Document:

Exhibit 4.2

 

 

 

GUARANTEE AGREEMENT

 

by and between

 

NSB HOLDINGS, INC.

 

and

 

WILMINGTON TRUST COMPANY

 

Dated as of March 30, 2005

 

 

 

 

GUARANTEE AGREEMENT

 

This GUARANTEE AGREEMENT
(this “Guarantee”), dated as of March 30, 2005, is executed and delivered
by NSB Holdings, Inc., a Georgia 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 New Southern 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, 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 $10,000,000.00 (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 2035 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 NSB
Holdings, Inc. 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 

 

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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 officer signing the
Officer’s Certificate has read the covenant or condition and the definitions
relating thereto;

 

(b)                                 a brief statement of the nature and scope of
the examination or investigation undertaken by the officer in rendering the
Officer’s Certificate;

 

(c)                                  a statement that the officer has made such
examination or investigation as, in such officer’s opinion, is necessary to
enable such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and

 

(d)                                 a statement as to whether, in the opinion of
the officer, such condition or covenant has been complied with.

 

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

 

“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 

 

5

 

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.

 

6

 

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.

 

7

 

(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 

 

10

 

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 

 

11

 

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.

 

12

 

(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
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.

 

13

 

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):

 

NSB Holdings, Inc.

4077 Forsyth Road

Macon, Georgia 31210

Attention:  Carol W. Soto

Telecopy:  478-405-9157

 

(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.

 

14

 

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

 

15

 

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

 

 

	
   

  	
  NSB HOLDINGS, INC., as
  Guarantor

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark A. Stevens

  	
   

  
	
   

  	
   

  	
   

  	
  Name:  Mark A. Stevens

  
	
   

  	
   

  	
   

  	
  Title:    President & Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WILMINGTON TRUST COMPANY,
  as Guarantee

  Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Heather L. Williamson

  	
   

  
	
   

  	
   

  	
   

  	
  Name:  Heather L. Williamson

  	
   

  
	
   

  	
   

  	
   

  	
  Title:    Financial Services Officer

  

 

16Exhibit 4.3

 

	
   

  	
   

  	
   

  

 

 

AMENDED
AND RESTATED DECLARATION

OF TRUST

 

by and among

 

WILMINGTON
TRUST COMPANY,

as Delaware
Trustee,

 

WILMINGTON
TRUST COMPANY,

as
Institutional Trustee,

 

NSB
HOLDINGS, INC.,

as Sponsor,

 

and

 

MARK A.
STEVENS and
CAROL W. SOTO,

as Administrators,

 

Dated as
of April 28, 2005

 

 

	
   

  	
   

  	
   

  

 

 

TABLE OF
CONTENTS

 

	
  ARTICLE I
  INTERPRETATION AND DEFINITIONS

  	
   

  
	
  Section 1.1.

  	
  Definitions.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II
  ORGANIZATION

  	
   

  
	
  Section 2.1.

  	
  Name.

  	
   

  
	
  Section 2.2.

  	
  Office.

  	
   

  
	
  Section 2.3.

  	
  Purpose.

  	
   

  
	
  Section 2.4.

  	
  Authority.

  	
   

  
	
  Section 2.5.

  	
  Title
  to Property of the Trust.

  	
   

  
	
  Section 2.6.

  	
  Powers
  and Duties of the Trustees and the Administrators.

  	
   

  
	
  Section 2.7.

  	
  Prohibition
  of Actions by the Trust and the Institutional Trustee.

  	
   

  
	
  Section 2.8.

  	
  Powers
  and Duties of the Institutional Trustee.

  	
   

  
	
  Section 2.9.

  	
  Certain
  Duties and Responsibilities of the Trustees and Administrators.

  	
   

  
	
  Section 2.10.

  	
  Certain
  Rights of Institutional Trustee.

  	
   

  
	
  Section 2.11.

  	
  Delaware Trustee.

  	
   

  
	
  Section 2.12.

  	
  Execution of
  Documents.

  	
   

  
	
  Section 2.13.

  	
  Not
  Responsible for Recitals or Issuance of Securities.

  	
   

  
	
  Section 2.14.

  	
  Duration of Trust.

  	
   

  
	
  Section 2.15.

  	
  Mergers.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III SPONSOR

  	
   

  
	
  Section 3.1.

  	
  Sponsor’s
  Purchase of Common Securities.

  	
   

  
	
  Section 3.2.

  	
  Responsibilities
  of the Sponsor.

  	
   

  
	
  Section 3.3.

  	
  Expenses.

  	
   

  
	
  Section 3.4.

  	
  Right to Proceed.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV
  INSTITUTIONAL TRUSTEE AND ADMINISTRATORS

  	
   

  
	
  Section 4.1.

  	
  Number of
  Trustees.

  	
   

  
	
  Section 4.2.

  	
  Delaware
  Trustee; Eligibility.

  	
   

  
	
  Section 4.3.

  	
  Institutional
  Trustee; Eligibility.

  	
   

  
	
  Section 4.4.

  	
  Administrators.

  	
   

  
	
  Section 4.5.

  	
  Appointment,
  Removal and Resignation of Trustees and Administrators.

  	
   

  
	
  Section 4.6.

  	
  Vacancies
  Among Trustees.

  	
   

  
	
  Section 4.7.

  	
  Effect of
  Vacancies.

  	
   

  
	
  Section 4.8.

  	
  Meetings
  of the Trustees and the Administrators.

  	
   

  
	
  Section 4.9.

  	
  Delegation of
  Power.

  	
   

  
	
  Section 4.10.

  	
  Conversion,
  Consolidation or Succession to Business.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V
  DISTRIBUTIONS

  	
   

  
	
  Section 5.1.

  	
  Distributions.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI
  ISSUANCE OF SECURITIES

  	
   

  
	
  Section 6.1.

  	
  General
  Provisions Regarding Securities.

  	
   

  
	
  Section 6.2.

  	
  Paying
  Agent, Transfer Agent and Registrar.

  	
   

  
	
  Section 6.3.

  	
  Form and
  Dating.

  	
   

  
	
  Section 6.4.

  	
  Book-Entry
  Capital Securities.

  	
   

  
	
  Section 6.5.

  	
  Mutilated,
  Destroyed, Lost or Stolen Certificates.

  	
   

  
						

 

i

 

	
  Section 6.6.

  	
  Temporary
  Securities.

  	
   

  
	
  Section 6.7.

  	
  Cancellation.

  	
   

  
	
  Section 6.8.

  	
  CUSIP
  Numbers.

  	
   

  
	
  Section 6.9.

  	
  Rights
  of Holders; Waivers of Past Defaults.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII DISSOLUTION AND
  TERMINATION OF TRUST

  	
   

  
	
  Section 7.1.

  	
  Dissolution
  and Termination of Trust.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII TRANSFER OF INTERESTS

  	
   

  
	
  Section 8.1.

  	
  General.

  	
   

  
	
  Section 8.2.

  	
  Transfer
  Procedures and Restrictions.

  	
   

  
	
  Section 8.3.

  	
  Deemed
  Security Holders.

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  
	
  Section 9.1.

  	
  Liability.

  	
   

  
	
  Section 9.2.

  	
  Exculpation.

  	
   

  
	
  Section 9.3.

  	
  Fiduciary
  Duty.

  	
   

  
	
  Section 9.4.

  	
  Indemnification.

  	
   

  
	
  Section 9.5.

  	
  Outside
  Businesses.

  	
   

  
	
  Section 9.6.

  	
  Compensation;
  Fee.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X ACCOUNTING

  	
   

  
	
  Section 10.1.

  	
  Fiscal Year.

  	
   

  
	
  Section 10.2.

  	
  Certain Accounting Matters.

  	
   

  
	
  Section 10.3.

  	
  Banking.

  	
   

  
	
  Section 10.4.

  	
  Withholding.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI AMENDMENTS AND MEETINGS

  	
   

  
	
  Section 11.1.

  	
  Amendments.

  	
   

  
	
  Section 11.2.

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

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII REPRESENTATIONS OF
  INSTITUTIONAL TRUSTEE AND THE DELAWARE TRUSTEE

  	
   

  
	
  Section 12.1.

  	
  Representations and Warranties of
  Institutional Trustee.

  	
   

  
	
  Section 12.2.

  	
  Representations of the Delaware Trustee.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII MISCELLANEOUS

  	
   

  
	
  Section 13.1.

  	
  Notices.

  	
   

  
	
  Section 13.2.

  	
  Governing Law.

  	
   

  
	
  Section 13.3.

  	
  Intention
  of the Parties.

  	
   

  
	
  Section 13.4.

  	
  Headings.

  	
   

  
	
  Section 13.5.

  	
  Successors and Assigns.

  	
   

  
	
  Section 13.6.

  	
  Partial
  Enforceability.

  	
   

  
	
  Section 13.7.

  	
  Counterparts.

  	
   

  
	
   

  	
   

  	
   

  

 

	
  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

 

NEW
SOUTHERN STATUTORY TRUST I

 

April 28,
2005

 

AMENDED AND RESTATED DECLARATION OF TRUST (“Declaration”)
dated and effective as of April 28, 2005, 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 New Southern 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 March 23, 2005 (the “Original
Declaration”), and a Certificate of Trust filed with the Secretary of State
of the State of Delaware on March 23, 2005, 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

 

1

 

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

 

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

 

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

 

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

 

“Administrators” means each of Mark A.
Stevens and Carol W. Soto, 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.

 

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

 

“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.

 

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

 

“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.

 

2

 

“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.

 

“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 NSB Holdings, Inc.,
a Georgia 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 2035 to be issued by the
Debenture Issuer under the Indenture.

 

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

 

“Definitive Capital Securities Certificates”
means Capital Securities issued in certificated, fully registered form that are
not Global Capital Securities.

 

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

 

“Depositary” means an organization registered
as a clearing agency under the Exchange Act that is designated as Depositary by
the Administrators or any successor thereto. 
DTC will be the initial Depositary.

 

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

 

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

 

3

 

“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 June 2005 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 June 2005, the rate per
annum of [RATE]%, and for each Distribution Period beginning on or after the
Distribution Payment Date in June 2005, the Coupon Rate for such
Distribution Period.

 

“DTC” means The Depository Trust Company or any
successor thereto.

 

“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.

 

“Exchange Act” means the Securities Exchange
Act of 1934, as amended from time to time, or any successor legislation.

 

“Extension Period” has the meaning set forth in
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, 

 

4

 

employees,
representatives, custodians, nominees or agents of the Institutional Trustee or
Delaware Trustee.

 

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

 

“Global Capital Security” means a Capital
Securities Certificate evidencing ownership of Book-Entry Capital Securities.

 

“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.

 

“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:

 

5

 

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

 

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

 

(c)                                  a
statement that each such officer has made such examination or investigation as,
in such officer’s opinion, is necessary to enable such officer to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and

 

(d)                                 a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.

 

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

 

“Owner” means each Person who is the beneficial
owner of Book-Entry Capital Securities as reflected in the records of the
Depositary or, if a Depositary Participant is not the beneficial owner, then
the beneficial owner as reflected in the records of the Depositary Participant.

 

“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.

 

“QIB” means a “qualified institutional buyer”
as defined in Rule 144A under the Securities Act.

 

“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 

 

6

 

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 NSB Holdings, Inc., a Georgia
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.

 

“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).

 

7

 

“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 “New Southern 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.

 

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.

 

8

 

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 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, 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;

 

(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 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

 

9

 

(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

 

(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 

 

10

 

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

 

(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 

 

11

 

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

 

(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;

 

(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.

 

12

 

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 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:

 

13

 

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

 

(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 

 

14

 

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:

 

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

 

(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 

 

15

 

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 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 

 

16

 

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 obtains actual knowledge of such event or the
Institutional Trustee receives written notice of such event from any Holder,
the Sponsor or the Debenture Trustee;

 

(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 4.1, 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 4.1, the Delaware
Trustee shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of § 3807 of the Statutory Trust Act.

 

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.

 

17

 

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 4 of Annex I.

 

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

 

(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)                                  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;

 

(v)                                 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 the Successor Entity will be
required to register as an Investment Company; and

 

18

 

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

 

(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;

 

19

 

(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

 

(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

 

20

 

(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 Mark A. Stevens and Carol W. Soto.  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 

 

21

 

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.

 

(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 

 

22

 

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 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 

 

23

 

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.

 

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.

 

24

 

(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
Capital Securities issued to QIBs shall be, except as provided in Section 6.4,
Book-Entry Capital Securities issued in the form of one or more Global Capital
Securities registered in the name of the Depositary or its nominee and
deposited with the Depositary or a custodian for the Depositary for credit by
the Depositary to the respective accounts of the Depositary Participants thereof
(or such other accounts as they may direct). 
The Capital Securities issued to a Person other than a QIB shall be
issued in the form of a Definitive Capital Securities Certificate.

 

(d)                                 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.

 

(e)                                  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.

 

(f)                                    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-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

 

25

 

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.                                Book-Entry
Capital Securities.

 

(a)                                  A
Global Capital Security may be exchanged, in whole or in part, for Definitive
Capital Securities Certificates registered in the names of Owners only if such
exchange complies with Article VIII and (i) the Depositary advises the
Administrators and the Institutional Trustee in writing that the Depositary is
no longer willing or able to properly discharge its responsibilities with
respect to the Global Capital Security, and no qualified successor is appointed
by the Administrators within ninety (90) days of receipt of such notice, (ii)
the Depositary ceases to be a clearing agency registered under the Exchange Act
and the Administrators fail to appoint a qualified successor within ninety (90)
days of obtaining knowledge of such event, (iii) the Administrators at their
option advise the Institutional Trustee in writing that the Trust elects to
terminate the book-entry system through the Depositary, or (iv) an Indenture
Event of Default has occurred and is continuing.  Upon the occurrence of any event specified in
clause (i), (ii), (iii) or (iv) above, the Administrators shall notify the
Depositary and instruct the Depositary to notify all Owners of Book-Entry Capital
Securities and the Institutional Trustee of the occurrence of such event and of
the availability of Definitive Capital Securities Certificates to Owners of the
Capital Securities requesting the same. 
Upon the issuance of Definitive Capital Securities Certificates, the
Administrators and the Institutional Trustee shall recognize the Holders of the
Definitive Capital Securities Certificates as Holders.  Notwithstanding the foregoing, if an Owner of
a beneficial interest in a Global Capital Security wishes at any time to
transfer an interest in such Global Capital Security to a Person other than a
QIB, such transfer shall be effected, subject to the Applicable Depositary
Procedures, in accordance with the provisions of this Section 6.4 and Article
VIII, and the transferee shall receive a Definitive Capital Securities
Certificate in connection with such transfer. 
A holder of a Definitive Capital Securities Certificate that is a QIB
may upon request, and in accordance with the provisions of this Section 6.4 and
Article VIII, exchange such Definitive Capital Securities Certificate for a
beneficial interest in a Global Capital Security.

 

(b)                                 If
any Global Capital Security is to be exchanged for Definitive Capital
Securities Certificates or canceled in part, or if any Definitive Capital
Securities Certificate is to be exchanged in whole or in part for any Global
Capital Security, then either (i) such Global Capital Security shall be so
surrendered for exchange or cancellation as provided in this Section 6.4 and
Article VIII or (ii) the aggregate liquidation amount represented by such
Global Capital Security shall be reduced, subject to Section 6.3, or increased
by an amount equal to the liquidation amount represented by that portion of the

 

26

 

Global Capital Security
to be so exchanged or canceled, or equal to the liquidation amount represented
by such Definitive Capital Securities Certificates to be so exchanged for any
Global Capital Security, as the case may be, by means of an appropriate
adjustment made on the records of the Registrar, whereupon the Institutional
Trustee, in accordance with the Applicable Depositary Procedures, shall
instruct the Depositary or its authorized representative to make a
corresponding adjustment to its records. Upon any such surrender to the
Administrators or the Registrar of any Global Capital Security or Securities by
the Depositary, accompanied by registration instructions, the Administrators,
or any one of them, shall execute the Definitive Capital Securities Certificates
in accordance with the instructions of the Depositary.  None of the Registrar, Administrators, or the
Institutional Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be fully protected in
relying on, such instructions.

 

(c)                                  Every
Definitive Capital Securities Certificate executed and delivered upon
registration or transfer of, or in exchange for or in lieu of, a Global Capital
Security or any portion thereof shall be executed and delivered in the form of,
and shall be, a Global Capital Security, unless such Definitive Capital
Securities Certificate is registered in the name of a Person other than the
Depositary for such Global Capital Security or a nominee thereof.

 

(d)                                 The
Depositary or its nominee, as registered owner of a Global Capital Security,
shall be the Holder of such Global Capital Security for all purposes under this
Declaration and the Global Capital Security, and Owners with respect to a
Global Capital Security shall hold such interests pursuant to the Applicable
Depositary Procedures.  The Registrar,
the Administrators and the Institutional Trustee shall be entitled to deal with
the Depositary for all purposes of this Declaration relating to the Global
Capital Securities (including the payment of the liquidation amount of and
Distributions on the Book-Entry Capital Securities represented thereby and the
giving of instructions or directions by Owners of Book-Entry Capital Securities
represented thereby and the giving of notices) as the sole Holder of the
Book-Entry Capital Securities represented thereby and shall have no obligations
to the Owners thereof.  None of the
Administrators, the Institutional Trustee nor the Registrar shall have any
liability in respect of any transfers effected by the Depositary.

 

(e)                                  The
rights of the Owners of the Book-Entry Capital Securities shall be exercised
only through the Depositary and shall be limited to those established by law,
the Applicable Depositary Procedures and agreements between such Owners and the
Depositary and/or the Depositary Participants; provided, however, solely for
the purpose of determining whether the Holders of the requisite amount of
Capital Securities have voted on any matter provided for in this Declaration,
to the extent that Capital Securities are represented by a Global Capital
Security, the Administrators and the Institutional Trustee may conclusively
rely on, and shall be fully protected in relying on, any written instrument
(including a proxy) delivered to the Institutional Trustee by the Depositary
setting forth the Owners’ votes or assigning the right to vote on any matter to
any other Persons either in whole or in part. 
To the extent that Capital Securities are represented by a Global
Capital Security, the initial Depositary will make book-entry transfers among
the Depositary Participants and receive and transmit payments on the Capital
Securities that are represented by a Global Capital Security to such Depositary
Participants, and none of the Sponsor, the Administrators or the Institutional
Trustee shall have any responsibility or obligation with respect thereto.

 

(f)                                    To
the extent that a notice or other communication to the Holders is required
under this Declaration, for so long as Capital Securities are represented by a
Global Capital Security, the Administrator and the Institutional Trustee shall
give all such notices and communications to the Depositary, and shall have no
obligations to the Owners.

 

 

27

 

Section 6.5.                                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 6.5, 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 6.6.                                Temporary
Securities.  Until definitive Securities are ready for
delivery, the Administrators may prepare and, in the case of the Capital
Securities, the Institutional Trustee shall authenticate, temporary
Securities.  Temporary Securities shall
be substantially in the form of definitive Securities but may have variations
that the Administrators consider appropriate for temporary Securities.  Without unreasonable delay, the Administrators
shall prepare and, in the case of the Capital Securities, the Institutional
Trustee shall authenticate, definitive Securities in exchange for temporary
Securities.

 

Section 6.7.                                Cancellation.  The
Administrators at any time may deliver Securities to the Institutional Trustee
for cancellation.  The Registrar shall
forward to the Institutional Trustee any Securities surrendered to it for
registration of transfer, redemption or payment.  The Institutional Trustee shall promptly
cancel all Securities surrendered for registration of transfer, payment,
replacement or cancellation and shall dispose of such canceled Securities as
the Administrators direct.  The
Administrators may not issue new Securities to replace Securities that have
been paid or that have been delivered to the Institutional Trustee for
cancellation.

 

Section
6.8.                                CUSIP
Numbers.  The Trust in issuing the Securities may use “CUSIP”
numbers (if then generally in use), and, if so, the Institutional Trustee shall
use CUSIP numbers in notice of redemption as a convenience to Holders; provided,
however, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Securities or as
contained in any notice of redemption and that identification numbers printed
on the Securities and any such redemption shall not be affected by any defect
in or omission of such numbers.  The
Trust shall promptly notify the Institutional Trustee in writing of any change
in the CUSIP numbers.

 

Section 6.9.                                Rights
of Holders; Waivers of Past Defaults.

 

(a)                                  The
legal title to the Trust Property is vested exclusively in the Institutional
Trustee (in its capacity as such) 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 Indenture
Event of Default, the Debenture Trustee fails or the holders of not less than
25% in principal amount of the

 

28

 

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, expenses,
disbursements and advances of the Debenture Trustee and the Institutional
Trustee, their agents and counsel; and

 

(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

 

29

 

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 6.9.

 

(c)                                  Except
as otherwise provided in paragraphs (a) and (b) of this Section 6.9,
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 June 15, 2040, the expiration of the term of the
Trust;

 

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

 

(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.

 

30

 

(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,
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 6.7.  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.

 

31

 

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:

 

[If the Capital Security is
to be Global Capital Security- THIS CAPITAL SECURITY IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE DECLARATION HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (“DTC”) OR A NOMINEE OF
DTC.  THIS CAPITAL SECURITY IS
EXCHANGEABLE FOR CAPITAL SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
DECLARATION, AND NO TRANSFER OF THIS CAPITAL SECURITY (OTHER THAN A TRANSFER OF
THIS CAPITAL SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF
DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.

 

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

 

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

 

32

 

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
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

 

33

 

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.

 

(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.

 

34

 

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

 

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

 

35

 

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

 

(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

 

36

 

Administrators,
(ii) if such a Quorum is not obtainable, or, even if obtainable, if a
quorum of disinterested Administrators so directs, by independent legal counsel
in a written opinion or (iii) by the Common Security Holder of the Trust,
that, based upon the facts known to the Administrators, counsel or the Common
Security Holder at the time such determination is made, such Indemnified Person
acted in bad faith or in a manner that such Indemnified Person did not believe
to be in the best interests of the Trust, or, with respect to any criminal
proceeding, that such Indemnified Person believed or had reasonable cause to
believe his conduct was unlawful.  In no
event shall any advance be made in instances where the Administrators,
independent legal counsel or the Common Security Holder reasonably determine
that such Indemnified Person deliberately breached his duty to the Trust or its
Common or Capital Security Holders.

 

(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

 

37

 

character that, if
presented to the Trust, could be taken by the Trust, and any Covered Person,
the Sponsor, the Delaware Trustee and the Institutional Trustee shall have the
right to take for its own account (individually or as a partner or fiduciary)
or to recommend to others any such particular investment or other opportunity.  Any Covered Person, the Delaware Trustee and
the Institutional Trustee may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor, or may act as
depositary for, trustee or agent for, or act on any committee or body of
holders of, securities or other obligations of the Sponsor or its Affiliates.

 

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 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 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

 

38

 

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.

 

(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

 

39

 

(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

 

(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; or

 

(B) 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

 

40

 

application
thereof by any legislative body, court, government agency or regulatory
authority) which amendment does not have a material adverse effect on the
rights, preferences or privileges of the Holders of Securities;

 

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

 

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

 

41

 

(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

 

42

 

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):

 

New Southern Statutory Trust I

c/o NSB Holdings, Inc.

4077 Forsyth Road

Macon, Georgia 31210

Attention: 
Carol W. Soto

Telecopy: 
478-405-9157

 

(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):

 

Wilmington Trust Company

 

43

 

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):

 

NSB Holdings, Inc.

4077 Forsyth Road

Macon, Georgia 31210

Attention: 
Carol W. Soto

Telecopy: 
478-405-9157

 

(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.

 

44

 

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

 

45

 

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/ Heather L.
  Williamson

  	
   

  
	
   

  	
   

  	
  Name:  Heather
  L. Williamson

  	
   

  
	
   

  	
   

  	
  Title:   
  Financial Services Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WILMINGTON TRUST
  COMPANY,

  	
   

  
	
   

  	
  as Institutional
  Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Heather L.
  Williamson

  	
   

  
	
   

  	
   

  	
  Name:  Heather
  L. Williamson

  	
   

  
	
   

  	
   

  	
  Title:   
  Financial Services Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NSB HOLDINGS, INC., as
  Sponsor

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark A. Stevens

  	
   

  
	
   

  	
   

  	
  Name:  Mark A.
  Stevens

  	
   

  
	
   

  	
   

  	
  Title:    President
  & Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ADMINISTRATORS OF NEW SOUTHERN STATUTORY TRUST I

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carol W. Soto

  	
   

  
	
   

  	
   

  	
  Administrator

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark A. Stevens

  	
   

  
	
   

  	
   

  	
  Administrator

  	
   

  

 

46

 

ANNEX I

 

TERMS OF
SECURITIES

 

Pursuant to Section 6.1
of the Amended and Restated Declaration of Trust, dated as of April 28,
2005 (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)                                  10,000
Floating Rate Capital Securities of New Southern Statutory Trust I (the “Trust”),
with an aggregate stated liquidation amount with respect to the assets of the
Trust of ten million dollars ($10,000,000.00) 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)                                 310
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 June 2005 at a rate per annum of [RATE]% and shall
bear interest for each successive Distribution Period beginning on (and
including) the Distribution Payment Date in June 2005, 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 2.05% (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

 

commencing on the
Distribution Payment Date in June 2005 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 funds available for the payment of such
distributions in the Property Account of the Trust.  The Trust’s

 

I-2

 

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, after satisfaction of
liabilities of creditors of the Trust to the extent not satisfied by the
Debenture Issuer,

 

I-3

 

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 June 15, 2035. 
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 June 2010, 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, such guidelines
applied to the Sponsor as if the Sponsor were subject to such guidelines); provided,
however, that the inability of the Sponsor to treat all or any portion
of the liquidation amount of the Capital Securities as Tier l Capital
shall not constitute the basis for a Capital Treatment Event, if such inability
results from the Sponsor having cumulative preferred stock, minority interests
in consolidated subsidiaries, or any other class of security or interest which
the Federal Reserve or OTS, as applicable, may now or hereafter accord
Tier 1 Capital treatment in excess of the amount which may now or
hereafter qualify for treatment as Tier 1 Capital under applicable capital
adequacy guidelines; provided  further, however, that the
distribution of Debentures in connection with the Liquidation of the Trust shall
not in and of itself constitute a Capital Treatment Event unless such
Liquidation shall have occurred in connection with a Tax Event or an Investment
Company Event.

 

“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 June 15, 2035.

 

“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 June 2010.

 

“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

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 2005

  	
   

  	
  104.625

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  September 2005

  	
   

  	
  104.300

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  December 2005

  	
   

  	
  104.000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  March 2006

  	
   

  	
  103.650

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  June 2006

  	
   

  	
  103.350

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  September 2006

  	
   

  	
  103.000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  December 2006

  	
   

  	
  102.700

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  March 2007

  	
   

  	
  102.350

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  June 2007

  	
   

  	
  102.050

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  September 2007

  	
   

  	
  101.700

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  December 2007

  	
   

  	
  101.400

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  March 2008

  	
   

  	
  101.050

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  June 2008

  	
   

  	
  100.750

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  September 2008

  	
   

  	
  100.450

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  December 2008

  	
   

  	
  100.200

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  March 2009 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

I-6

 

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

 

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

 

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

 

A-1-1

 

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 $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

  	
   

  	
  10,000 Capital
  Securities

  
	
  [CUSIP NO. [                  ]]

  	
   

  	
   

  

 

April 28,
2005

 

Certificate
Evidencing Floating Rate Capital Securities

 

of

 

New Southern
Statutory Trust I

 

(liquidation amount $1,000.00 per Capital Security)

 

A-1-2

 

New Southern Statutory
Trust I, a statutory trust created under the laws of the State of Delaware
(the “Trust”), hereby certifies that Cede & Co. (the “Holder”) 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 April 28,
2005, among Mark A. Stevens and Carol W. Soto, as Administrators,
Wilmington Trust Company, as Delaware Trustee, Wilmington Trust Company, as
Institutional Trustee, NSB Holdings, Inc., as Sponsor, and the holders from
time to time of undivided beneficial interests in the assets of the Trust,
including the designation of the terms of the Capital Securities as set forth
in Annex I to such amended and restated declaration as the same may be
amended from time to time (the “Declaration”). 
Capitalized terms used herein but not defined shall have the meaning
given them in the Declaration. The Holder is entitled to the benefits of the
Guarantee to the extent provided therein. The Sponsor will provide a copy of
the Declaration, the Guarantee, and the Indenture to the Holder without charge
upon written request to the Sponsor at its principal place of business.

 

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.

 

	
   

  	
  NEW SOUTHERN 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 [RATE]%
beginning on (and including) the date of original issuance and ending on (but
excluding) the Distribution Payment Date in June 2005 and at an annual
rate for each successive period beginning on (and including) the Distribution
Payment Date in June 2005, 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 2.05% (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”), commencing on the
Distribution Payment Date in June 2005. 
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

  	
   

  	
  310 Common
  Securities

  

 

April 28,
2005

 

Certificate
Evidencing Floating Rate Common Securities

 

of

 

New Southern
Statutory Trust I

 

New Southern Statutory
Trust I, a statutory trust created under the laws of the State of Delaware
(the “Trust”), hereby certifies that NSB Holdings, Inc. (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 April 28, 2005, among
Mark A. Stevens and Carol W. Soto, as Administrators, Wilmington
Trust Company, as Delaware Trustee, Wilmington Trust Company, as Institutional
Trustee, NSB Holdings, Inc., 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.

 

	
   

  	
  NEW SOUTHERN 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 [RATE]%
beginning on (and including) the date of original issuance and ending on (but
excluding) the Distribution Payment Date in June 2005 and at an annual
rate for each successive period beginning on (and including) the Distribution
Payment Date in June 2005, 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 2.05% (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”), commencing on the Distribution
Payment Date in June 2005. 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
  Guarantee(2)

  
							

 

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

 

A-2-5

 

EXHIBIT B

 

SPECIMEN
OF INITIAL DEBENTURE

 

(See Document No. 17)

 

B-1

 

EXHIBIT C

 

PLACEMENT
AGREEMENT

 

(See Document No. 1)

 

C-1

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