Document:

Exhibit 10.1

 

Exhibit 10.1

 

 

AMENDED AND RESTATED DECLARATION

OF TRUST

by and among

WILMINGTON TRUST COMPANY,

as Delaware Trustee,

WILMINGTON TRUST COMPANY,

as Institutional Trustee,

TSB FINANCIAL CORPORATION,

as Sponsor,

and

JOHN B. STEDMAN, JR. and JAN H. HOLLAR,

as Administrators,

Dated as of December 14, 2006

 

 

 

 

TABLE OF CONTENTS

	 	 	 
	 	 	Page
	ARTICLE I INTERPRETATION AND DEFINITIONS
	 	1
	Section 1.1. Definitions
	 	1
	 
	 	 
	ARTICLE II ORGANIZATION
	 	7
	Section 2.1. Name
	 	7
	Section 2.2. Office
	 	7
	Section 2.3. Purpose
	 	7
	Section 2.4. Authority
	 	8
	Section 2.5. Title to Property of the Trust
	 	8
	Section 2.6. Powers and Duties of the Trustees and the Administrators
	 	8
	Section 2.7. Prohibition of Actions by the Trust and the Institutional Trustee
	 	11
	Section 2.8. Powers and Duties of the Institutional Trustee
	 	12
	Section 2.9. Certain Duties and Responsibilities of the Trustees and Administrators
	 	13
	Section 2.10. Certain Rights of Institutional Trustee
	 	14
	Section 2.11. Delaware Trustee
	 	16
	Section 2.12. Execution of Documents
	 	17
	Section 2.13. Not Responsible for Recitals or Issuance of Securities
	 	17
	Section 2.14. Duration of Trust
	 	17
	Section 2.15. Mergers
	 	17
	 
	 	 
	ARTICLE III SPONSOR
	 	18
	Section 3.1. Sponsor’s Purchase of Common Securities
	 	18
	Section 3.2. Responsibilities of the Sponsor
	 	18
	Section 3.3. Expenses
	 	19
	Section 3.4. Right to Proceed
	 	19
	 
	 	 
	ARTICLE IV INSTITUTIONAL TRUSTEE AND ADMINISTRATORS
	 	19
	Section 4.1. Number of Trustees
	 	19
	Section 4.2. Delaware Trustee; Eligibility
	 	20
	Section 4.3. Institutional Trustee; Eligibility
	 	20
	Section 4.4. Administrators
	 	20
	Section 4.5. Appointment, Removal and Resignation of Trustees and Administrators
	 	21
	Section 4.6. Vacancies Among Trustees
	 	22
	Section 4.7. Effect of Vacancies
	 	22
	Section 4.8. Meetings of the Trustees and the Administrators
	 	22
	Section 4.9. Delegation of Power
	 	23
	Section 4.10. Conversion, Consolidation or Succession to Business
	 	23
	 
	 	 
	ARTICLE V DISTRIBUTIONS
	 	23
	Section 5.1. Distributions
	 	23
	 
	 	 
	ARTICLE VI ISSUANCE OF SECURITIES
	 	24
	Section 6.1. General Provisions Regarding Securities
	 	24
	Section 6.2. Paying Agent, Transfer Agent and Registrar
	 	24
	Section 6.3. Form and Dating
	 	25
	Section 6.4. Mutilated, Destroyed, Lost or Stolen Certificates
	 	25
	Section 6.5. Temporary Securities
	 	25

  i

 

 

	 	 	 
	Section 6.6. Cancellation
	 	26
	Section 6.7. Rights of Holders; Waivers of Past Defaults
	 	26
	 
	 	 
	ARTICLE VII DISSOLUTION AND TERMINATION OF TRUST
	 	27
	Section 7.1. Dissolution and Termination of Trust
	 	27
	 
	 	 
	ARTICLE VIII TRANSFER OF INTERESTS
	 	28
	Section 8.1. General
	 	28
	Section 8.2. Transfer Procedures and Restrictions
	 	29
	Section 8.3. Deemed Security Holders
	 	31
	 
	 	 
	ARTICLE IX LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, INSTITUTIONAL TRUSTEE OR OTHERS
	 	31
	Section 9.1. Liability
	 	31
	Section 9.2. Exculpation
	 	32
	Section 9.3. Fiduciary Duty
	 	32
	Section 9.4. Indemnification
	 	32
	Section 9.5. Outside Businesses
	 	34
	Section 9.6. Compensation; Fee
	 	35
	 
	 	 
	ARTICLE X ACCOUNTING
	 	35
	Section 10.1. Fiscal Year
	 	35
	Section 10.2. Certain Accounting Matters
	 	35
	Section 10.3. Banking
	 	36
	Section 10.4. Withholding
	 	36
	 
	 	 
	ARTICLE XI AMENDMENTS AND MEETINGS
	 	36
	Section 11.1. Amendments
	 	36
	Section 11.2. Meetings of the Holders of Securities; Action by Written Consent
	 	38
	 
	 	 
	ARTICLE XII REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND THE DELAWARE TRUSTEE
	 	39
	Section 12.1. Representations and Warranties of Institutional Trustee
	 	39
	Section 12.2. Representations of the Delaware Trustee
	 	39
	 
	 	 
	ARTICLE XIII MISCELLANEOUS
	 	40
	Section 13.1. Notices
	 	40
	Section 13.2. Governing Law
	 	41
	Section 13.3. Intention of the Parties
	 	41
	Section 13.4. Headings
	 	41
	Section 13.5. Successors and Assigns
	 	41
	Section 13.6. Partial Enforceability
	 	42
	Section 13.7. Counterparts
	 	42

	 	 	 	 	 
	Annex I

	 	Terms of Securities	 	 
	Exhibit A-1

	 	Form of Capital Security Certificate
	 	 
	Exhibit A-2

	 	Form of Common Security Certificate	 	 
	Exhibit B

	 	Specimen of Initial Debenture	 	 
	Exhibit C

	 	Placement Agreement	 	 

  ii

 

 

AMENDED AND RESTATED

DECLARATION OF TRUST

OF

TSB STATUTORY TRUST I

December 14, 2006

     AMENDED AND RESTATED DECLARATION OF TRUST (“Declaration”) dated and effective as of
December 14, 2006, by the Trustees (as defined herein), the Administrators (as defined herein), the
Sponsor (as defined herein) and by the holders, from time to time, of undivided beneficial
interests in the Trust (as defined herein) to be issued pursuant to this Declaration;

     WHEREAS, the Trustees, the Administrators and the Sponsor established TSB Statutory Trust I
(the “Trust”), a statutory trust under the Statutory Trust Act (as defined herein) pursuant
to a Declaration of Trust dated as of December 1, 2006 (the “Original Declaration”), and a
Certificate of Trust filed with the Secretary of State of the State of Delaware on December 1,
2006, for the sole purpose of issuing and selling certain securities representing undivided
beneficial interests in the assets of the Trust and investing the proceeds thereof in certain
debentures of the Debenture Issuer (as defined herein);

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

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

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

ARTICLE I

INTERPRETATION AND DEFINITIONS

     Section 1.1. Definitions. Unless the context otherwise requires:

     (a) Capitalized terms used in this Declaration 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 Declaration has the same meaning throughout;

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

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

     (e) a reference to the singular includes the plural and vice versa.

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

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

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

     “Administrators” means each of John B. Stedman, Jr. and Jan H. Hollar, solely in such
Person’s capacity as Administrator of the Trust created and continued hereunder and not in such
Person’s individual capacity, or such Administrator’s successor in interest in such capacity, or
any successor appointed as herein provided.

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

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

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

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

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

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

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

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

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

     “Certificate” means any certificate evidencing Securities.

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

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

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

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

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

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

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

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

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

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

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

     “Debentures” means the Floating Rate Junior Subordinated Deferrable Interest
Debentures due 2036 to be issued by the Debenture Issuer under the Indenture.

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

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

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

     “Direct Action” has the meaning set forth in Section 2.8(d).

     “Distribution” means a distribution payable to Holders of Securities in accordance
with Section 5.1.

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

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

     “Distribution Rate” means, for the Distribution Period beginning on (and including)
the date of original issuance and ending on (but excluding) the Distribution Payment Date in March
2007, the rate per annum of 7.07%, and for each Distribution Period beginning on or after the
Distribution Payment Date in March 2007, the Coupon Rate for such Distribution Period.

3

 

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

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

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

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

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

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

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

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

     “Fiscal Year” has the meaning set forth in Section 10.1.

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

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

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

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

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

     “Institutional Trustee” means the Trustee meeting the eligibility requirements set
forth in Section 4.3.

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

4

 

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

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

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

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

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

     “Majority in liquidation amount of the Securities” means Holder(s) of outstanding
Securities voting together as a single class or, as the context may require, Holders of outstanding
Capital Securities or Holders of outstanding Common Securities voting separately as a class, who
are the record owners of more than 50% of the aggregate liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.

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

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

     (a) a statement that each Person signing the Certificate has read the covenant or condition
and the definitions relating thereto;

     (b) a brief statement of the nature and scope of the examination or investigation undertaken
by each Person in rendering the Certificate;

     (c) a statement that each such Person has made such examination or investigation as, in such
officer’s opinion, is necessary to enable such Person 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 Person, such condition or covenant
has been complied with.

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

     “Paying Agent” has the meaning specified in Section 6.2.

     “Person” means a legal person, including any individual, corporation, estate,
partnership, joint venture, association, joint stock company, limited liability company, trust,
unincorporated association, or government or any agency or political subdivision thereof, or any
other entity of whatever nature.

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

     “Property Account” has the meaning set forth in Section 2.8(c).

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

5

 

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

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

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

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

     “Registrar” has the meaning set forth in Section 6.2.

     “Relevant Trustee” has the meaning set forth in Section 4.5(a).

     “Responsible Officer” means, with respect to the Institutional Trustee, any officer
within the Corporate Trust Office of the Institutional Trustee, including any vice-president, any
assistant vice-president, any assistant secretary, the treasurer, any assistant treasurer, any
trust officer or other officer of the Corporate Trust Office of the Institutional Trustee
customarily performing functions similar to those performed by any of the above designated officers
and also means, with respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer’s knowledge of and familiarity with the particular
subject.

     “Restricted Securities Legend” has the meaning set forth in Section 8.2(b).

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

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

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

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

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

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

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

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

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

     “Successor Entity” has the meaning set forth in Section 2.15(b).

     “Successor Delaware Trustee” has the meaning set forth in Section 4.5(e).

     “Successor Institutional Trustee” has the meaning set forth in Section 4.5(b).

     “Successor Securities” has the meaning set forth in Section 2.15(b).

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

6

 

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

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

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

     “Transfer Agent” has the meaning set forth in Section 6.2.

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

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

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

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

ARTICLE II

ORGANIZATION

     Section 2.1. Name. The Trust is named “TSB Statutory Trust I,” as such name may be
modified from time to time by the Administrators following written notice to the Holders of the
Securities. The Trust’s activities may be conducted under the name of the Trust or any other name
deemed advisable by the Administrators.

     Section 2.2. Office. The address of the principal office of the Trust is c/o
Wilmington Trust Company, Rodney Square North, 1100 North Market Street, Wilmington, Delaware
19890-1600. On at least 10 Business Days written notice to the Holders of the Securities, the
Administrators may designate another principal office, which shall be in a state of the United
States or in the District of Columbia.

     Section 2.3. Purpose. The exclusive purposes and functions of the Trust are (a) to
issue and sell the Securities representing undivided beneficial interests in the assets of the
Trust, (b) to invest the gross proceeds from such sale to acquire the Debentures, (c) to facilitate
direct investment in the assets of the Trust through issuance of the Common Securities and the
Capital Securities and (d) except as otherwise limited herein, to engage in only those other
activities necessary or incidental thereto. The Trust shall not borrow money, issue debt or
reinvest proceeds derived from investments, pledge any of its assets, or otherwise undertake (or
permit to be undertaken) any activity that would cause the Trust not to be classified for United
States federal income tax purposes as a grantor trust.

7

 

     Section 2.4. Authority. Except as specifically provided in this Declaration, the
Institutional Trustee shall have exclusive and complete authority to carry out the purposes of the
Trust. An action taken by a Trustee in accordance with its powers shall constitute the act of and
serve to bind the Trust. In dealing with the Trustees acting on behalf of the Trust, no Person
shall be required to inquire into the authority of the Trustees to bind the Trust. Persons dealing
with the Trust are entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration. The Administrators shall have only those ministerial duties set forth
herein with respect to accomplishing the purposes of the Trust and are not intended to be trustees
or fiduciaries with respect to the Trust or the Holders. The Institutional Trustee shall have the
right, but shall not be obligated except as provided in Section 2.6, to perform those duties
assigned to the Administrators.

     Section 2.5. Title to Property of the Trust. Except as provided in Section 2.8 with
respect to the Debentures and the Property Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The Holders shall not have
legal title to any part of the assets of the Trust, but shall have an undivided beneficial interest
in the assets of the Trust.

     Section 2.6. Powers and Duties of the Trustees and the Administrators.

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

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

     (A) the issuance and sale of the Securities;

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

     (C) ensuring compliance with the Securities Act and applicable state securities
or blue sky laws;

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

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

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

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

8

 

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

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

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

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

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

     (A) the establishment of the Property Account;

     (B) the receipt of the Debentures;

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

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

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

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

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

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

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

9

 

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

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

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

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

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

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

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

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

     (d) Notwithstanding anything herein to the contrary, the Administrators and the Holders of a
Majority in liquidation amount of the Common Securities are authorized and directed to conduct the
affairs of the Trust and to operate the Trust so that the Trust will not (i) be deemed to be an
Investment

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Company required to be registered under the Investment Company Act, or (ii) fail to be
classified as a “grantor trust” for United States federal income tax purposes. The Administrators
and the Holders of a Majority in liquidation amount of the Common Securities shall not take any
action inconsistent with the treatment of the Debentures as indebtedness of the Debenture Issuer
for United States federal income tax purposes. The Administrators and the Holders of a Majority in
liquidation amount of the Common Securities are authorized to take any action, not inconsistent
with applicable laws, the Certificate of Trust or this Declaration, as amended from time to time,
that each of the Administrators and the Holders of a Majority in liquidation amount of the Common
Securities determines in their discretion to be necessary or desirable for such purposes.

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

     (f) The assets of the Trust shall consist of the Trust Property.

     (g)
Except as provided in Section 2.8 with respect to the Debentures and the Property Account or
as otherwise provided in this Declaration, legal title to all Trust Property shall be vested at all
times in the Trust and shall be held and administered by the Institutional Trustee and the
Administrators for the benefit of the Trust in accordance with this Declaration.

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

     Section 2.7. Prohibition of Actions by the Trust and the Institutional Trustee.

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

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

     (ii) acquire any assets other than as expressly provided herein;

     (iii) possess Trust Property for other than a Trust purpose;

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

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

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

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

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

     Section 2.8. Powers and Duties of the Institutional Trustee.

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

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

     (c) The Institutional Trustee shall:

     (i) establish and maintain a segregated non-interest bearing trust account (the
“Property Account”) in the name of and under the exclusive control of the
Institutional Trustee, and maintained in the Institutional Trustee’s trust department, on
behalf of the Holders of the Securities and, upon the receipt of payments of funds made in
respect of the Debentures held by the Institutional Trustee, deposit such funds into the
Property Account and make payments, or cause the Paying Agent to make payments, to the
Holders of the Capital Securities and Holders of the Common Securities from the Property
Account in accordance with Section 5.1. Funds in the Property Account shall be held
uninvested until disbursed in accordance with this Declaration;

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

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

     (d) The Institutional Trustee may bring or defend, pay, collect, compromise, arbitrate, resort
to legal action with respect to, or otherwise adjust claims or demands of or against, the Trust
which arises out of or in connection with an Event of Default of which a Responsible Officer of the
Institutional Trustee has actual knowledge or arises out of the Institutional Trustee’s duties and
obligations under this Declaration; provided, however, that if an Event of Default
has occurred and is continuing and such event is attributable to the failure of the Debenture
Issuer to pay interest or principal on the Debentures on the

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

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

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

     (ii) a Successor Institutional Trustee has been appointed and has accepted that
appointment in accordance with Section 4.5.

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

     The Institutional Trustee must exercise the powers set forth in this Section 2.8 in a manner
that is consistent with the purposes and functions of the Trust set out in Section 2.3, and the
Institutional Trustee shall not take any action that is inconsistent with the purposes and
functions of the Trust set out in Section 2.3.

     Section 2.9. Certain Duties and Responsibilities of the Trustees and Administrators.

     (a) The Institutional Trustee, before the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred, shall undertake to perform
only such duties as are specifically set forth in this Declaration and no implied covenants shall
be read into this Declaration against the Institutional Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 6.7), the Institutional Trustee
shall exercise such of the rights and powers vested in it by this Declaration, and use the same
degree of care and skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.

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

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such Trustee or such Administrator shall not be liable to the Trust or to any Holder for such
Trustee’s or such Administrator’s good faith reliance on the provisions of this Declaration. The
provisions of this Declaration, to the extent that they restrict the duties and liabilities of the
Administrators or the Trustees otherwise existing at law or in equity, are agreed by the Sponsor
and the Holders to replace such other duties and liabilities of the Administrators or the Trustees.

     (c) All payments made by the Institutional Trustee or a Paying Agent in respect of the
Securities shall be made only from the revenue and proceeds from the Trust Property and only to the
extent that there shall be sufficient revenue or proceeds from the Trust Property to enable the
Institutional Trustee or a Paying Agent to make payments in accordance with the terms hereof. Each
Holder, by its acceptance of a Security, agrees that it will look solely to the revenue and
proceeds from the Trust Property to the extent legally available for distribution to it as herein
provided and that the Trustees and the Administrators are not personally liable to it for any
amount distributable in respect of any Security or for any other liability in respect of any
Security. This Section 2.9(c) does not limit the liability of the Trustees expressly set forth
elsewhere in this Declaration.

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

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

     (ii) the Institutional Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the Holders of
not less than a Majority in liquidation amount of the Capital Securities or the Common
Securities, as applicable, relating to the time, method and place of conducting any
proceeding for any remedy available to the Institutional Trustee, or exercising any trust or
power conferred upon the Institutional Trustee under this Declaration;

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

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

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

     Section 2.10. Certain Rights of Institutional Trustee. Subject to the provisions of
Section 2.9:

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

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

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

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

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

     (f) the Institutional Trustee may consult with counsel of its selection (which counsel may be
counsel to the Sponsor or any of its Affiliates) and the advice of such counsel shall be full and
complete authorization and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon and in accordance with such advice; the
Institutional Trustee shall have the right at any time to seek instructions concerning the
administration of this Declaration from any court of competent jurisdiction;

     (g) the Institutional Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Declaration at the request or direction of any of the Holders pursuant
to this Declaration, unless such Holders shall have offered to the Institutional Trustee security
or indemnity reasonably satisfactory to it against the costs, expenses and liabilities which might
be incurred by it in compliance with such request or direction; provided, that nothing
contained in this Section 2.10(g) shall be taken to relieve the Institutional Trustee, subject to
Section 2.9(b), upon the occurrence of an Event of Default (that has not been cured or waived
pursuant to Section 6.7), to exercise such of the rights and powers vested in it by this
Declaration, and use the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own affairs;

     (h) the Institutional Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order,
approval, bond, debenture, note or other evidence of indebtedness or other paper or

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document,
unless requested in writing to do so by one or more Holders, but the Institutional Trustee may make
such further inquiry or investigation into such facts or matters as it may see fit;

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

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

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

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

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

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

     (o) no provision of this Declaration shall be deemed to impose any duty or obligation on the
Institutional Trustee to perform any act or acts or exercise any right, power, duty or obligation
conferred
or imposed on it, in any jurisdiction in which it shall be illegal, or in which the
Institutional Trustee shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Institutional Trustee shall be construed to be a
duty.

     Section 2.11. Delaware Trustee. Notwithstanding any other provision of this
Declaration other than Section 4.2, the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and responsibilities of any of the
Trustees or the Administrators described in this Declaration (except as may be required under the
Statutory Trust Act). Except as set forth in Section 4.2, the Delaware Trustee shall be a Trustee
for the sole and limited purpose of fulfilling the requirements of § 3807 of the Statutory Trust
Act.

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     Section 2.12. Execution of Documents. Unless otherwise determined in writing by the
Institutional Trustee, and except as otherwise required by the Statutory Trust Act, the
Institutional Trustee, or any one or more of the Administrators, as the case may be, is authorized
to execute on behalf of the Trust any documents that the Trustees or the Administrators, as the
case may be, have the power and authority to execute pursuant to Section 2.6.

     Section 2.13. Not Responsible for Recitals or Issuance of Securities. The recitals
contained in this Declaration and the Securities shall be taken as the statements of the Sponsor,
and the Trustees do not assume any responsibility for their correctness. The Trustees make no
representations as to the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this Declaration, the
Debentures or the Securities.

     Section 2.14. Duration of Trust. The Trust, unless earlier dissolved pursuant to the
provisions of Article VII hereof, shall be in existence for 35 years from the Closing Date.

     Section 2.15. Mergers.

     (a) The Trust may not consolidate, amalgamate, merge with or into, or be replaced by, or
convey, transfer or lease its properties and assets substantially as an entirety to any corporation
or other body, except as described in Section 2.15(b) and (c) and except in connection with the
liquidation of the Trust and the distribution of the Debentures to Holders of Securities pursuant
to Section 7.1(a)(iv) of the Declaration or Section 3 of Annex I.

     (b) The Trust may, with the consent of the Administrators and the Institutional Trustee, which
consent shall not be unreasonably withheld, and without the consent of the Holders of the Capital
Securities, consolidate, amalgamate, merge with or into, or be replaced by a trust organized as
such under the laws of any state; provided that:

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

     (A) expressly assumes all of the obligations of the Trust under the Securities;
or

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

     (ii) if the Trust is not the surviving entity, the Sponsor expressly appoints a trustee
of the Successor Entity that possesses substantially the same powers and duties as the
Institutional Trustee as the Holder of the Debentures;

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

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

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     (v) if the Trust is not the surviving entity, such Successor Entity has a purpose
substantially identical to that of the Trust;

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

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

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

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

     (vii) if the Trust is not the surviving entity, the Sponsor guarantees the obligations
of any Successor Entity under the Successor Securities at least to the extent provided by
the Guarantee;

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

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

     (c) Notwithstanding Section 2.15(b), the Trust shall not, except with the consent of Holders
of 100% in aggregate liquidation amount of the Securities, consolidate, amalgamate, merge with or
into, or be replaced by any other entity or permit any other entity to consolidate, amalgamate,
merge with or into, or replace it if such consolidation, amalgamation, merger or replacement would
cause the Trust or Successor Entity to be classified as other than a grantor trust for United
States federal income tax purposes.

ARTICLE III

SPONSOR

     Section 3.1. Sponsor’s Purchase of Common Securities. On the Closing Date, the
Sponsor will purchase all of the Common Securities issued by the Trust in an amount at least equal
to 3% of the capital of the Trust, at the same time as the Capital Securities are sold.

     Section 3.2. Responsibilities of the Sponsor. In connection with the issue and sale
of the Capital Securities, the Sponsor shall have the exclusive right and responsibility to engage
in, or direct the Administrators to engage in, the following activities:

     (a) to determine the States in which to take appropriate action to qualify or register for sale
all or part of the Capital Securities and to do any and all such acts, other than actions which
must be taken by the Trust, and advise the Trust of actions it must take, and prepare for execution
and filing any

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documents to be executed and filed by the Trust, as the Sponsor deems necessary or
advisable in order to comply with the applicable laws of any such States, to protect the limited
liability of the Holders of the Capital Securities or to enable the Trust to effect the purposes
for which it was created; and

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

     Section 3.3. Expenses. In connection with the offering, sale and issuance of the
Debentures to the Trust and in connection with the sale of the Securities by the Trust, the
Sponsor, in its capacity as Debenture Issuer, shall:

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

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

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

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

     Section 3.4. Right to Proceed. The Sponsor acknowledges the rights of Holders to
institute a Direct Action as set forth in Section 2.8(d) hereto.

ARTICLE IV

INSTITUTIONAL TRUSTEE AND ADMINISTRATORS

Section 4.1. Number of Trustees. The number of Trustees shall initially be two, and;

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

19

 

     (b) after the issuance of any Securities, the number of Trustees may be increased or decreased
by vote of the Holder of a Majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holder of the Common Securities; provided, however, that
there shall be a Delaware Trustee if required by Section 4.2; and there shall always be one Trustee
who shall be the Institutional Trustee, and such Trustee may also serve as Delaware Trustee if it
meets the applicable requirements, in which case Section 2.11 shall have no application to such
entity in its capacity as Institutional Trustee.

     Section 4.2. Delaware Trustee; Eligibility.

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

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

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

     (b) The initial Delaware Trustee shall be Wilmington Trust Company.

     Section 4.3. Institutional Trustee; Eligibility.

     (a) There shall at all times be one Trustee which shall:

     (i) not be an Affiliate of the Sponsor;

     (ii) not offer or provide credit or credit enhancement to the Trust; and

     (iii) be a banking corporation or trust company organized and doing business under the
laws of the United States of America or any state thereof or the District of Columbia,
authorized under such laws to exercise corporate trust powers, having a combined capital and
surplus of at least 50 million U.S. dollars ($50,000,000.00), and subject to supervision or
examination by Federal, state, or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority referred to above, then for the purposes of this
Section 4.3(a)(iii), the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of condition so
published.

     (b) If at any time the Institutional Trustee shall cease to be eligible to so act under
Section 4.3(a), the Institutional Trustee shall immediately resign in the manner and with the
effect set forth in Section 4.5.

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

     (d) The initial Institutional Trustee shall be Wilmington Trust Company.

     Section 4.4. Administrators. Each Administrator shall be a U.S. Person, 21 years of
age or older and authorized to bind the Sponsor. The initial Administrators shall be John B.
Stedman, Jr. and

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Jan H. Hollar. There shall at all times be at least one Administrator. Except
where a requirement for action by a specific number of Administrators is expressly set forth in
this Declaration and except with respect to any action the taking of which is the subject of a
meeting of the Administrators, any action required or permitted to be taken by the Administrators
may be taken by, and any power of the Administrators may be exercised by, or with the consent of,
any one such Administrator.

     Section 4.5. Appointment, Removal and Resignation of Trustees and Administrators.

     (a) No resignation or removal of any Trustee (the “Relevant Trustee”) and no
appointment of a successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the applicable requirements
of this Section 4.5.

     (b) Subject to Section 4.5(a), a Relevant Trustee may resign at any time by giving written
notice thereof to the Holders of the Securities and by appointing a successor Relevant Trustee.
Upon the resignation of the Institutional Trustee, the Institutional Trustee shall appoint a
successor by requesting from at least three Persons meeting the eligibility requirements their
expenses and charges to serve as the successor Institutional Trustee on a form provided by the
Administrators, and selecting the Person who
agrees to the lowest expense and charges (the “Successor Institutional Trustee”). If
the instrument of acceptance by the successor Relevant Trustee required by this Section 4.5 shall
not have been delivered to the Relevant Trustee within 60 days after the giving of such notice of
resignation or delivery of the instrument of removal, the Relevant Trustee may petition, at the
expense of the Trust, any federal, state or District of Columbia court of competent jurisdiction
for the appointment of a successor Relevant Trustee. Such court may thereupon, after prescribing
such notice, if any, as it may deem proper, appoint a Relevant Trustee. The Institutional Trustee
shall have no liability for the selection of such successor pursuant to this Section 4.5.

     (c) Unless an Event of Default shall have occurred and be continuing, any Trustee may be
removed at any time by an act of the Holders of a Majority in liquidation amount of the Common
Securities. If any Trustee shall be so removed, the Holders of the Common Securities, by act of
the Holders of a Majority in liquidation amount of the Common Securities delivered to the Relevant
Trustee, shall promptly appoint a successor Relevant Trustee, and such successor Trustee shall
comply with the applicable requirements of this Section 4.5. If an Event of Default shall have
occurred and be continuing, the Institutional Trustee or the Delaware Trustee, or both of them, may
be removed by the act of the Holders of a Majority in liquidation amount of the Capital Securities,
delivered to the Relevant Trustee (in its individual capacity and on behalf of the Trust). If any
Trustee shall be so removed, the Holders of Capital Securities, by act of the Holders of a Majority
in liquidation amount of the Capital Securities then outstanding delivered to the Relevant Trustee,
shall promptly appoint a successor Relevant Trustee or Trustees, and such successor Trustee shall
comply with the applicable requirements of this Section 4.5. If no successor Relevant Trustee
shall have been so appointed by the Holders of a Majority in liquidation amount of the Capital
Securities and accepted appointment in the manner required by this Section 4.5 within 30 days after
delivery of an instrument of removal, the Relevant Trustee or any Holder who has been a Holder of
the Securities for at least six months may, on behalf of himself and all others similarly situated,
petition any federal, state or District of Columbia court of competent jurisdiction for the
appointment of a successor Relevant Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a successor Relevant Trustee or Trustees.

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

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     (e) Notwithstanding the foregoing or any other provision of this Declaration, in the event a
Delaware Trustee who is a natural person dies or is adjudged by a court to have become incompetent
or incapacitated, the vacancy created by such death, incompetence or incapacity may be filled by
the Institutional Trustee following the procedures in this Section 4.5 (with the successor being a
Person who satisfies the eligibility requirement for a Delaware Trustee set forth in this
Declaration) (the “Successor Delaware Trustee”).

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

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

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

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

     Section 4.6. Vacancies Among Trustees. If a Trustee ceases to hold office for any
reason and the number of Trustees is not reduced pursuant to Section 4.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by the Trustees or, if there are more than two,
a majority of the Trustees, shall be conclusive evidence of the existence of such vacancy. The
vacancy shall be filled with a Trustee appointed in accordance with Section 4.5.

     Section 4.7. Effect of Vacancies. The death, resignation, retirement, removal,
bankruptcy, dissolution, liquidation, incompetence or incapacity to perform the duties of a Trustee
shall not operate to dissolve, terminate or annul the Trust or terminate this Declaration.
Whenever a vacancy in the number of Trustees shall occur, until such vacancy is filled by the
appointment of a Trustee in accordance with Section 4.5, the Institutional Trustee shall have all
the powers granted to the Trustees and shall discharge all the duties imposed upon the Trustees by
this Declaration.

     Section 4.8. Meetings of the Trustees and the Administrators. Meetings of the
Administrators shall be held from time to time upon the call of an Administrator. Regular meetings
of the Administrators may be held in person in the United States or by telephone, at a place (if
applicable) and time fixed by resolution of the Administrators. Notice of any in-person meetings
of the Trustees with the

22

 

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

     Section 4.9. Delegation of Power.

     (a) Any Administrator may, by power of attorney consistent with applicable law, delegate to
any other natural person over the age of 21 that is a U.S. Person his or her power for the purpose
of executing any documents contemplated in Section 2.6; and

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

     Section 4.10. Conversion, Consolidation or Succession to Business. Any Person into
which the Institutional Trustee or the Delaware Trustee may be merged or converted or with which it
may be consolidated, or any Person resulting from any merger, conversion or consolidation to which
the Institutional Trustee or the Delaware Trustee shall be a party, or any Person succeeding to all
or substantially all the corporate trust business of the Institutional Trustee or the Delaware
Trustee shall be the successor of the Institutional Trustee or the Delaware Trustee hereunder,
provided such Person shall be otherwise qualified and eligible under this Article and,
provided, further, that such Person shall file an amendment to the Certificate of
Trust with the Secretary of State of the State of Delaware as contemplated in Section 4.5(i).

ARTICLE V

DISTRIBUTIONS

     Section 5.1. Distributions. Holders shall receive Distributions in accordance with
the applicable terms of the relevant Holder’s Securities. Distributions shall be made on the
Capital Securities and the Common Securities in accordance with the preferences set forth in their
respective terms. If and to the extent that the Debenture
Issuer makes a payment of Interest or any principal on the Debentures held by the
Institutional Trustee, the Institutional Trustee shall and is directed, to the extent funds are
available for that purpose, to make a distribution (a “Distribution”) of such amounts to
Holders.

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ARTICLE VI

ISSUANCE OF SECURITIES

     Section 6.1. General Provisions Regarding Securities.

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

     (b) The Certificates shall be signed on behalf of the Trust by one or more Administrators.
Such signature shall be the facsimile or manual signature of any Administrator. In case any
Administrator of the Trust who shall have signed any of the Securities shall cease to be such
Administrator before the Certificates so signed shall be delivered by the Trust, such Certificates
nevertheless may be delivered as though the person who signed such Certificates had not ceased to
be such Administrator, and any Certificate may be signed on behalf of the Trust by such persons
who, at the actual date of execution of such Security, shall be an Administrator of the Trust,
although at the date of the execution and delivery of the Declaration any such person was not such
an Administrator. A Capital Security shall not be valid until authenticated by the facsimile or
manual signature of an Authorized Officer of the Institutional Trustee. Such signature shall be
conclusive evidence that the Capital Security has been authenticated under this Declaration. Upon
written order of the Trust signed by one Administrator, the Institutional Trustee shall
authenticate the Capital Securities for original issue. The Institutional Trustee may appoint an
authenticating agent that is a U.S. Person acceptable to the Trust to authenticate the Capital
Securities. A Common Security need not be so authenticated.

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

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

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

     Section 6.2. Paying Agent, Transfer Agent and Registrar. The Trust shall maintain in
Wilmington, Delaware, an office or agency where the Capital Securities may be presented for payment
(“Paying Agent”), and an office or agency where Securities may be presented for
registration of transfer or exchange (the “Transfer Agent”). The Trust shall keep or cause
to be kept at such office or agency a register for the purpose of registering Securities, transfers
and exchanges of Securities, such register to be held by a registrar (the “Registrar”).
The Administrators may appoint the Paying Agent, the Registrar and the Transfer Agent and may
appoint one or more additional Paying Agents or one or more co-Registrars, or one or more co
Transfer Agents in such other locations as it shall determine. The term “Paying Agent” includes
any additional paying agent, the term “Registrar” includes any additional registrar or co

24

 

Registrar and the term “Transfer Agent” includes any additional transfer agent. The Administrators may
change any Paying Agent, Transfer Agent or Registrar at any time without prior notice to any
Holder. The Administrators shall notify the Institutional Trustee of the name and address of any
Paying Agent, Transfer Agent and Registrar not a party to this Declaration. The Administrators
hereby initially appoint the Institutional Trustee to act as Paying Agent, Transfer Agent and
Registrar for the Capital Securities and the Common Securities. The Institutional Trustee or any
of its Affiliates in the United States may act as Paying Agent, Transfer Agent or Registrar.

     Section 6.3. Form and Dating. The Capital Securities and the Institutional Trustee’s
certificate of authentication thereon shall be substantially in the form of Exhibit A-1, and the
Common Securities shall be substantially in the form of Exhibit A-2, each of which is hereby
incorporated in and expressly made a part of this Declaration. Certificates may be typed, printed,
lithographed or engraved or may be produced in any other manner as is reasonably acceptable to the
Administrators, as conclusively evidenced by their execution thereof. The Securities may have
letters, numbers, notations or other marks of identification or designation and such legends or
endorsements required by law, stock exchange rule, agreements to which the Trust is subject if any,
or usage (provided that any such notation, legend or endorsement is in a form acceptable to the
Sponsor). The Trust at the direction of the Sponsor shall furnish any such legend not contained in
Exhibit A-1 to the Institutional Trustee in writing. Each Capital Security shall be dated on or
before the date of its authentication. The terms and provisions of the Securities set forth in
Annex I and the forms of Securities set forth in Exhibits A-1 and A-2 are part of the terms of this
Declaration and to the extent applicable, the Institutional Trustee, the Delaware Trustee, the
Administrators and the Sponsor, by their execution and delivery of this Declaration, expressly
agree to such terms and provisions and to be bound thereby. Capital Securities will be issued only
in blocks having a stated liquidation amount of not less than $100,000.00 and any multiple of
$1,000.00 in excess thereof.

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

     Section 6.4. Mutilated, Destroyed, Lost or Stolen Certificates.

     If:

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

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

then, in the absence of notice that such Certificate shall have been acquired by a protected
purchaser, an Administrator on behalf of the Trust shall execute (and in the case of a Capital
Security Certificate, the Institutional Trustee shall authenticate) and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
denomination. In connection with the issuance of any new Certificate under this Section 6.4, the
Registrar or the Administrators may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection therewith. Any duplicate Certificate
issued pursuant to this Section shall constitute conclusive evidence of an ownership interest in
the relevant Securities, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.

     Section 6.5. Temporary Securities. Until definitive Securities are ready for
delivery, the Administrators may prepare and, in the case of the Capital Securities, the
Institutional Trustee shall authenticate, temporary Securities. Temporary Securities shall be
substantially in the form of definitive

25

 

Securities but may have variations that the Administrators consider appropriate for
temporary Securities. Without unreasonable delay, the Administrators shall prepare and, in the
case of the Capital Securities, the Institutional Trustee shall authenticate, definitive Securities
in exchange for temporary Securities.

     Section 6.6. Cancellation.
The Administrators at any time may deliver Securities to the Registrar for cancellation. The
Registrar shall forward to the Institutional Trustee any Securities surrendered to it for
registration of transfer, redemption or payment. The Institutional Trustee shall promptly cancel
all Securities surrendered for registration of transfer, payment, replacement or cancellation and
shall dispose of such canceled Securities as the Administrators direct. The Administrators may not
issue new Securities to replace Securities that have been paid or that have been delivered to the
Institutional Trustee for cancellation.

     Section 6.7. Rights of Holders; Waivers of Past Defaults.

     (a)
The legal title to the Trust Property is vested exclusively in the Trust in accordance with
Section 2.5, and the Holders shall not have any right or title therein other than the undivided
beneficial interest in the assets of the Trust conferred by their Securities and they shall have no
right to call for any partition or division of property, profits or rights of the Trust except as
described below. The Securities shall be personal property giving only the rights specifically set
forth therein and in this Declaration. The Securities shall have no preemptive or similar rights.

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

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

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

     (A)
all overdue installments of interest on all of the Debentures,

     (B)
any accrued Additional Interest on all of the Debentures,

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

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

26

 

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

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

     Upon receipt by the Institutional Trustee of written notice declaring such an acceleration, or
rescission and annulment thereof, by Holders of any part of the Capital Securities, a record date
shall be established for determining Holders of outstanding Capital Securities entitled to join in
such notice, which record date shall be at the close of business on the day the Institutional
Trustee receives such notice. The Holders on such record date, or their duly designated proxies,
and only such Persons, shall be entitled to join in such notice, whether or not such Holders remain
Holders after such record date; provided, that unless such declaration of acceleration, or
rescission and annulment, as the case may be, shall have become effective by virtue of the
requisite percentage having joined in such notice prior to the day that is 90 days after such
record date, such notice of declaration of acceleration, or rescission and annulment, as the case
may be, shall automatically and without further action by any Holder be canceled and of no further
effect. Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from giving,
after expiration of such 90-day period, a new written notice of declaration of acceleration, or
rescission and annulment thereof, as the case may be, that is identical to a written notice that
has been canceled pursuant to the proviso to the preceding sentence, in which event a new record
date shall be established pursuant to the provisions of this Section 6.7.

     (c)
Except as otherwise provided in paragraphs (a) and (b) of this Section 6.7, the Holders of at
least a Majority in liquidation amount of the Capital Securities may, on behalf of the Holders of
all the Capital
Securities, waive any past default or Event of Default and its consequences. Upon such
waiver, any such default or Event of Default shall cease to exist, and any default or Event of
Default arising therefrom shall be deemed to have been cured, for every purpose of this
Declaration, but no such waiver shall extend to any subsequent or other default or Event of Default
or impair any right consequent thereon.

ARTICLE VII

DISSOLUTION AND TERMINATION OF TRUST

     Section 7.1. Dissolution and Termination of Trust.

     (a)
The Trust shall dissolve on the first to occur of:

     (i)
unless earlier dissolved, on December 15, 2041, the expiration of the term of the
Trust;

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

27

 

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

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

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

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

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

     (b)
As soon as is practicable after the occurrence of an event referred to in Section 7.1(a), and
after satisfaction of liabilities to creditors of the Trust as required by applicable law,
including of the Statutory Trust Act, and subject to the terms set forth in Annex I, the
Institutional Trustee shall terminate the Trust by filing a certificate of cancellation with the
Secretary of State of the State of Delaware.

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

ARTICLE VIII

TRANSFER OF INTERESTS

     Section 8.1. General.

     (a)
Subject to Section 8.1(c), where Capital Securities are presented to the Registrar or a
co-registrar with a request to register a transfer or to exchange them for an equal number of
Capital Securities represented by different certificates, the Registrar shall register the transfer
or make the exchange if its requirements for such transactions are met. To permit registrations of
transfer and exchanges, the Trust shall issue and the Institutional Trustee shall authenticate
Capital Securities at the Registrar’s request.

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

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

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including but not limited to the receipt of Distributions on such Capital
Securities, and such transferee shall be deemed to have no interest whatsoever in such Capital
Securities.

     (d)
The Registrar shall provide for the registration of Securities and of transfers of Securities,
which will be effected without charge but only upon payment (with such indemnity as the Registrar
may require) in respect of any tax or other governmental charges that may be imposed in relation to
it. Upon surrender for registration of transfer of any Securities, the Registrar shall cause one
or more new Securities of the same tenor to be issued in the name of the designated transferee or
transferees. Every Security surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form
satisfactory to the Registrar duly executed by the Holder or such Holder’s attorney duly
authorized in writing. Each Security surrendered for registration of transfer shall be canceled by
the Institutional Trustee pursuant to Section 6.6. A transferee of a Security shall be entitled to
the rights and subject to the obligations of a Holder hereunder upon the receipt by such transferee
of a Security. By acceptance of a Security, each transferee shall be deemed to have agreed to be
bound by this Declaration.

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

     Section 8.2. Transfer Procedures and Restrictions.

     (a)
The Capital Securities shall bear the Restricted Securities Legend, which shall not be removed
unless there is delivered to the Trust such satisfactory evidence, which may include an opinion of
counsel satisfactory to the Institutional Trustee, as may be reasonably required by the Trust, that
neither the legend nor the restrictions on transfer set forth therein are required to ensure that
transfers thereof comply with the provisions of the Securities Act. Upon provision of such
satisfactory evidence, the Institutional Trustee, at the written direction of the Trust, shall
authenticate and deliver Capital Securities that do not bear the legend.

     (b)
Except as permitted by Section 8.2(a), each Capital Security shall bear a legend (the
“Restricted Securities Legend”) in substantially the following form and a Capital Security
shall not be transferred except in compliance with such legend, unless otherwise determined by the
Sponsor, upon the advice of counsel expert in securities law, in accordance with applicable law:

     THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE
SECURITIES LAW. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY
BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE
HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY ONLY (A) TO THE
SPONSOR OR THE TRUST, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS

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OF RULE 144A SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT
TO RULE 144A IN ACCORDANCE WITH RULE 144A, (D) TO A NON-U.S. PERSON IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH
RULE 903 OR RULE 904 (AS APPLICABLE) OF REGULATION S UNDER THE SECURITIES ACT,
(E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (A)
OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS CAPITAL SECURITY FOR ITS
OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH,
ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE SPONSOR’S AND THE TRUST’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR
OTHER INFORMATION SATISFACTORY TO EACH OF THEM IN ACCORDANCE WITH THE DECLARATION OF
TRUST, A COPY OF WHICH MAY BE OBTAINED FROM THE SPONSOR OR THE TRUST. HEDGING
TRANSACTIONS INVOLVING THIS SECURITY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH
THE SECURITIES ACT.

     THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES, REPRESENTS
AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR
OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE “CODE”) (EACH A “PLAN”), OR AN ENTITY WHOSE UNDERLYING
ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY, AND
NO PERSON INVESTING “PLAN ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THE SECURITIES OR
ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR EXEMPTIVE
RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS
EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS
PURCHASE AND HOLDING OF THIS SECURITY IS NOT PROHIBITED BY SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER OR
HOLDER OF THE SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED
BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT
PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF
THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE
BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE
BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE WILL NOT RESULT
IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE
FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.

     THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING A
LIQUIDATION AMOUNT OF NOT LESS THAN

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$100,000.00 (100 SECURITIES) AND MULTIPLES OF
$1,000.00 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF SECURITIES IN A BLOCK
HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000.00 SHALL BE DEEMED TO BE VOID
AND OF NO LEGAL EFFECT WHATSOEVER.

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

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

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

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

     Section 8.3. Deemed Security Holders.
The Trust, the Administrators, the Trustees, the Paying Agent, the Transfer Agent or the
Registrar may treat the Person in whose name any Certificate shall be registered on the books and
records of the Trust as the sole holder of such Certificate and of the Securities represented by
such Certificate for purposes of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or interest in such
Certificate or in the Securities represented by such Certificate on the part of any Person, whether
or not the Trust, the Administrators, the Trustees, the Paying Agent, the Transfer Agent or the
Registrar shall have actual or other notice thereof.

ARTICLE IX

LIMITATION OF LIABILITY OF

HOLDERS OF SECURITIES, INSTITUTIONAL TRUSTEE OR OTHERS

     Section 9.1. Liability.

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

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

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

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

     (c)
Except to the extent provided in Section 9.1(b), and pursuant to the Statutory Trust Act, the
Holders of the Capital Securities shall be entitled to the same limitation of personal liability
extended

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to stockholders of private corporations for profit organized under the General Corporation
Law of the State of Delaware.

     Section 9.2. Exculpation.

     (a)
No Indemnified Person shall be liable, responsible or accountable in damages or otherwise to
the Trust or any Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith on behalf of the Trust and
in a manner such Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim incurred by reason of such Indemnified
Person’s negligence or willful misconduct with respect to such acts or omissions.

     (b)
An Indemnified Person shall be fully protected in relying in good faith upon the records of
the Trust and upon such information, opinions, reports or statements presented to the Trust by any
Person as to matters the Indemnified Person reasonably believes are within such other Person’s
professional or expert competence and, if selected by such Indemnified Person, has been selected by
such Indemnified Person with reasonable care by or on behalf of the Trust, including information,
opinions, reports or statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from which Distributions
to Holders of Securities might properly be paid.

     Section 9.3. Fiduciary Duty.

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

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

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

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

     Section 9.4. Indemnification.

     (a)
The Sponsor shall indemnify, to the full extent permitted by law, any Indemnified Person who
was or is a party or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an
action by or in the right of the Trust) arising out of or in connection with the acceptance or
administration of this Declaration by reason of the fact that he is or was an Indemnified Person
against expenses (including reasonable attorneys’ fees and expenses), judgments, fines and amounts
paid in settlement actually and

32

 

reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the Trust, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the Indemnified Person did not act in
good faith and in a manner which he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.

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

     (c)
To the extent that an Indemnified Person shall be successful on the merits or otherwise
(including dismissal of an action without prejudice or the settlement of an action without
admission of liability) in defense of any action, suit or proceeding referred to in paragraphs (a)
and (b) of this Section 9.4, or in
defense of any claim, issue or matter therein, he shall be indemnified, to the full extent
permitted by law, against expenses (including attorneys’ fees and expenses) actually and reasonably
incurred by him in connection therewith.

     (d)
Any indemnification of an Administrator under paragraphs (a) and (b) of this Section 9.4
(unless ordered by a court) shall be made by the Sponsor only as authorized in the specific case
upon a determination that indemnification of the Indemnified Person is proper in the circumstances
because he has met the applicable standard of conduct set forth in paragraphs (a) and (b). Such
determination shall be made (i) by the Administrators by a majority vote of a Quorum consisting of
such Administrators who were not parties to such action, suit or proceeding, (ii) if such a Quorum
is not obtainable, or, even if obtainable, if a Quorum of disinterested Administrators so directs,
by independent legal counsel in a written opinion, or (iii) by the Common Security Holder of the
Trust.

     (e)
To the fullest extent permitted by law, expenses (including reasonable attorneys’ fees and
expenses) incurred by an Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (a) and (b) of this Section 9.4
shall be paid by the Sponsor in advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such Indemnified Person to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by the Sponsor as
authorized in this Section 9.4. Notwithstanding the foregoing, no advance shall be made by the
Sponsor if a determination is reasonably and promptly made (i) by the Administrators by a majority
vote of a Quorum of disinterested Administrators, (ii) if such a Quorum is not obtainable, or, even
if obtainable, if a quorum of disinterested Administrators so directs, by independent legal counsel
in a written opinion or (iii) by the Common Security Holder of the Trust, that, based upon the
facts known to the Administrators, counsel or the Common Security Holder at the time such
determination is made, such Indemnified Person acted in bad faith or in a manner that such
Indemnified Person did not believe to be in the best interests of the Trust,

33

 

or, with respect to
any criminal proceeding, that such Indemnified Person believed or had reasonable cause to believe
his conduct was unlawful. In no event shall any advance be made in instances where the
Administrators, independent legal counsel or the Common Security Holder reasonably determine that
such Indemnified Person deliberately breached his duty to the Trust or its Common or Capital
Security Holders.

     (f)
The Trustees, at the sole cost and expense of the Sponsor, retain the right to representation
by counsel of their own choosing in any action, suit or any other proceeding for which they are
indemnified under paragraphs (a) and (b) of this Section 9.4, without affecting their right to
indemnification hereunder or waiving any rights afforded to it under this Declaration or applicable
law.

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

     (h)
The Sponsor or the Trust may purchase and maintain insurance on behalf of any Person who is or
was an Indemnified Person against any liability asserted against him and incurred by him in any
such capacity, or arising out of his status as such, whether or not the Sponsor would have the
power to indemnify him against such liability under the provisions of this Section 9.4.

     (i)
For purposes of this Section 9.4, references to “the Trust” shall include, in addition to the
resulting or surviving entity, any constituent entity (including any constituent of a constituent)
absorbed in a consolidation or merger, so that any Person who is or was a director, trustee,
officer or employee of such constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent of another entity, shall
stand in the same position under the provisions of this Section 9.4 with respect to the resulting
or surviving entity as he would have with respect to such constituent entity if its separate
existence had continued.

     (j)
The indemnification and advancement of expenses provided by, or granted pursuant to, this
Section 9.4 shall, unless otherwise provided when authorized or ratified, (i) continue as to a
Person who has ceased to be an Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a Person; and (ii) survive the termination or expiration of
this Declaration or the earlier removal or resignation of an Indemnified Person.

     Section 9.5. Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the Institutional Trustee may engage
in or possess an interest in other business ventures of any nature or description, independently or
with others, similar or dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such independent ventures
or the income or profits derived therefrom, and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or improper. None of any
Covered Person, the Sponsor, the Delaware Trustee or the Institutional Trustee shall be obligated
to present any particular investment or other opportunity to the Trust even if such opportunity is
of a character that, if presented to the Trust, could be taken by the Trust, and any Covered
Person, the Sponsor, the Delaware Trustee and the Institutional Trustee shall have the right to
take for its own account (individually or as a partner or fiduciary) or to recommend to others any
such particular investment or other opportunity. Any Covered Person, the Delaware Trustee and the
Institutional Trustee

34

 

may engage or be interested in any financial or other transaction with the
Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or act
on any committee or body of holders of, securities or other obligations of the Sponsor or its
Affiliates.

     Section 9.6. Compensation; Fee.
The Sponsor agrees:

     (a)
to pay to the Trustees from time to time such compensation for all services rendered by them
hereunder as the parties shall agree in writing 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

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

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

     The provisions of this Section 9.6 shall survive the dissolution of the Trust and the
termination of this Declaration and the removal or resignation of any Trustee.

     No Trustee may claim any lien or charge on any property of the Trust as a result of any amount
due pursuant to this Section 9.6.

ARTICLE X

ACCOUNTING

     Section 10.1. Fiscal Year.
The fiscal year (“Fiscal Year”) of the Trust shall be the calendar year, or such other
year as is required by the Code.

     Section 10.2. Certain Accounting Matters.

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

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

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

     Section 10.3. Banking.
The Trust shall maintain in the United States, as defined for purposes of Treasury Regulations
section 301.7701-7, one or more bank accounts in the name and for the sole benefit of the Trust;
provided, however, that all payments of funds in respect of the Debentures held by
the Institutional Trustee shall be made directly to the Property Account and no other funds of the
Trust shall be deposited in the Property Account. The sole signatories for such accounts
(including the Property Account) shall be designated by the Institutional Trustee.

     Section 10.4. Withholding.
The Institutional Trustee or any Paying Agent and the Administrators shall comply with all
withholding requirements under United States federal, state and local law. The Institutional
Trustee or any Paying Agent shall request, and each Holder shall provide to the Institutional
Trustee or any Paying Agent, such forms or certificates as are necessary to establish an exemption
from withholding with respect to the Holder, and any representations and forms as shall reasonably
be requested by the Institutional Trustee or any Paying Agent to assist it in determining the
extent of, and in fulfilling, its withholding obligations. The Administrators shall file required
forms with applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder to applicable
jurisdictions. To the extent that the Institutional Trustee or any Paying Agent is required to
withhold and pay over any amounts to any authority with respect to distributions or allocations to
any Holder, the amount withheld shall be deemed to be a Distribution in the amount of the
withholding to the Holder. In the event of any claimed overwithholding, Holders shall be limited
to an action against the applicable jurisdiction. If the amount required to be withheld was not
withheld from actual Distributions made, the Institutional Trustee or any Paying Agent may reduce
subsequent Distributions by the amount of such withholding.

ARTICLE XI

AMENDMENTS AND MEETINGS

     Section 11.1. Amendments.

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

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

     (i)
the Institutional Trustee shall have first received

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

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

     (ii)
the result of such amendment would not be to

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

     (B)
cause a Capital Treatment Event; or

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

     (c)
Except as provided in Section 11.1(d), (e) or (h), no amendment shall be made, and any such
purported amendment shall be void and ineffective, unless the Holders of a Majority in liquidation
amount of the Capital Securities shall have consented to such amendment.

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

     (e)
Sections 9.1(b) and 9.1(c) and this Section 11.1 shall not be amended without the consent of
all of the Holders of the Securities.

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

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

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

     (i)
cure any ambiguity;

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

     (iii)
add to the covenants, restrictions or obligations of the Sponsor; or

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

37

 

which amendment does not have a material adverse effect on the rights,
preferences or privileges of the Holders of Securities;

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

     Section 11.2. Meetings of the Holders of Securities; Action by Written Consent.

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

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

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

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

38

 

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

ARTICLE XII

REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND THE DELAWARE TRUSTEE

     Section 12.1. Representations and Warranties of Institutional Trustee. The initial
Institutional Trustee represents and warrants to the Trust and to the Sponsor at the date of this
Declaration, and each Successor Institutional Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Institutional Trustee’s acceptance of its appointment as
Institutional Trustee, that:

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

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

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

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

     Section 12.2. Representations of the Delaware Trustee. The Trustee that acts as
initial Delaware Trustee represents and warrants to the Trust and to the Sponsor at the date of
this Declaration, and each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee’s acceptance of its appointment as Delaware
Trustee that:

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

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

39

 

general principles of equity and the discretion of the
court (regardless of whether considered in a proceeding in equity or at law);

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

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

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

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

ARTICLE XIII

MISCELLANEOUS

     Section 13.1. Notices. All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall be delivered, telecopied (which
telecopy shall be followed by notice delivered or mailed by first class mail) or mailed by first
class mail, as follows:

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

TSB Statutory Trust I

c/o TSB Financial Corporation

1057 Providence Road

Charlotte, North Carolina 28207

Attention: Jan H. Hollar

Telecopy: 704-331-9695

     (b)

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

Wilmington Trust Company

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890-1600

Attention: Corporate Trust Administration

Telecopy: 302-636-4140

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

40

 

Wilmington Trust Company

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890-1600

Attention: Corporate Trust Administration

Telecopy: 302-636-4140

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

TSB Financial Corporation

1057 Providence Road

Charlotte, North Carolina 28207

Attention: Jan H. Hollar

Telecopy: 704-331-9695

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

     All such notices shall be deemed to have been given when received in person, telecopied with
receipt confirmed, or mailed by first class mail, postage prepaid except that if a notice or other
document is refused delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered on the date of such
refusal or inability to deliver.

     Section 13.2. Governing Law. This Declaration and the rights of the parties hereunder
shall be governed by and interpreted in accordance with the law of the State of Delaware and all
rights and remedies shall be governed by such laws without regard to the principles of conflict of
laws of the State of Delaware or any other jurisdiction that would call for the application of the
law of any jurisdiction other than the State of Delaware; provided, however, that
there shall not be applicable to the Trust, the Trustees or this Declaration any provision of the
laws (statutory or common) of the State of Delaware pertaining to trusts that relate to or
regulate, in a manner inconsistent with the terms hereof (a) the filing with any court or
governmental body or agency of trustee accounts or schedules of trustee fees and charges, (b)
affirmative requirements to post bonds for trustees, officers, agents or employees of a trust, (c)
the necessity for obtaining court or other governmental approval concerning the acquisition,
holding or disposition of real or personal property, (d) fees or other sums payable to trustees,
officers, agents or employees of a trust, (e) the allocation of receipts and expenditures to income
or principal, or (f) restrictions or limitations on the permissible nature, amount or concentration
of trust investments or requirements relating to the titling, storage or other manner of holding or
investing trust assets.

     Section 13.3. Intention of the Parties. It is the intention of the parties hereto
that the Trust be classified for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of the parties.

     Section 13.4. Headings. Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this Declaration or any
provision hereof.

     Section 13.5. Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or referred to, the successors
and assigns of such party shall be deemed to be included, and all covenants and agreements in this
Declaration by the Sponsor and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether or not so expressed.

41

 

     Section 13.6. Partial Enforceability. If any provision of this Declaration, or the
application of such provision to any Person or circumstance, shall be held invalid, the remainder
of this Declaration, or the application of such provision to persons or circumstances other than
those to which it is held invalid, shall not be affected thereby.

     Section 13.7. Counterparts. This Declaration may contain more than one counterpart of
the signature page and this Declaration may be executed by the affixing of the signature of each of
the Trustees and Administrators to any of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the same force and
effect as though all of the signers had signed a single signature page.

Signatures appear on the following page

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

	 	 	 	 	 
	 	WILMINGTON TRUST COMPANY,

as Delaware Trustee

 	 
	 	By:  	/s/
Christopher J. Monigle	 
	 	 	    Name:  	Christopher J. Monigle	 
	 	 	    Title:  	Vice President	 
	 
	 	WILMINGTON TRUST COMPANY,

as Institutional Trustee

 	 
	 	    By:  	/s/
Christopher J. Monigle	 
	 	 	    Name:  	Christopher J. Monigle	 
	 	 	    Title:  	Vice President	 
	 
	 	TSB FINANCIAL CORPORATION, as Sponsor

 	 
	 	By:  	/s/
Jan H. Hollar	 
	 	 	    Name:  	Jan H. Hollar	 
	 	 	    Title:  	CFO	 
	 
	 	ADMINISTRATORS OF TSB STATUTORY TRUST I

 	 
	 	By:  	/s/
Jan H. Hollar	 
	 	 	    Administrator 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	
/s/ John Stedman	 
	 	 	    Administrator 	 
	 	 	 	 

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ANNEX I

TERMS OF SECURITIES

          Pursuant to Section 6.1 of the Amended and Restated Declaration of Trust, dated as of December
14, 2006 (as amended from time to time, the “Declaration”), the designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Capital Securities and the Common
Securities are set out below (each capitalized term used but not defined herein has the meaning set
forth in the Declaration):

     1. Designation and Number.

          (a) 3,000 Floating Rate Capital Securities of TSB Statutory Trust I (the “Trust”), with an
aggregate stated liquidation amount with respect to the assets of the Trust of three million
dollars ($3,000,000.00) and a stated liquidation amount with respect to the assets of the Trust of
$1,000.00 per Capital Security, are hereby designated for the purposes of identification only as
the “Capital Securities”. The Capital Security Certificates evidencing the Capital
Securities shall be substantially in the form of Exhibit A-1 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary usage, custom or
practice.

          (b) 93 Floating Rate Common Securities of the Trust (the “Common Securities”) will be
evidenced by Common Security Certificates substantially in the form of Exhibit A-2 to the
Declaration, with such changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice.

     2. Distributions.

          (a) Distributions will be payable on each Security for the Distribution Period beginning on
(and including) the date of original issuance and ending on (but excluding) the Distribution
Payment Date in March 2007 at a rate per annum of 7.07% and shall bear interest for each successive
Distribution Period beginning on (and including) the Distribution Payment Date in March 2007, and
each succeeding Distribution Payment Date, and ending on (but excluding) the next succeeding
Distribution Payment Date at a rate per annum equal to the 3-Month LIBOR, determined as described
below, plus 1.72% (the “Coupon Rate”), applied to the stated liquidation amount thereof,
such rate being the rate of interest payable on the Debentures to be held by the Institutional
Trustee. Distributions in arrears will bear interest thereon compounded quarterly at the
applicable Distribution Rate (to the extent permitted by law). Distributions, as used herein,
include cash distributions and any such compounded distributions unless otherwise noted. A
Distribution is payable only to the extent that payments are made in respect of the Debentures held
by the Institutional Trustee and to the extent the Institutional Trustee has funds available
therefor. The amount of the Distribution payable for any Distribution Period will be calculated by
applying the Distribution Rate to the stated liquidation amount outstanding at the commencement of
the Distribution Period on the basis of the actual number of days in the Distribution Period
concerned divided by 360. All percentages resulting from any calculations on the Capital
Securities will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded upward (e.g., 9.876545% (or
        .09876545) being rounded to 9.87655% (or .0987655), and all dollar amounts used in or resulting
from such calculation will be rounded to the nearest cent (with one-half cent being rounded
upward)).

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

I-1 

 

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

I-2 

 

funds available for the payment of such distributions in the Property Account of the Trust.
The Trust’s funds available for Distribution to the Holders of the Securities will be limited to
payments received from the Debenture Issuer. The payment of Distributions out of moneys held by
the Trust is guaranteed by the Guarantor pursuant to the Guarantee.

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

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

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

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

     If a Liquidation of the Trust occurs as described in clause (i), (ii), (iii) or (v) in Section
7.1(a) of the Declaration, the Trust shall be liquidated by the Institutional Trustee as
expeditiously as it determines to be possible by distributing, after satisfaction of liabilities to
creditors of the Trust, to the Holders of the Securities, the Debentures on a Pro Rata basis to the
extent not satisfied by the Debenture Issuer, unless such distribution is determined by the
Institutional Trustee not to be practical, in which event such Holders will be entitled to receive
out of the assets of the Trust available for distribution to the Holders,

I-3 

 

after satisfaction of liabilities of creditors of the Trust to the extent not satisfied by the
Debenture Issuer, an amount equal to the Liquidation Distribution. An early Liquidation of the
Trust pursuant to clause (iv) of Section 7.1(a) of the Declaration shall occur if the Institutional
Trustee determines that such Liquidation is possible by distributing, after satisfaction of
liabilities to creditors of the Trust, to the Holders of the Securities on a Pro Rata basis, the
Debentures, and such distribution occurs.

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

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

     4. Redemption and Distribution.

          (a) The Debentures will mature on December 15, 2036. The Debentures may be redeemed by the
Debenture Issuer, in whole or in part, at any Distribution Payment Date on or after the
Distribution Payment Date in December 2011, at the Redemption Price. In addition, the Debentures
may be redeemed by the Debenture Issuer at the Special Redemption Price, in whole but not in part,
at any Distribution Payment Date, upon the occurrence and continuation of a Special Event within
120 days following the occurrence of such Special Event at the Special Redemption Price, upon not
less than 30 nor more than 60 days’ notice to holders of such Debentures so long as such Special
Event is continuing. In each case, the right of the Debenture Issuer to redeem the Debentures is
subject to the Debenture Issuer having received prior approval from the Federal Reserve (if the
Debenture Issuer is a bank holding company) or prior approval from the OTS (if the Debenture Issuer
is a savings and loan holding company), in each case if then required under applicable capital
guidelines or policies of the applicable federal agency.

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

     (1) the rate (expressed as a percentage per annum) for U.S. dollar deposits having a
three-month maturity that appears on Telerate Page 3750 as of 11:00 a.m. (London time) on
the related Determination Date (as defined below). “Telerate Page 3750” means the display
designated as “Page 3750” on the Moneyline Telerate Service or such other page as may
replace Page 3750 on that service or such other service or services as may be nominated by
the British Bankers’ Association as the information vendor for the purpose of displaying
London interbank offered rates for U.S. dollar deposits;

I-4 

 

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

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

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

     If the rate for U.S. dollar deposits having a three-month maturity that initially appears on
Telerate Page 3750 as of 11:00 a.m. (London time) on the related Determination Date is superseded
on the Telerate Page 3750 by a corrected rate by 12:00 noon (London time) on such Determination
Date, then the corrected rate as so substituted on the applicable page will be the applicable
3-Month LIBOR for such Determination Date.

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

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

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

I-5 

 

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

     “Maturity Date” means December 15, 2036.

     “Redemption Date” shall mean the date fixed for the redemption of Capital Securities,
which shall be any Distribution Payment Date on or after the Distribution Payment Date in December
2011.

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

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

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

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

	 	 	 	 	 
	Month in which Special	 	 
	Redemption Date Occurs	 	Special Redemption Price
	March 2007

	 	 	104.625	%
	June 2007

	 	 	104.300	%
	September 2007

	 	 	104.000	%
	December 2007

	 	 	103.650	%
	March 2008

	 	 	103.350	%
	June 2008

	 	 	103.000	%
	September 2008

	 	 	102.700	%
	December 2008

	 	 	102.350	%
	March 2009

	 	 	102.050	%
	June 2009

	 	 	101.700	%
	September 2009

	 	 	101.400	%
	December 2009

	 	 	101.050	%

I-6 

 

	 	 	 	 	 
	Month in which Special	 	 
	Redemption Date Occurs	 	Special Redemption Price
	March 2010

	 	 	100.750	%
	June 2010

	 	 	100.450	%
	September 2010

	 	 	100.200	%
	December 2010 and thereafter

	 	 	100.000	%

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

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

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

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

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

I-7 

 

     (e) Redemption or Distribution Procedures.

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

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

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

          (iv) Subject to the foregoing and applicable law (including, without limitation, United
States federal securities laws), and provided that the acquiror is not the Holder of the
Common Securities or the obligor under the Indenture, the Sponsor or any of its

I-8 

 

          subsidiaries
may at any time and from time to time purchase outstanding Capital Securities by tender, in
the open market or by private agreement.

     5. Voting Rights — Capital Securities.

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

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

     In the event the consent of the Institutional Trustee, as the holder of the Debentures, is
required under the Indenture with respect to any amendment, modification or termination of the
Indenture, the Institutional Trustee shall request the direction of the Holders of the Securities
with respect to such

I-9 

 

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

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

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

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

     6. Voting Rights — Common Securities.

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

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

          (c) Subject to Section 6.7 of the Declaration and only after each Event of Default (if any)
with respect to the Capital Securities has been cured, waived, or otherwise eliminated and subject
to the requirements of the second to last sentence of this paragraph, the Holders of a Majority in
liquidation amount of the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the Institutional
Trustee, or exercising any trust or power conferred upon the Institutional Trustee under the
Declaration, including (i) directing the time, method, place of conducting any proceeding for any
remedy available to the Debenture Trustee, or exercising any trust or power conferred on the
Debenture Trustee with respect to the Debentures, (ii) waiving any past default and its
consequences that is waivable under the Indenture, or (iii) exercising

I-10 

 

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

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

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

     7. Amendments to Declaration and Indenture.

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

          (b) In the event the consent of the Institutional Trustee as the holder of the Debentures is
required under the Indenture with respect to any amendment, modification or termination of the
Indenture or the Debentures, the Institutional Trustee shall request the written direction of the
Holders of the Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification, or termination as directed by a Majority in
liquidation amount of the

I-11 

 

Securities voting together as a single class; provided,
however, that where a consent under the Indenture would require a Super Majority, the
Institutional Trustee may only give such consent at the direction of
the Holders of at least the proportion in liquidation amount of the Securities which the
relevant Super Majority represents of the aggregate principal amount of the Debentures outstanding.

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

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

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

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

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

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

I-12 

 

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

I-13 

 

EXHIBIT A-1

FORM OF CAPITAL SECURITY CERTIFICATE

[FORM OF FACE OF SECURITY]

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

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

A-1-1

 

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

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

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

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

     Certificate Number P-1           3,000 Capital Securities

     [CUSIP NO. [___] **To be inserted at the request of the Holder]

December 14, 2006

Certificate Evidencing Floating Rate Capital Securities

of

TSB Statutory Trust I

(liquidation amount $1,000.00 per Capital Security)

     TSB Statutory Trust I, a statutory trust created under the laws of the State of Delaware (the
“Trust”), hereby certifies that Hare & Co. (the “Holder”), as the nominee of The Bank of New York,
indenture trustee under the Indenture dated as of December 14, 2006 among Preferred Term Securities
XXIV, Ltd., Preferred Term Securities XXIV, Inc. and The Bank of New York, is the registered owner
of capital securities of the Trust representing undivided beneficial interests in the assets of the
Trust, (liquidation amount $1,000.00 per capital security) (the “Capital Securities”). Subject to
the Declaration (as defined below), the Capital Securities are transferable on the books and
records of the Trust in person or by a duly authorized attorney, upon surrender of this Certificate
duly endorsed and in proper form for transfer. The Capital Securities represented hereby are
issued pursuant to, and the designation, rights, privileges, restrictions, preferences and other
terms and provisions of the Capital Securities shall in all respects be subject to, the provisions
of the Amended and Restated Declaration of Trust of the Trust dated as of December 14, 2006, among
John B. Stedman, Jr. and Jan H. Hollar, as Administrators, Wilmington Trust Company, as Delaware
Trustee, Wilmington Trust Company, as Institutional Trustee, TSB Financial Corporation, as Sponsor,
and the holders from time to time of undivided beneficial interests in the assets of the Trust,
including the designation of the terms of the Capital Securities as set forth in Annex I to such
amended and restated declaration as the same may be amended from time to time (the “Declaration”).
Capitalized terms used herein but not defined shall have the meaning given them in the Declaration.
The Holder is entitled to the benefits of the Guarantee to the extent provided therein. The Sponsor
will provide a copy of the Declaration, the Guarantee, and the

A-1-2

 

Indenture to the Holder without charge upon written request to the Sponsor at its principal
place of business.

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

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

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

Signatures appear on following page

A-1-3

 

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

	 	 	 	 	 	 	 
	 	 	TSB STATUTORY TRUST I	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:

Title: Administrator	 	 

CERTIFICATE OF AUTHENTICATION

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

	 	 	 	 	 	 	 
	 	 	WILMINGTON TRUST COMPANY,

as the Institutional Trustee	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Authorized Officer	 	 

A-1-4

 

[FORM OF REVERSE OF CAPITAL SECURITY]

     Distributions payable on each Capital Security will be payable at an annual rate equal to
7.07% beginning on (and including) the date of original issuance and ending on (but excluding) the
Distribution Payment Date in March 2007 and at an annual rate for each successive period beginning
on (and including) the Distribution Payment Date in March 2007, and each succeeding Distribution
Payment Date, and ending on (but excluding) the next succeeding Distribution Payment Date (each a
“Distribution Period”), equal to 3-Month LIBOR, determined as described below, plus 1.72% (the
“Coupon Rate”), applied to the stated liquidation amount of $1,000.00 per Capital Security, such
rate being the rate of interest payable on the Debentures to be held by the Institutional Trustee.
Distributions in arrears will bear interest thereon compounded quarterly at the Distribution Rate
(to the extent permitted by applicable law). The term “Distributions” as used herein includes cash
distributions and any such compounded distributions unless otherwise noted. A Distribution is
payable only to the extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds available therefor. As
used herein, “Determination Date” means the date that is two London Banking Days (i.e., a business
day in which dealings in deposits in U.S. dollars are transacted in the London interbank market)
preceding the commencement of the relevant Distribution Period. The amount of the Distribution
payable for any Distribution Period will be calculated by applying the Distribution Rate to the
stated liquidation amount outstanding at the commencement of the Distribution Period on the basis
of the actual number of days in the Distribution Period concerned divided by 360.

     “3-Month LIBOR” as used herein, means the London interbank offered interest rate for
three-month U.S. dollar deposits determined by the Debenture Trustee in the following order of
priority: (i) the rate (expressed as a percentage per annum) for U.S. dollar deposits having a
three-month maturity that appears on Telerate Page 3750 as of 11:00 a.m. (London time) on the
related Determination Date (“Telerate Page 3750” means the display designated as “Page 3750” on the
Moneyline Telerate Service or such other page as may replace Page 3750 on that service or such
other service or services as may be nominated by the British Bankers’ Association as the
information vendor for the purpose of displaying London interbank offered rates for U.S. dollar
deposits); (ii) if such rate cannot be identified on the related Determination Date, the Debenture
Trustee will request the principal London offices of four leading banks in the London interbank
market to provide such banks’ offered quotations (expressed as percentages per annum) to prime
banks in the London interbank market for U.S. dollar deposits having a three-month maturity as of
11:00 a.m. (London time) on such Determination Date. If at least two quotations are provided,
3-Month LIBOR will be the arithmetic mean of such quotations; (iii) if fewer than two such
quotations are provided as requested in clause (ii) above, the Debenture Trustee will request four
major New York City banks to provide such banks’ offered quotations (expressed as percentages per
annum) to leading European banks for loans in U.S. dollars as of 11:00 a.m. (London time) on such
Determination Date. If at least two such quotations are provided, 3-Month LIBOR will be the
arithmetic mean of such quotations; and (iv) if fewer than two such quotations are provided as
requested in clause (iii) above, 3-Month LIBOR will be a 3-Month LIBOR determined with respect to
the Distribution Period immediately preceding such current Distribution Period. If the rate for
U.S. dollar deposits having a three-month maturity that initially appears on Telerate Page 3750 as
of 11:00 a.m. (London time) on the related Determination Date is superseded on the Telerate Page
3750 by a corrected rate by 12:00 noon (London time) on such Determination Date, then the corrected
rate as so substituted on the applicable page will be the applicable 3-Month LIBOR for such
Determination Date.

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

     All percentages resulting from any calculations on the Capital Securities will be rounded, if
necessary, to the nearest one hundred-thousandth of a percentage point, with five one-millionths of
a percentage point rounded upward (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or

A-1-5

 

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

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

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

A-1-6

 

ASSIGNMENT

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

      

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

      

      

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

      

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

     Date:
                                        

     Signature:
                                        

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

     Signature Guarantee:1

 

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

A-1-7

 

EXHIBIT A-2

FORM OF COMMON SECURITY CERTIFICATE

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

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

	 	 	 
	Certificate Number C-1
	 	93 Common Securities

December 14, 2006

Certificate Evidencing Floating Rate Common Securities

of

TSB Statutory Trust I

     TSB Statutory Trust I, a statutory trust created under the laws of the State of Delaware (the
“Trust”), hereby certifies that TSB Financial Corporation (the “Holder”) is the registered owner of
common securities of the Trust representing undivided beneficial interests in the assets of the
Trust (the “Common Securities”). The Common Securities represented hereby are issued pursuant to,
and the designation, rights, privileges, restrictions, preferences and other terms and provisions
of the Common Securities shall in all respects be subject to, the provisions of the Amended and
Restated Declaration of Trust of the Trust dated as of December 14, 2006, among John B. Stedman,
Jr. and Jan H. Hollar, as Administrators, Wilmington Trust Company, as Delaware Trustee, Wilmington
Trust Company, as Institutional Trustee, TSB Financial Corporation, as Sponsor, and the holders
from time to time of undivided beneficial interest in the assets of the Trust including the
designation of the terms of the Common Securities as set forth in Annex I to such amended and
restated declaration, as the same may be amended from time to time (the “Declaration”).
Capitalized terms used herein but not defined shall have the meaning given them in the Declaration.
The Holder is entitled to the benefits of the Guarantee to the extent provided therein. The
Sponsor will provide a copy of the Declaration, the Guarantee and the Indenture to the Holder
without charge upon written request to the Sponsor at its principal place of business.

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

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

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

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

A-2-1

 

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

	 	 	 	 	 	 	 
	 	 	TSB STATUTORY TRUST I	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:

Title: Administrator	 	 

A-2-2

 

[FORM OF REVERSE OF COMMON SECURITY]

     Distributions payable on each Common Security will be payable at an annual rate equal to 7.07%
beginning on (and including) the date of original issuance and ending on (but excluding) the
Distribution Payment Date in March 2007 and at an annual rate for each successive period beginning
on (and including) the Distribution Payment Date in March 2007, and each succeeding Distribution
Payment Date, and ending on (but excluding) the next succeeding Distribution Payment Date (each a
“Distribution Period”), equal to 3-Month LIBOR, determined as described below, plus 1.72% (the
“Coupon Rate”), applied to the stated liquidation amount of $1,000.00 per Common Security, such
rate being the rate of interest payable on the Debentures to be held by the Institutional Trustee.
Distributions in arrears will bear interest thereon compounded quarterly at the Distribution Rate
(to the extent permitted by applicable law). The term “Distributions” as used herein includes cash
distributions and any such compounded distributions unless otherwise noted. A Distribution is
payable only to the extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds available therefor. As
used herein, “Determination Date” means the date that is two London Banking Days (i.e., a business
day in which dealings in deposits in U.S. dollars are transacted in the London interbank market)
preceding the commencement of the relevant Distribution Period. The amount of the Distribution
payable for any Distribution Period will be calculated by applying the Distribution Rate to the
stated liquidation amount outstanding at the commencement of the Distribution Period on the basis
of the actual number of days in the Distribution Period concerned divided by 360.

     “3-Month LIBOR” as used herein, means the London interbank offered interest rate for
three-month U.S. dollar deposits determined by the Debenture Trustee in the following order of
priority: (i) the rate (expressed as a percentage per annum) for U.S. dollar deposits having a
three-month maturity that appears on Telerate Page 3750 as of 11:00 a.m. (London time) on the
related Determination Date (“Telerate Page 3750” means the display designated as “Page 3750” on the
Moneyline Telerate Service or such other page as may replace Page 3750 on that service or such
other service or services as may be nominated by the British Bankers’ Association as the
information vendor for the purpose of displaying London interbank offered rates for U.S. dollar
deposits); (ii) if such rate cannot be identified on the related Determination Date, the Debenture
Trustee will request the principal London offices of four leading banks in the London interbank
market to provide such banks’ offered quotations (expressed as percentages per annum) to prime
banks in the London interbank market for U.S. dollar deposits having a three-month maturity as of
11:00 a.m. (London time) on such Determination Date. If at least two quotations are provided,
3-Month LIBOR will be the arithmetic mean of such quotations; (iii) if fewer than two such
quotations are provided as requested in clause (ii) above, the Debenture Trustee will request four
major New York City banks to provide such banks’ offered quotations (expressed as percentages per
annum) to leading European banks for loans in U.S. dollars as of 11:00 a.m. (London time) on such
Determination Date. If at least two such quotations are provided, 3-Month LIBOR will be the
arithmetic mean of such quotations; and (iv) if fewer than two such quotations are provided as
requested in clause (iii) above, 3-Month LIBOR will be a 3-Month LIBOR determined with respect to
the Distribution Period immediately preceding such current Distribution Period. If the rate for
U.S. dollar deposits having a three-month maturity that initially appears on Telerate Page 3750 as
of 11:00 a.m. (London time) on the related Determination Date is superseded on the Telerate Page
3750 by a corrected rate by 12:00 noon (London time) on such Determination Date, then the corrected
rate as so substituted on the applicable page will be the applicable 3-Month LIBOR for such
Determination Date.

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

     All percentages resulting from any calculations on the Common Securities will be rounded, if
necessary, to the nearest one hundred-thousandth of a percentage point, with five one-millionths of
a percentage point rounded upward (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or

A-2-3

 

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

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

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

A-2-4

 

ASSIGNMENT

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

      

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

      

      

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

      

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

Date:
                                        

Signature:
                                                            

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

Signature:
                                        

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

     Signature Guarantee2

 

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

A-2-5

 

EXHIBIT B

SPECIMEN OF INITIAL DEBENTURE

(See Document No. 16)

 

 

EXHIBIT C

PLACEMENT AGREEMENT

(See Document No. 1)

C-1Exhibit 10.2

 

Exhibit
10.2

 

GUARANTEE AGREEMENT

by and between

TSB FINANCIAL CORPORATION

and

WILMINGTON TRUST COMPANY

Dated as of December 14, 2006

      

 

 

GUARANTEE AGREEMENT

     This GUARANTEE AGREEMENT (this “Guarantee”), dated as of December 14, 2006, is executed and
delivered by TSB Financial Corporation, a North Carolina corporation (the “Guarantor”), and
Wilmington Trust Company, a Delaware banking corporation, as trustee (the “Guarantee Trustee”), for
the benefit of the Holders (as defined herein) from time to time of the Capital Securities (as
defined herein) of TSB Statutory Trust I, a Delaware statutory trust (the “Issuer”).

     WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the “Declaration”), dated
as of the date hereof among Wilmington Trust Company, not in its individual capacity but solely as
institutional trustee and Delaware trustee, the administrators of the Issuer named therein, the
Guarantor, 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 those undivided beneficial
interests, having an aggregate liquidation amount of $3,000,000.00 (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” or “Sections” are to Articles or Sections
of this Guarantee, unless otherwise specified;

     (e) terms defined in the Declaration as at 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.

     “Affiliate” has the same meaning as given to that term in Rule 405 of the Securities
Act of 1933, as amended, or any successor rule thereunder.

     “Beneficiaries” means any Person to whom the Issuer is or hereafter becomes indebted
or liable.

 

 

     “Capital Securities” has the meaning set forth in the recitals to this Guarantee.

     “Common Securities” means the common securities issued by the Issuer to the Guarantor
pursuant to the Declaration.

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

     “Covered Person” means any Holder of Capital Securities.

     “Debentures” means the debt securities of the Guarantor designated the Floating Rate
Junior Subordinated Deferrable Interest Debentures due 2036 held by the Institutional Trustee (as
defined in the Declaration) of the Issuer.

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

     “Event of Default” has the meaning set forth in Section 2.4(a).

     “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 shall have funds available therefor, (ii)
the Redemption Price to the extent the Issuer has funds available therefor, with respect to any
Capital Securities called for redemption by the Issuer, (iii) the Special Redemption Price to the
extent the Issuer has funds available therefor, with respect to Capital Securities redeemed upon
the occurrence of a Special Event, 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 shall have funds available therefor, and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the Issuer (in either case, the
“Liquidation Distribution”).

     “Guarantee Trustee” means Wilmington Trust Company, until a Successor Guarantee
Trustee has been appointed and has accepted such appointment pursuant to the terms of this
Guarantee and thereafter means each such Successor Guarantee Trustee.

     “Guarantor” means TSB Financial Corporation and each of its successors and assigns.

     “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, any Affiliate of the Guarantee
Trustee, or any officers, directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Guarantee Trustee.

     “Indenture” means the Indenture dated as of the date hereof between the Guarantor and
Wilmington Trust Company, not in its individual capacity but solely as trustee, and any indenture

2

 

supplemental thereto pursuant to which the Debentures are to be issued to the institutional
trustee of the Issuer.

     “Issuer” has the meaning set forth in the opening paragraph to this Guarantee.

     “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 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 the Person 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 the Person in rendering the Officer’s Certificate;

     (c) a statement that the Person has made such examination or investigation as, in such
Person’s opinion, is necessary to enable such Person 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 the Person, 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.

     “Redemption Price” has the meaning set forth in the Indenture.

     “Responsible Officer” means, with respect to the Guarantee Trustee, any officer within
the Corporate Trust Office of the Guarantee Trustee including any Vice President, Assistant Vice
President, Secretary, Assistant Secretary or any other officer of the Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated officers and also,
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.

     “Special Event” has the meaning set forth in the Indenture.

     “Special Redemption Price” has the meaning set forth in the Indenture.

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     “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

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 curing 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 waived pursuant to Section 2.4) 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 such 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

     (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

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case of any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine whether or not 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 relating to the exercise of 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 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.

     (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 any re-recording, refiling or re-registration 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

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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
relieve the Guarantee Trustee, upon the occurrence of an Event of Default, of its obligation
to exercise the rights and powers vested in it by this Guarantee.

     (vii) The Guarantee Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may see fit.

     (viii) The Guarantee Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents, nominees, custodians
or attorneys, and the Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it hereunder.

     (ix) Any action taken by the Guarantee Trustee or its agents hereunder shall bind the
Holders of the Capital Securities, and the signature of the Guarantee Trustee or its agents
alone shall be sufficient and effective to perform any such action. No third party shall be
required to inquire as to the authority of the Guarantee Trustee to so act or as to its
compliance with any of the terms and provisions of this Guarantee, both of which shall be
conclusively evidenced by the Guarantee Trustee’s or its agent’s taking such action.

     (x) Whenever in the administration of this Guarantee the Guarantee Trustee shall deem
it desirable to receive instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Guarantee Trustee (i) may request instructions from the
Holders of a Majority in liquidation amount of the Capital Securities, (ii) may refrain from
enforcing such remedy or right or taking such other action until such instructions are
received, and (iii) 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, without negligence, 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.

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     Section 2.3. Not Responsible for Recitals or Issuance of Guarantee. The recitals
contained in this Guarantee shall be taken as the statements of the Guarantor, and the Guarantee
Trustee does not assume any responsibility for their correctness. The Guarantee Trustee makes no
representation as to the validity or sufficiency of this Guarantee.

     Section 2.4. Events of Default; Waiver.

     (a) An Event of Default under this Guarantee will occur upon the failure of the Guarantor to
perform any of its payment or other obligations hereunder.

     (b) The Holders of a Majority in liquidation amount of the Capital Securities may, voting or
consenting as a class, on behalf of the Holders of all of the Capital Securities, waive any past
Event of Default and its consequences. Upon such waiver, any such Event of Default shall cease to
exist, and shall be deemed to have been cured, for every purpose of this Guarantee, but no such
waiver shall extend to any subsequent or other default or Event of Default or impair any right
consequent thereon.

     Section 2.5. Events of Default; Notice.

     (a) The Guarantee Trustee shall, within 90 days after the occurrence of an Event of Default,
transmit by mail, first class postage prepaid, to the Holders of the Capital Securities and the
Guarantor, 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 deemed to have knowledge of any Event of Default unless
the Guarantee Trustee shall have received written notice from the Guarantor or a Holder of the
Capital Securities (except in the case of a payment default), or a Responsible Officer of the
Guarantee Trustee charged with the administration of this Guarantee shall have obtained actual
knowledge thereof.

ARTICLE III

GUARANTEE TRUSTEE

     Section 3.1. 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 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 50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia authority. If such
corporation 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
shall be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published.

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     (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 out in
Section 3.2(c).

     (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 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 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.

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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 the 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 benefit of, and to be enforceable by, all such Beneficiaries, whether or not such
Beneficiaries 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 payment of Distributions, Redemption Price, Special Redemption Price,
Liquidation Distribution or other sum payable that results from the extension of any interest
payment period on the Debentures or any extension of the maturity date of the Debentures permitted
by the Indenture);

     (c) any failure, omission, delay or lack of diligence on the part of the Holders to enforce,
assert or exercise any right, privilege, power or remedy conferred on the Holders pursuant to the
terms of the Capital Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;

     (d) the voluntary or involuntary liquidation, dissolution, sale of any collateral,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the
Issuer or any of the assets of the Issuer;

9

 

     (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 Section 2.1) the Guarantee Trustee shall have the right to decline to follow any such
direction if the Guarantee Trustee being advised by counsel determines that the action or
proceeding so directed may not lawfully be taken or if the Guarantee Trustee in good faith by its
board of directors or trustees, executive committees or a trust committee of directors or trustees
and/or Responsible Officers shall determine that the action or proceedings 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.

     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 mandatory 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 by a Beneficiary. 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

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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 mandatory 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 at the time of any such payment, and 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 a
Declaration 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 shall not and shall not permit any Affiliate to (x) declare or pay
any dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment with
respect to, any of the Guarantor’s or such Affiliate’s capital stock (other than payments of
dividends or distributions to the Guarantor) or make any guarantee payments with respect to the
foregoing 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 or any Affiliate that rank pari passu in
all respects with or junior in interest to the Debentures (other than, with respect to clauses (x)
and (y) above, (i) repurchases, redemptions or other acquisitions of shares of capital stock of the
Guarantor in connection with any employment contract, benefit plan or other similar arrangement
with or for the benefit of one or more employees, officers, directors or consultants, in connection
with a dividend reinvestment or stockholder stock purchase plan or in connection with the issuance
of capital stock of the 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, Declaration Event of Default or Extension Period, as applicable, (ii) as a result
of any exchange or conversion of any class or series of the Guarantor’s capital stock (or any
capital stock of a subsidiary of the Guarantor) for any class or series of the Guarantor’s capital
stock or of any class or series of the Guarantor’s indebtedness for any class or series of the
Guarantor’s capital stock, (iii) 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, (iv) any declaration of a dividend in connection with any
stockholders’ rights plan, or the issuance of rights, stock or other property under any
stockholders’ rights plan, or the redemption or repurchase of rights pursuant thereto, (v) any
dividend in the form of stock, warrants, options or other rights where the dividend stock or the
stock issuable upon exercise of such warrants, options or other rights is the same stock as that on
which the dividend is being paid or ranks pari passu with or junior to such stock and any cash
payments in lieu of fractional shares issued in connection therewith, or (vi) payments under this
Guarantee).

     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

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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 hereunder. 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 that the Guarantor may enter
into in the future or otherwise.

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 Special Redemption Price 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 performed or omitted by 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 reasonably
satisfactory to the Indemnified Person. Notwithstanding the Guarantor’s election to appoint
counsel to represent the Guarantor in an action, the Indemnified Person shall have the right to
employ separate counsel (including local counsel), and the Guarantor shall bear the reasonable
fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the Guarantor
to represent the Indemnified Person would present such counsel with a conflict of interest, (ii)
the actual or potential defendants in, or targets of, any such action include both the Indemnified
Person and the Guarantor and the Indemnified Person shall have reasonably concluded that there may
be legal defenses available to it and/or other Indemnified Person(s) which are different from or
additional to those available to the Guarantor, (iii) the Guarantor shall not have employed counsel
satisfactory to the Indemnified Person to represent the Indemnified Person within a reasonable time
after notice of the institution of such action or (iv) the Guarantor shall authorize the
Indemnified Person to employ separate counsel at the expense of the Guarantor. The Guarantor will
not, without the prior written consent of the Indemnified Persons, settle or compromise or consent
to the entry of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought hereunder (whether or
not the Indemnified Persons are actual or potential parties to such claim or action) unless such
settlement, compromise or consent includes an unconditional release of each Indemnified Person from
all liability arising out of such claim, action, suit or proceeding.

     Section 7.3. Compensation; Reimbursement of Expenses. The Guarantor agrees:

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

     (b) except as otherwise expressly provided herein, to reimburse the Guarantee Trustee upon
request for all reasonable documented 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.

     For purposes of clarification, this Section 7.3 does not contemplate the payment by the
Guarantor of acceptance or annual administration fees owing to the Guarantee Trustee for services
to be provided by the Guarantee Trustee under this Guarantee or the fees and expenses of the
Guarantee Trustee’s counsel in connection with the closing of the transactions contemplated by this
Guarantee. The provisions of this Section 7.3 shall survive the resignation or removal of the
Guarantee Trustee and the termination of this Guarantee.

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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 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 at least 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 apply to the giving of such
approval.

     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 and the Guarantor):

Wilmington Trust Company

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890-1600

Attention: Corporate Trust Administration

Telecopy: 302-636-4140

     (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):

TSB Financial Corporation

1057 Providence Road

Charlotte, North Carolina 28207

Attention: Jan H. Hollar

Telecopy: 704-331-9695

     (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.

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     Section 8.4. Benefit. This Guarantee is solely for the benefit of the Beneficiaries
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 AND
INTERPRETED 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 NEW YORK GENERAL OBLIGATIONS LAW).

     Section 8.6. Counterparts. This Guarantee may be executed in one or more
counterparts, each of which shall be an original, but all of which taken together shall constitute
one and the same instrument.

     Section 8.7 Separability. In case one or more of the provisions contained in this
Guarantee 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 Guarantee,
but this Guarantee shall be construed as if such invalid or illegal or unenforceable provision had
never been contained herein.

Signatures appear on the following page

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

	 	 	 	 	 
	 	 	TSB FINANCIAL CORPORATION, as Guarantor
	 
	 	 	 	 
	 

	 	By:	 	/s/ Jan H. Hollar
	 

	 	 	 	 
	 

	 	 	 	     Name:
Jan H. Hollar

     Title: CFO
	 
	 	 	 	 
	 	 	WILMINGTON TRUST COMPANY, as Guarantee Trustee
	 
	 	 	 	 
	 

	 	By:	 	/s/ Christopher J. Monigle
	 

	 	 	 	 
	 

	 	 	 	     Name: Christopher J. Monigle

     Title: Vice President

16

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