securityholders on such regular record date and may be paid to the Person in
whose name this Debt Security (or one or more Predecessor Debt 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 shall be given to the
registered Securityholders not less than 10 days prior to such special record date, all as more fully provided in the Indenture. The principal of and interest on this Debt Security shall be payable at the office or agency of the Trustee (or other
Paying Agent appointed by the Company) maintained for that purpose in any coin or currency of the United States of America 

  

 A-3 

 
that at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made at
the option of the Company by check mailed to the registered Securityholder 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. 
 Upon submission of Notice (as defined in the Indenture) and so long as no Event of Default pursuant
to paragraphs (c), (e), (f) or (g) of Section 5.01 of the Indenture has occurred and is continuing, the Company shall have the right under the Indenture, from time to time and without causing an Event of Default, to defer payments of
interest on the Debt Securities by extending the interest distribution 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
distribution period, an “Extension Period”), during which Extension Period no interest shall be due and payable (except any Additional Interest that may be due and payable). 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 law. No Extension Period may end on a date other than an Interest Payment Date. At the end of
any such Extension Period the Company shall pay all Deferred Interest then accrued and unpaid on the Debt Securities; provided, however, that no Extension Period may extend beyond the Maturity Date, Redemption Date (to the extent
redeemed) or Special Redemption Date; and provided, further, however, during any such 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 or (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 the applicable Extension Period, (b) as a result of any exchange, reclassification, combination 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 

  

 A-4 

 
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, or extend beyond the Maturity Date, Redemption Date (to the extent redeemed) or Special
Redemption Date. 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. No interest or Deferred Interest shall be due and
payable during an Extension Period, except at the end thereof, but Deferred Interest shall accrue upon each installment of interest that would otherwise have been due and payable during such Extension Period until such installment is paid. The
Company must give the Trustee notice of its election to begin any Extension Period or extend an Extension Period (“Notice”) not later than the related regular record date for the relevant Interest Payment Date. The Notice shall describe
why the Company has elected to begin an Extension Period. The Notice shall acknowledge and affirm the Company’s understanding that it is prohibited from issuing dividends and other distributions during the Extension Period. Upon receipt of the
Notice, the Placement Agent shall have the right, at its sole discretion, to disclose the name of the Company, the fact that the Company has elected to begin an Extension Period and other information that such Placement Agent, at its sole
discretion, deems relevant to the Company’s election to begin an Extension Period. The Trustee shall give notice of the Company’s election to begin a new Extension Period to the Securityholders. 
 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, 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 Securityholder’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
Securityholder’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 Securityholder upon said provisions. 
 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. 
  

 A-5 

 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. 
  

 A-6 

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

			
	Bank of the Carolinas Corporation
		
	By:	 	  

	Name:	 	  

	Title:	 	  

 Dated:
                    , 2008 
 CERTIFICATE OF AUTHENTICATION 
 This represents Debt Securities referred to in the within-mentioned Indenture. 

 

			
	Wells Fargo Bank, National Association, not in its
individual capacity but solely as Trustee
		
	By:	 	  

		 	Authorized Signatory

 Dated:
                    , 2008 
  

 A-7 

 [FORM OF REVERSE OF SECURITY] 
 This Debt Security is one of a duly authorized series of Debt Securities of the Company, all issued or to be issued pursuant to an Indenture (the
“Indenture”), dated as of March 26, 2008, duly executed and delivered between the Company and Wells Fargo Bank, National Association, 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 (referred to herein as the “Debt Securities”)
of which this Debt Security is a part. The summary of the terms of this Debt Security contained herein does not purport to be complete and is qualified by reference to the Indenture. 
 Upon the occurrence and continuation of a Tax Event, an Investment Company Event or a Capital Treatment Event (each a “Special Event”), this
Debt Security may become due and payable, in whole or in part, at any time, within 90 days following the occurrence of such Tax Event, Investment Company Event or Capital Treatment Event (the “Special Redemption Date”), as the case may be,
at the Special Redemption Price. 
 The Company shall also have the right to redeem this Debt Security at the option of the Company, in whole
or in part, on any March 15, June 15, September 15 or December 15 on or after June 15, 2013 (a “Redemption Date”), at the Redemption Price. 
 Any redemption pursuant to either of the two preceding paragraphs will be made, subject to the receipt by the Company of prior approval from any
regulatory authority with jurisdiction over the Company if such approval is then required under applicable capital guidelines or policies of such regulatory authority, upon not less than 30 days’ nor more than 60 days’ notice. If the Debt
Securities are only partially redeemed by the Company, the Debt Securities will be redeemed pro rata or by lot or by any other method utilized by the Trustee. 
 “Redemption Price” means 100% of the principal amount of the Debt Securities being redeemed plus accrued and unpaid interest on such Debt Securities to the 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
103.525% of the principal amount of Debt Securities to be redeemed prior to June 15, 2009 and thereafter 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 15
	  	Percentage of Principal
Amount	 
	 2009
	  	102.820	%
	 2010
	  	102.115	%
	 2011
	  	101.410	%
	 2012
	  	100.705	%
	 2013 and thereafter
	  	100.000	%

  

 A-8 

 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 Securityholder hereof upon the cancellation hereof. 
 In certain cases where
an Event of Default pursuant to paragraphs (c), (e), (f) or (g) of Section 5.01 of 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 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 not less than 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 Securityholders; 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 redemption 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 Securityholder to institute suit for the 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 all of the Securityholders, 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
registered holder of this Debt Security (unless revoked as provided in the Indenture) shall be conclusive and binding upon such Securityholder 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. 
 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 pay all payments due on this Debt Security at the time and place and at the rate and in the money herein prescribed. 
  

 A-9 

 As provided in the Indenture and subject to certain limitations herein and therein set forth, this Debt
Security is transferable by the registered holder hereof on the Debt Security Register of the Company, upon surrender of this Debt Security for registration of transfer at the office or agency of the Trustee 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 registered holder hereof or such Securityholder’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 may require payment
of a sum sufficient to cover any tax or other governmental charge payable in relation thereto. 
 Prior to due presentment for registration
of transfer of this 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 registered 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
neither the Company nor the Trustee nor any Authenticating Agent nor any Paying Agent nor any transfer agent nor any Debt Security Registrar shall be affected by any notice to the contrary. 
 No recourse shall be had for the payment of the principal of or the 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 or director, past, present or future, as such, of the Company or of any predecessor or successor corporation, 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.

 The Debt Securities are issuable only in registered certificated form without coupons. 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 a different authorized denomination, as requested by the Securityholder surrendering the same. 
 All terms used in this Debt Security that are defined in the Indenture shall have the meanings assigned to them in the Indenture. 
 THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THE DEBT SECURITIES, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF (OTHER THAN
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW). 
  

 A-10Guarantee Agreement

 Exhibit 4.2 
 GUARANTEE AGREEMENT 
 BANK OF THE CAROLINAS CORPORATION 
 Dated as of March 26, 2008 

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	 ARTICLE I
 DEFINITIONS AND INTERPRETATION

			
	SECTION 1.1.	  	Definitions and Interpretation	  	1
	
	 ARTICLE II
 POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

			
	SECTION 2.1.	  	Powers and Duties of the Guarantee Trustee	  	4
			
	SECTION 2.2.	  	Certain Rights of the Guarantee Trustee	  	5
			
	SECTION 2.3.	  	Not Responsible for Recitals or Issuance of Guarantee	  	7
			
	SECTION 2.4.	  	Events of Default; Waiver	  	7
			
	SECTION 2.5.	  	Events of Default; Notice	  	8
	
	 ARTICLE III
 THE GUARANTEE TRUSTEE

			
	SECTION 3.1.	  	The Guarantee Trustee; Eligibility	  	8
			
	SECTION 3.2.	  	Appointment, Removal and Resignation of the Guarantee Trustee	  	9
	
	 ARTICLE IV
 GUARANTEE

			
	SECTION 4.1.	  	Guarantee	  	10
			
	SECTION 4.2.	  	Waiver of Notice and Demand	  	10
			
	SECTION 4.3.	  	Obligations Not Affected	  	10
			
	SECTION 4.4.	  	Rights of Holders	  	11
			
	SECTION 4.5.	  	Guarantee of Payment	  	12
			
	SECTION 4.6.	  	Subrogation	  	12
			
	SECTION 4.7.	  	Independent Obligations	  	12
			
	SECTION 4.8.	  	Enforcement	  	12

  

 -i- 

 TABLE OF CONTENTS 
 (continued) 
  

					
	 	  	 	  	Page
	 ARTICLE V
 LIMITATION OF TRANSACTIONS; SUBORDINATION

			
	SECTION 5.1.	  	Limitation of Transactions	  	12
			
	SECTION 5.2.	  	Ranking	  	13
	
	 ARTICLE VI
 TERMINATION

			
	SECTION 6.1.	  	Termination	  	14
	
	 ARTICLE VII
 INDEMNIFICATION

			
	SECTION 7.1.	  	Exculpation	  	14
			
	SECTION 7.2.	  	Indemnification	  	14
			
	SECTION 7.3.	  	Compensation; Reimbursement of Expenses	  	15
	
	 ARTICLE VIII
 MISCELLANEOUS

			
	SECTION 8.1.	  	Successors and Assigns	  	16
			
	SECTION 8.2.	  	Amendments	  	16
			
	SECTION 8.3.	  	Notices	  	16
			
	SECTION 8.4.	  	Benefit	  	17
			
	SECTION 8.5.	  	Governing Law	  	17
			
	SECTION 8.6.	  	Counterparts	  	17

  

 -ii- 

 GUARANTEE AGREEMENT 
 This GUARANTEE AGREEMENT (the “Guarantee”), dated as of March 26, 2008, is executed and delivered by Bank of the Carolinas Corporation, incorporated in North Carolina (the “Guarantor”), and
Wells Fargo Bank, National Association, as trustee (the “Guarantee Trustee”), for the benefit of the Holders (as defined herein) from time to time of the Capital Securities (as defined herein) of Bank of the Carolinas Trust I, a Delaware
statutory trust (the “Issuer”). 
 WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the “Declaration”),
dated as of March 26, 2008, among the trustees named therein of the Issuer, the administrators of the Issuer named therein, Bank of the Carolinas Corporation, as sponsor, and the Holders from time to time of undivided beneficial interests in
the assets of the Issuer, the Issuer is issuing on the date hereof securities, having an aggregate liquidation amount of up to $5,000,000, designated the TP Securities (the “Capital Securities”); and 
 WHEREAS, as incentive for the Holders to purchase the Capital Securities, the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Guarantee, to pay to the Holders of Capital Securities the Guarantee Payments (as defined herein) and to make certain other payments on the terms and conditions set forth herein. 
 NOW, THEREFORE, in consideration of the purchase by each Holder of the Capital Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee for the benefit of the Holders. 
 ARTICLE I 
 DEFINITIONS AND INTERPRETATION 
 SECTION 1.1. Definitions
and Interpretation. 
 In this Guarantee, unless the context otherwise requires: 
 (a) capitalized terms used in this Guarantee but not defined in the preamble above have the respective meanings assigned to them in this
Section 1.1; 
 (b) a term defined anywhere in this Guarantee has the same meaning throughout; 
 (c) all references to “the Guarantee” or “this Guarantee” are to this Guarantee as modified, supplemented or amended
from time to time; 
 (d) all references in this Guarantee to Articles and Sections are to Articles and Sections of this
Guarantee, unless otherwise specified; 
 (e) terms defined in the Declaration as of the date of execution of this Guarantee
have the same meanings when used in this Guarantee, unless otherwise defined in this Guarantee or unless the context otherwise requires; and 

 (f) a reference to the singular includes the plural and vice versa. 
 “Beneficiaries” means any Person to whom the Issuer is or hereafter becomes indebted or liable. 
 “Corporate Trust Office” means the office of the Guarantee Trustee at which the corporate trust business of the Guarantee Trustee shall, at any
particular time, be principally administered. 
 “Covered Person” means any Holder of Capital Securities. 
 “Debentures” means the junior subordinated debentures of Bank of the Carolinas Corporation, designated the Junior Subordinated Debt Securities
due 2038, held by the Institutional Trustee (as defined in the Declaration) of the Issuer. 
 “Event of Default” has the meaning
set forth in Section 2.4. 
 “Guarantee Payments” means the following payments or distributions, without duplication, with
respect to the Capital Securities, to the extent not paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined in the Declaration) which are required to be paid on such Capital Securities to the extent the Issuer has
funds available in the Property Account (as defined in the Declaration) therefor at such time, (ii) the Redemption Price (as defined in the Indenture) to the extent the Issuer has funds available in the Property Account therefor at such time,
with respect to any Capital Securities called for redemption by the Issuer, (iii) the Special Redemption Price (as defined in the Indenture) to the extent the Issuer has funds available in the Property Account therefor at such time, with
respect to Capital Securities called for redemption upon the occurrence of a Special Event (as defined in the Indenture), and (iv) upon a voluntary or involuntary liquidation, dissolution, winding-up or termination of the Issuer (other than in
connection with the distribution of Debentures to the Holders of the Capital Securities in exchange therefor as provided in the Declaration), the lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid Distributions on
the Capital Securities to the date of payment, to the extent the Issuer has funds available in the Property Account therefor at such time, and (b) the amount of assets of the Issuer remaining available for distribution to Holders in liquidation
of the Issuer after satisfaction of liabilities to creditors of the Issuer as required by applicable law (in either case, the “Liquidation Distribution”). 
 “Guarantee Trustee” means Wells Fargo Bank, National Association, until a Successor Guarantee Trustee has been appointed and has accepted such appointment pursuant to the terms of this Guarantee and
thereafter means each such Successor Guarantee Trustee. 
 “Holder” means any holder, as registered on the books and records of the
Issuer, of any Capital Securities; provided, however, that, in determining whether the holders of the requisite percentage of Capital Securities have given any request, notice, consent or waiver hereunder, “Holder” shall not include the
Guarantor or any Affiliate of the Guarantor. 
 “Indemnified Person” means the Guarantee Trustee (including in its individual
capacity), any Affiliate of the Guarantee Trustee, or any officers, directors, shareholders, members, partners, employees, representatives, nominees, custodians or agents of the Guarantee Trustee. 
  

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 “Indenture” means the Indenture, dated as of March 26, 2008, between the Guarantor and
Wells Fargo Bank, National Association, not in its individual capacity but solely as trustee, and any indenture supplemental thereto pursuant to which the Debentures are to be issued to the Institutional Trustee of the Issuer. 
 “Liquidation Distribution” has the meaning set forth in the definition of “Guarantee Payments” herein. 
 “Majority in liquidation amount of the Capital Securities” means Holder(s) of outstanding Capital Securities, voting together as a class, but
separately from the holders of Common Securities, of more than 50% of the aggregate liquidation amount (including the stated amount that would be paid on redemption, liquidation or otherwise, plus accrued and unpaid Distributions to, but excluding,
the date upon which the voting percentages are determined) of all Capital Securities then outstanding. 
 “Obligations” means any
costs, expenses or liabilities (but not including liabilities related to taxes) of the Issuer, other than obligations of the Issuer to pay to holders of any Trust Securities the amounts due such holders pursuant to the terms of the Trust Securities.

 “Officer’s Certificate” means, with respect to any Person, a certificate signed by one Authorized Officer of such Person.
Any Officer’s Certificate delivered with respect to compliance with a condition or covenant provided for in this Guarantee shall include: 
 (a) a statement that each officer signing the Officer’s Certificate has read the covenant or condition and the definitions relating thereto; 
 (b) a brief statement of the nature and scope of the examination or investigation undertaken by each officer in rendering the
Officer’s Certificate; 
 (c) a statement that each such officer has made such examination or investigation as, in such
officer’s opinion, is necessary to enable such officer to express an informed opinion as to whether or not such covenant or condition has been complied with; and 
 (d) a statement as to whether, in the opinion of each such officer, such condition or covenant has been complied with. 
 “Person” means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint stock company,
limited liability company, trust, unincorporated association, or government or any agency or political subdivision thereof, or any other entity of whatever nature. 
 “Responsible Officer” means, with respect to the Guarantee Trustee, any officer within the Corporate Trust Office of the Guarantee Trustee with direct responsibility for the administration of any matters
relating to this Guarantee, including any vice president, any 

  

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assistant vice president, any secretary, any assistant secretary, the treasurer, any assistant treasurer, any trust officer or other officer of the Corporate
Trust Office of the Guarantee Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is
referred because of that officer’s knowledge of and familiarity with the particular subject. 
 “Successor Guarantee Trustee”
means a successor Guarantee Trustee possessing the qualifications to act as Guarantee Trustee under Section 3.1. 
 “Trust
Securities” means the Common Securities and the Capital Securities. 
 ARTICLE II 
 POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE 
 SECTION 2.1. Powers and Duties of the Guarantee
Trustee. 
 (a) This Guarantee shall be held by the Guarantee Trustee for the benefit of the Holders of the Capital
Securities, and the Guarantee Trustee shall not transfer this Guarantee to any Person except a Holder of Capital Securities exercising his or her rights pursuant to Section 4.4(b) or to a Successor Guarantee Trustee on acceptance by such
Successor Guarantee Trustee of its appointment to act as Successor Guarantee Trustee. The right, title and interest of the Guarantee Trustee shall automatically vest in any Successor Guarantee Trustee, and such vesting and cessation of title shall
be effective whether or not conveyancing documents have been executed and delivered pursuant to the appointment of such Successor Guarantee Trustee. 
 (b) If an Event of Default actually known to a Responsible Officer of the Guarantee Trustee has occurred and is continuing, the Guarantee Trustee shall enforce this Guarantee for the benefit of the Holders of the
Capital Securities. 
 (c) The Guarantee Trustee, before the occurrence of any Event of Default and after the curing or
waiving of all Events of Default that may have occurred, shall undertake to perform only such duties as are specifically set forth in this Guarantee, and no implied covenants shall be read into this Guarantee against the Guarantee Trustee. In case
an Event of Default has occurred (that has not been cured or waived pursuant to Section 2.4(b)) and is actually known to a Responsible Officer of the Guarantee Trustee, the Guarantee Trustee shall exercise such of the rights and powers vested
in it by this Guarantee, and use the same degree of care and skill in its exercise thereof, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. 
 (d) No provision of this Guarantee shall be construed to relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that: 
 (i) prior to the occurrence of any Event of
Default and after the curing or waiving of all Events of Default that may have occurred: 
 (A) the duties and obligations of
the Guarantee Trustee shall be determined solely by the express provisions of this Guarantee, and the Guarantee Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Guarantee,
and no implied covenants or obligations shall be read into this Guarantee against the Guarantee Trustee; and 
  

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

 (ii) the Guarantee Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that such Responsible Officer of the Guarantee Trustee or the Guarantee Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made; 
 (iii) the Guarantee Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance
with the written direction of the Holders of not less than a Majority in liquidation amount of the Capital Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee, or
exercising any trust or power conferred upon the Guarantee Trustee under this Guarantee; and 
 (iv) no provision of this
Guarantee shall require the Guarantee Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if the Guarantee Trustee shall
have reasonable grounds for believing that the repayment of such funds is not reasonably assured to it under the terms of this Guarantee, or security and indemnity, reasonably satisfactory to the Guarantee Trustee, against such risk or liability is
not reasonably assured to it. 
 SECTION 2.2. Certain Rights of the Guarantee Trustee. 
 (a) Subject to the provisions of Section 2.1: 
 (i) The Guarantee Trustee may conclusively rely, and shall be fully protected in acting or refraining from acting upon, any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed, sent or presented
by the proper party or parties. 
  

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 (ii) Any direction or act of the Guarantor contemplated by this Guarantee shall be
sufficiently evidenced by an Officer’s Certificate. 
 (iii) Whenever, in the administration of this Guarantee, the
Guarantee Trustee shall deem it desirable that a matter be proved or established before taking, suffering or omitting any action hereunder, the Guarantee Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad
faith on its part, request and conclusively rely upon an Officer’s Certificate of the Guarantor which, upon receipt of such request, shall be promptly delivered by the Guarantor. 
 (iv) The Guarantee Trustee shall have no duty to see to any recording, filing or registration of any instrument or other writing (or any
rerecording, refiling or reregistration thereof). 
 (v) The Guarantee Trustee may consult with counsel of its selection, and
the advice or opinion of such counsel with respect to legal matters shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with such advice or
opinion. Such counsel may be counsel to the Guarantor or any of its Affiliates and may include any of its employees. The Guarantee Trustee shall have the right at any time to seek instructions concerning the administration of this Guarantee from any
court of competent jurisdiction. 
 (vi) The Guarantee Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Guarantee at the request or direction of any Holder, unless such Holder shall have provided to the Guarantee Trustee such security and indemnity, reasonably satisfactory to the Guarantee Trustee, against the costs,
expenses (including attorneys’ fees and expenses and the expenses of the Guarantee Trustee’s agents, nominees or custodians) and liabilities that might be incurred by it in complying with such request or direction, including such
reasonable advances as may be requested by the Guarantee Trustee; provided, however, that nothing contained in this Section 2.2(a)(vi) shall be taken to relieve the Guarantee Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this Guarantee. 
 (vii) The Guarantee Trustee shall not be
bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper
or document, but the Guarantee Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit. 
 (viii) The Guarantee Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, nominees, custodians or attorneys, and the Guarantee Trustee
shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder. 
  

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 (ix) Any action taken by the Guarantee Trustee or its agents hereunder shall bind the
Holders of the Capital Securities, and the signature of the Guarantee Trustee or its agents alone shall be sufficient and effective to perform any such action. No third party shall be required to inquire as to the authority of the Guarantee Trustee
to so act or as to its compliance with any of the terms and provisions of this Guarantee, both of which shall be conclusively evidenced by the Guarantee Trustee’s or its agent’s taking such action. 
 (x) Whenever in the administration of this Guarantee the Guarantee Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the Guarantee Trustee (A) may request instructions from the Holders of a Majority in liquidation amount of the Capital Securities, (B) may refrain from enforcing such
remedy or right or taking such other action until such instructions are received and (C) shall be protected in conclusively relying on or acting in accordance with such instructions. 
 (xi) The Guarantee Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Guarantee. 
 (b) No
provision of this Guarantee shall be deemed to impose any duty or obligation on the Guarantee Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it, in any jurisdiction in which it shall be
illegal or in which the Guarantee Trustee shall be unqualified or incompetent in accordance with applicable law to perform any such act or acts or to exercise any such right, power, duty or obligation. No permissive power or authority available to
the Guarantee Trustee shall be construed to be a duty. 
 SECTION 2.3. Not Responsible for Recitals or Issuance of Guarantee. 
 The recitals contained in this Guarantee shall be taken as the statements of the Guarantor, and the Guarantee Trustee does not assume any responsibility
for their correctness. The Guarantee Trustee makes no representation as to the validity or sufficiency of this Guarantee. 
 SECTION 2.4. Events of
Default; Waiver. 
 (a) An Event of Default under this Guarantee will occur upon the failure of the Guarantor to perform
any of its payment or other obligations hereunder. 
 (b) The Holders of a Majority in liquidation amount of the Capital
Securities may, voting or consenting as a class, on behalf of the Holders of all of the Capital Securities, waive any past Event of Default and its consequences. Upon such waiver, any 

  

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such Event of Default shall cease to exist, and shall be deemed to have been cured, for every purpose of this Guarantee, but no such waiver shall extend to
any subsequent or other default or Event of Default or impair any right consequent thereon. 
 SECTION 2.5. Events of Default; Notice. 
 (a) The Guarantee Trustee shall, within 90 days after the occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Capital Securities, notices of all Events of Default actually known to a Responsible Officer of the Guarantee Trustee, unless such defaults have been cured before the giving of such notice; provided,
however, that the Guarantee Trustee shall be protected in withholding such notice if and so long as a Responsible Officer of the Guarantee Trustee in good faith determines that the withholding of such notice is in the interests of the Holders
of the Capital Securities. 
 (b) The Guarantee Trustee shall not be charged with knowledge of any Event of Default unless the
Guarantee Trustee shall have received written notice thereof from the Guarantor or a Holder of the Capital Securities, or a Responsible Officer of the Guarantee Trustee charged with the administration of this Guarantee shall have actual knowledge
thereof. 
 ARTICLE III 
 THE
GUARANTEE TRUSTEE 
 SECTION 3.1. The Guarantee Trustee; Eligibility. 
 (a) There shall at all times be a Guarantee Trustee which shall: 
 (i) not be an Affiliate of the Guarantor; and 
 (ii) be a corporation or national association organized and doing business under the laws of the United States of America or any state or
territory thereof or of the District of Columbia, or Person authorized under such laws to exercise 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, territorial 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 supervising or examining
authority referred to above, then, for the purposes of this Section 3.1(a)(ii), the combined capital and surplus of such corporation or national association shall be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. 
 (b) If at any time the Guarantee Trustee shall cease to be eligible to so act under
Section 3.1(a), the Guarantee Trustee shall immediately resign in the manner and with the effect set forth in Section 3.2(c). 
  

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 (c) If the Guarantee Trustee has or shall acquire any “conflicting interest”
within the meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee shall either eliminate such interest or resign to the extent and in the manner provided by, and subject to, this Guarantee. 
 SECTION 3.2. Appointment, Removal and Resignation of the Guarantee Trustee. 
 (a) Subject to Section 3.2(b), the Guarantee Trustee may be appointed or removed without cause at any time by the Guarantor except
during an Event of Default. 
 (b) The Guarantee Trustee shall not be removed in accordance with Section 3.2(a) until a
Successor Guarantee Trustee has been appointed and has accepted such appointment by written instrument executed by such Successor Guarantee Trustee and delivered to the Guarantor. 
 (c) The Guarantee Trustee appointed to office shall hold office until a Successor Guarantee Trustee shall have been appointed or until its
removal or resignation. The Guarantee Trustee may resign from office (without need for prior or subsequent accounting) by an instrument in writing executed by the Guarantee Trustee and delivered to the Guarantor, which resignation shall not take
effect until a Successor Guarantee Trustee has been appointed and has accepted such appointment by an instrument in writing executed by such Successor Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee Trustee. 

(d) If no Successor Guarantee Trustee shall have been appointed and accepted appointment as provided in this Section 3.2 within 60
days after delivery of an instrument of removal or resignation, the Guarantee Trustee resigning or being removed may, at the Guarantor’s expense, petition any court of competent jurisdiction for appointment of a Successor Guarantee Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a Successor Guarantee Trustee. 
 (e) No Guarantee Trustee shall be liable for the acts or omissions to act of any Successor Guarantee Trustee. 
 (f)
Upon termination of this Guarantee or removal or resignation of the Guarantee Trustee pursuant to this Section 3.2, the Guarantor shall pay to the Guarantee Trustee all amounts owing to the Guarantee Trustee under Sections 7.2 and 7.3 accrued
to the date of such termination, removal or resignation. 
 (g) Any Person into which the Guarantee Trustee may be merged or
converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Guarantee Trustee shall be a party, or any Person succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Guarantee 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 Person shall be otherwise
eligible and qualified under this Article. 
  

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

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 (c) any failure, omission, delay or lack of diligence on the part of the Holders to
enforce, assert or exercise any right, privilege, power or remedy conferred on the Holders pursuant to the terms of the Capital Securities, or any action on the part of the Issuer granting indulgence or extension of any kind; 
 (d) the voluntary or involuntary liquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy, assignment for
the benefit of creditors, reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the Issuer or any of the assets of the Issuer; 
 (e) any invalidity of, or defect or deficiency in, the Capital Securities; 
 (f) the settlement or compromise of any obligation guaranteed hereby or hereby incurred; or 
 (g) any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 4.3 that the obligations of the Guarantor hereunder shall be absolute and unconditional under any and all circumstances. 
 There shall be no obligation of the Holders to give notice to, or obtain consent of, the Guarantor with respect to the happening of any of the foregoing. 
 SECTION 4.4. Rights of Holders. 
 (a) The Holders of a Majority in liquidation amount
of the Capital Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee in respect of this Guarantee or to direct the exercise of any trust or power conferred upon
the Guarantee Trustee under this Guarantee; provided, however, that (subject to Sections 2.1 and 2.2) the Guarantee Trustee shall have the right to decline to follow any such direction if the Guarantee Trustee shall determine that the
actions so directed would be unjustly prejudicial to the Holders not taking part in such direction or if the Guarantee Trustee being advised by legal counsel determines that the action or proceeding so directed may not lawfully be taken or if the
Guarantee Trustee in good faith by its board of directors or trustees, executive committee or a trust committee of directors or trustees and/or Responsible Officers shall determine that the action or proceeding so directed would involve the
Guarantee Trustee in personal liability. 
 (b) Any Holder of Capital Securities may institute a legal proceeding directly
against the Guarantor to enforce the Guarantee Trustee’s rights under this Guarantee, without first instituting a legal proceeding against the Issuer, the Guarantee Trustee or any other Person. The Guarantor waives any right or remedy to
require that any such action be brought first against the Issuer, the Guarantee Trustee or any other Person before so proceeding directly against the Guarantor. 
  

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 SECTION 4.5. Guarantee of Payment. 
 This Guarantee creates a guarantee of payment and not of collection. 
 SECTION 4.6. Subrogation. 
 The Guarantor shall be subrogated to all (if any) rights of the Holders of Capital Securities against the Issuer in respect of any amounts paid to such
Holders by the Guarantor under this Guarantee; provided, however, that the Guarantor shall not (except to the extent required by applicable provisions of law) be entitled to enforce or exercise any right that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of payment under this Guarantee, if, after giving effect to any such payment, any amounts are due and unpaid under this Guarantee. If any amount shall be paid
to the Guarantor in violation of the preceding sentence, the Guarantor agrees to hold such amount in trust for the Holders and to pay over such amount to the Holders. 
 SECTION 4.7. Independent Obligations. 
 The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Capital Securities and that the Guarantor shall be liable as principal and as debtor hereunder to make Guarantee Payments pursuant to the terms of this Guarantee notwithstanding the
occurrence of any event referred to in subsections (a) through (g), inclusive, of Section 4.3 hereof. 
 SECTION 4.8. Enforcement.

 A Beneficiary may enforce the Obligations of the Guarantor contained in Section 4.1(b) directly against the Guarantor, and the
Guarantor waives any right or remedy to require that any action be brought against the Issuer or any other person or entity before proceeding against the Guarantor. 
 The Guarantor shall be subrogated to all rights (if any) of any Beneficiary against the Issuer in respect of any amounts paid to the Beneficiaries by the Guarantor under this Guarantee; provided,
however, that the Guarantor shall not (except to the extent required by applicable provisions of law) be entitled to enforce or exercise any rights that it may acquire by way of subrogation or any indemnity, reimbursement or other agreement,
in all cases as a result of payment under this Guarantee, if, after giving effect to such payment, any amounts are due and unpaid under this Guarantee. 
 ARTICLE V 
 LIMITATION OF TRANSACTIONS; SUBORDINATION 
 SECTION 5.1. Limitation of Transactions. 
 So long as
any Capital Securities remain outstanding, if (a) there shall have occurred and be continuing an Event of Default or (b) the Guarantor shall have selected an Extension Period as provided in the Declaration and such period, or any extension
thereof, shall have commenced and be continuing, then the Guarantor may not (x) declare or pay any 

  

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dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of the Guarantor’s capital stock or
(y) make any payment of principal of or interest or premium, if any, on or repay, repurchase or redeem any debt securities of the Guarantor that rank pari passu in all respects with or junior in interest to the Debentures (other than
(i) payments under this Guarantee, (ii) repurchases, redemptions or other acquisitions of shares of capital stock of the Guarantor (A) in connection with any employment contract, benefit plan or other similar arrangement with or for
the benefit of one or more employees, officers, directors, or consultants, (B) in connection with a dividend reinvestment or stockholder stock purchase plan or (C) in connection with the issuance of capital stock of the Guarantor (or
securities convertible into or exercisable for such capital stock), as consideration in an acquisition transaction entered into prior to the occurrence of the Event of Default or the applicable Extension Period, (iii) as a result of any
exchange, reclassification, combination or conversion of any class or series of the Guarantor’s capital stock (or any capital stock of a subsidiary of the Guarantor) for any class or series of the Guarantor’s capital stock or of any class
or series of the Guarantor’s indebtedness for any class or series of the Guarantor’s capital stock, (iv) the purchase of fractional interests in shares of the Guarantor’s capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged, (v) any declaration of a dividend in connection with any stockholder’s rights plan, or the issuance of rights, stock or other property under any
stockholder’s rights plan, or the redemption or repurchase of rights pursuant thereto, or (vi) any dividend in the form of stock, warrants, options or other rights where the dividend stock or the stock issuable upon exercise of such
warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks pari passu with or junior to such stock). 
 SECTION 5.2. Ranking. 
 This Guarantee will constitute an unsecured obligation of the Guarantor and will rank subordinate and
junior in right of payment to all present and future Senior Indebtedness (as defined in the Indenture) of the Guarantor. By their acceptance thereof, each Holder of Capital Securities agrees to the foregoing provisions of this Guarantee and the
other terms set forth herein. 
 The right of the Guarantor to participate in any distribution of assets of any of its subsidiaries upon any
such subsidiary’s liquidation or reorganization or otherwise is subject to the prior claims of creditors of that subsidiary, except to the extent the Guarantor may itself be recognized as a creditor of that subsidiary. Accordingly, the
Guarantor’s obligations under this Guarantee will be effectively subordinated to all existing and future liabilities of the Guarantor’s subsidiaries, and claimants should look only to the assets of the Guarantor for payments thereunder.
This Guarantee does not limit the incurrence or issuance of other secured or unsecured debt of the Guarantor, including Senior Indebtedness of the Guarantor, under any indenture or agreement that the Guarantor may enter into in the future or
otherwise. 
  

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 ARTICLE VI 
 TERMINATION 
 SECTION 6.1. Termination. 
 This Guarantee shall terminate as to the Capital Securities (i) upon full payment of the Redemption Price or the Special Redemption Price, as the case may be, of all Capital Securities then outstanding,
(ii) upon the distribution of all of the Debentures to the Holders of all of the Capital Securities or (iii) upon full payment of the amounts payable in accordance with the Declaration upon dissolution of the Issuer. This Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any time any Holder of Capital Securities must restore payment of any sums paid under the Capital Securities or under this Guarantee. 
 ARTICLE VII 
 INDEMNIFICATION 
 SECTION 7.1. Exculpation. 
 (a) No
Indemnified Person shall be liable, responsible or accountable in damages or otherwise to the Guarantor or any Covered Person for any loss, damage or claim incurred by reason of any act or omission of such Indemnified Person in good faith in
accordance with this Guarantee and in a manner that such Indemnified Person reasonably believed to be within the scope of the authority conferred on such Indemnified Person by this Guarantee or by law, except that an Indemnified Person shall be
liable for any such loss, damage or claim incurred by reason of such Indemnified Person’s negligence or willful misconduct with respect to such acts or omissions. 
 (b) An Indemnified Person shall be fully protected in relying in good faith upon the records of the Issuer or the Guarantor and upon such
information, opinions, reports or statements presented to the Issuer or the Guarantor by any Person as to matters the Indemnified Person reasonably believes are within such other Person’s professional or expert competence and who, if selected
by such Indemnified Person, has been selected with reasonable care by such Indemnified Person, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to Holders of Capital Securities might properly be paid. 
 SECTION 7.2.
Indemnification. 
 (a) The Guarantor agrees to indemnify each Indemnified Person for, and to hold each Indemnified
Person harmless against, any and all loss, liability, damage, claim or expense incurred without negligence or willful misconduct on the part of the Indemnified Person, arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including but not limited to the costs and expenses (including reasonable legal fees and expenses) of the Indemnified Person defending itself against, or investigating, any claim or liability in connection with the
exercise or performance of any of the Indemnified Person’s powers or duties hereunder. The obligation to indemnify as set forth in this Section 7.2 shall survive the resignation or removal of the Guarantee Trustee and the termination of
this Guarantee. 
  

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 (b) Promptly after receipt by an Indemnified Person under this Section 7.2 of notice
of the commencement of any action, such Indemnified Person will, if a claim in respect thereof is to be made against the Guarantor under this Section 7.2, notify the Guarantor in writing of the commencement thereof; but the failure so to notify
the Guarantor (i) will not relieve the Guarantor from liability under paragraph (a) above unless and to the extent that the Guarantor did not otherwise learn of such action and such failure results in the forfeiture by the Guarantor of
substantial rights and defenses and (ii) will not, in any event, relieve the Guarantor from any obligations to any Indemnified Person other than the indemnification obligation provided in paragraph (a) above. The Guarantor shall be
entitled to appoint counsel of the Guarantor’s choice at the Guarantor’s expense to represent the Indemnified Person in any action for which indemnification is sought (in which case the Guarantor shall not thereafter be responsible for the
fees and expenses of any separate counsel retained by the Indemnified Person or Persons except as set forth below); provided, however, that such counsel shall be satisfactory to the Indemnified Person. Notwithstanding the
Guarantor’s election to appoint counsel to represent the Indemnified Person in any action, the Indemnified Person shall have the right to employ separate counsel (including local counsel), and the Guarantor shall bear the reasonable fees, costs
and expenses of such separate counsel (and local counsel), if (i) the use of counsel chosen by the Guarantor to represent the Indemnified Person would present such counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the Indemnified Person and the Guarantor and the Indemnified Person shall have reasonably concluded that there may be legal defenses available to it and/or other Indemnified Persons which
are different from or additional to those available to the Guarantor, (iii) the Guarantor shall not have employed counsel satisfactory to the Indemnified Person to represent the Indemnified Person within a reasonable time after notice of the
institution of such action or (iv) the Guarantor shall authorize the Indemnified Person to employ separate counsel at the expense of the Guarantor. The Guarantor will not, without the prior written consent of the Indemnified Persons, settle or
compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the Indemnified Persons are
actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each Indemnified Person from all liability arising out of such claim, action, suit or proceeding. 
 SECTION 7.3. Compensation; Reimbursement of Expenses. 
 Other than as provided in the Fee Agreement of even date herewith among the Guarantor, Wells Fargo Delaware Trust Company and the Guarantee Trustee, the Guarantor agrees: 
 (a) to pay to the Guarantee Trustee from time to time such compensation for all services rendered by it hereunder as the parties shall
agree to from time to time (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); and 
  

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 (b) except as otherwise expressly provided herein, to reimburse the Guarantee Trustee
upon request for all reasonable expenses, disbursements and advances incurred or made by it in accordance with any provision of this Guarantee (including the reasonable compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to its negligence or willful misconduct. 
 The provisions of this
Section 7.3 shall survive the resignation or removal of the Guarantee Trustee and the termination of this Guarantee. 
 ARTICLE VIII

 MISCELLANEOUS 
 SECTION 8.1. Successors and
Assigns. 
 All guarantees and agreements contained in this Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders of the Capital Securities then outstanding. Except in connection with any merger or consolidation of the Guarantor with or into another entity or any sale, transfer or
lease of the Guarantor’s assets or capital stock to another entity, in each case to the extent permitted under the Indenture, the Guarantor may not assign its rights or delegate its obligations under this Guarantee without the prior approval of
the Holders of not less than a Majority in liquidation amount of the Capital Securities. 
 SECTION 8.2. Amendments. 
 Except with respect to any changes that do not adversely affect the rights of Holders of the Capital Securities in any material respect (in which case no
consent of Holders will be required), this Guarantee may be amended only with the prior approval of the Holders of not less than a Majority in liquidation amount of the Capital Securities. The provisions of the Declaration with respect to amendments
thereof shall apply equally with respect to amendments of the Guarantee. 
 SECTION 8.3. Notices. 
 All notices provided for in this Guarantee shall be in writing, duly signed by the party giving such notice, and shall be delivered, telecopied or mailed
by first class mail, as follows: 
 (a) If given to the Guarantee Trustee, at the Guarantee Trustee’s mailing address set
forth below (or such other address as the Guarantee Trustee may give notice of to the Holders of the Capital Securities): 
  

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 Wells Fargo Bank, National Association 
 919 North Market Street, Suite 1600 
 Wilmington, DE 19801 
 Attention: Corporate Trust Division 
 Telecopy: 302-575-2006 
 Telephone: 302-575-2005 
 (b) If given to the Guarantor, at the Guarantor’s mailing
address set forth below (or such other address as the Guarantor may give notice of to the Holders of the Capital Securities and to the Guarantee Trustee): 
 Bank of the Carolinas Corporation 
 135 Boxwood Village Drive 
 Mocksville, North Carolina 27028 
 Attention: Eric E. Rhodes 
 Telecopy: (336) 751-1116 
 Telephone: (336) 751-5755 
 (c) If given to any Holder of the Capital Securities, at the address set forth on the books and records of the Issuer. 
 All such notices shall be deemed to have been given when received in person, telecopied with receipt confirmed, or mailed by first class mail, postage prepaid, except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice was given, such notice or other document shall be deemed to have been delivered on the date of such refusal or inability to deliver. 
 SECTION 8.4. Benefit. 
 This Guarantee is solely for
the benefit of the Holders of the Capital Securities and, subject to Section 2.1(a), is not separately transferable from the Capital Securities. 
 SECTION 8.5. Governing Law. 
 THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW). 
 SECTION 8.6.
Counterparts. 
 This Guarantee may contain more than one counterpart of the signature page and this Guarantee may be executed by the
affixing of the signature of the Guarantor and the Guarantee Trustee to any of such counterpart signature pages. All of such counterpart signature pages shall be read as though one, and they shall have the same force and effect as though all of the
signers had signed a single signature page. 
  

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 THIS GUARANTEE is executed as of the day and year first above written. 
  

			
	 BANK OF THE CAROLINAS
 CORPORATION, as Guarantor

		
	 By:
	 	 /s/ Eric E. Rhodes

	 Name:
	 	Eric E. Rhodes
	 Title:
	 	Vice President and CFO
	
	 WELLS FARGO BANK, NATIONAL
 ASSOCIATION, as Guarantee Trustee

		
	 By:
	 	 /s/ Amy L. Martin

	 Name:
	 	Amy L. Martin
	 Title:
	 	Vice President

  

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