EX-10.3 4 exhibit103.htm EXHIBIT 10.3
GUARANTEE AGREEMENT
Central Bancorp, Inc.
Dated as of December 27, 2005
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358764-2

TABLE OF CONTENTS

|  | Page
ARTICLE I
DEFINTIONS AND INTERPRETATION
SECTION | 1.1. | Definitions and Interpretation | 1
ARTICLE II
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION | 2.1. | Powers and duties of the Guarantee Trustee | 3
SECTION | 2.2. | Certain Rights of the Guarantee Trustee | 5
SECTION | 2.3. | Not Responsible for Recitals of Issuance of Guarantee | 6
SECTION | 2.4. | Events of Default; Wavier | 6
SECTION | 2.5. | Events of Default; Notice | 6
ARTICLE III
THE GUARANTEE TRUSTEE
SECTION | 3.1. | The Guarantee Trustee; Eligibility | 7
SECTION | 3.2. | Appointment, Removal and Resignation of the Guarantee Trustee | 7
ARTICLE IV
GUARANTEE
SECTION | 4.1. | Guarantee | 8
SECTION | 4.2. | Waiver of Notice and Demand | 8
SECTION | 4.3. | Obligations Not Affected | 8
SECTION | 4.4. | Rights of Holders | 9
SECTION | 4.5. | Guarantee of Payment | 10
SECTION | 4.6. | Subrogation | 10
SECTION | 4.7. | Independent Obligations | 10
SECTION | 4.8. | Enforcement | 10
ARTICLE V
LIMITATION OF TRANSACTIONS;SUBORDINATION
SECTION | 5.1. | Limitation of Transactions | 10
SECTION | 5.2. | Ranking | 11
ARTICLE VI
TERMINATION
SECTION | 6.1. | Termination | 11
ARTICLE VII
INDEMNIFICATION
SECTION | 7.1. | Exculpation | 11
SECTION | 7.2. | Indemnification | 12
SECTION | 7.3. | Compensation; Reimbursement of Expenses | 13
ARTICLE VIII
MISCELLANEOUS
SECTION | 8.1. | Successors and Assigns | 13
SECTION | 8.2. | Amendments | 13
SECTION | 8.3. | Notices | 13
SECTION | 8.4. | Benefit | 14
SECTION | 8.5. | Governing Law | 14
SECTION | 8.6. | Counterparts | 14

i

GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Guarantee"), dated as of December 27, 2005, is executed and delivered by Central Bancorp, Inc., incorporated in Texas (the "Guarantor"), and JPMorgan Chase Bank, National Association, as trustee (the "Guarantee Trustee"), for the benefit of the Holders (as defined herein) from time to time of the Capital Securities (as defined herein) of Central Bancorp Statutory Trust I, a Delaware statutory trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the "Declaration"), dated as of December 27, 2005, among the trustees named therein of the Issuer, Central Bancorp, Inc., as sponsor, and the Holders from time to time of undivided beneficial interests in the assets of the Issuer, the Issuer is issuing on the date hereof securities, having an aggregate liquidation amount of up to $26,000,000, designated the TP Securities (the "Capital Securities"); and
WHEREAS, as incentive for the Holders to purchase the Capital Securities, the Guarantor desires irrevocably and unconditionally to agree, to the extent set forth in this Guarantee, to pay to the Holders of Capital Securities the Guarantee Payments (as defined herein) and to make certain other payments on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of the Capital Securities, which purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions and Interpretation.
In this Guarantee, unless the context otherwise requires:
(a)capitalized terms used in this Guarantee but not defined in the preamble above have the respective meanings assigned to them in this Section 1.1;
(b)a term defined anywhere in this Guarantee has the same meaning throughout;
(c)all references to "the Guarantee" or "this Guarantee" are to this Guarantee as modified, supplemented or amended from time to time;

(d) | all references in this Guarantee to Articles and Sections are to Articles and

Sections ofthis Guarantee, unless otherwise specified;
(e) terms defined in the Declaration as of the date of execution of this Guarantee have the same meanings when used in this Guarantee, unless otherwise defined in this Guarantee or unless the context otherwise requires; and

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

"Beneficiaries" means any Person to whom the Issuer is or hereafter becomes indebted or liable.
"Corporate Trust Office" means the office of the Guarantee Trustee at which the corporate trust business of the Guarantee Trustee shall, at any particular time, be principally administered.
"Covered Person" means any Holder of Capital Securities.
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"Debentures" means the junior subordinated debentures of Central Bancorp, Inc., designated the Junior Subordinated Debt Securities due 2035, held by the Institutional Trustee (as defined in the Declaration) of the Issuer.
"Event of Default" has the meaning set forth in Section 2.4.
"Guarantee Payments" means the following payments or distributions, without duplication, with respect to the Capital Securities, to the extent not paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined in the Declaration) which are required to be paid on such Capital Securities to the extent the Issuer has funds a v ailable in the Property Account (as defined in the Declaration) therefor at such time, (ii) the Redemption Price (as defined in the Indenture) to the extent the Issuer has funds available in the Property Account therefor at such time, with respect to any Capital Securi t ies called for redemption by the Issuer, (iii) the Special Redemption Price (as defined in the Indenture) to the extent the Issuer has funds available in the Property Account therefor at such time, with re s pect to Capital Securities called for redemption upon the occurrence of a Special Event (as defined in the Indenture), and (iv) upon a voluntary or involuntary liquidation, dissolution, winding-up or termination of the Issuer (other than in connection with the distribution of Debentures to the Holders of the Capital Securities in exchange therefor as provided in the Declaration), the lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid Distributions on the Capital Securities to the date of payment, to the extent the Issuer has funds a v ailable in the Property Account therefor at such time, and (b) the amount of assets of the Is s uer remaining a v ailable for distribution to Holders in liquidation of the Issuer after satisfa c tion of liabilities to creditors of the Issuer as required by applicable law (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means JPMorgan Chase Bank, National Association, until a Successor Guarantee Trustee has been appointed and has accepted such appointment pursuant to the terms of this Guarantee and thereafter means each such Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records of the Issuer, of any Capital Securities; provided, however, that, in determining whether the holders of the requisite percentage of Capital Securities have given any request, notice, consent or waiver hereunder, "Holder" shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Guarantee Trustee (including in its individual capacity), any Affiliate of the Guarantee Trustee, or any officers, directors, shareholders,members, partners, emplo y ees, repre s entati v es, nominee s, custodians or agents of the Guarantee
Trustee.
"Indenture" mean s the Indenture, d at ed as of December 27, 2005, between the Guarantor and JPMorgan Chas e Bank, National As s ociation, not in it s individual capacity but solely as trustee, and any indenture supplemental thereto pursuant to which the Debentures are to be issued to the Institutional Trustee of the Is s uer.
"Liquidation Distribution" has the meanmg set forth in the definition of
"Guarantee Payments" herein.
"Majority in liquidation amount of the Capital Securities" means Holder(s) of outstanding Capital Securities, v oting together as a class, but separatel y from the holders of Common Securities, of more than 50% of the aggregate liquidation amount (including the stated amount that would be paid on

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redemption, liquidation or otherwise, plus accrued and unpaid Distributions to, but excluding, the date upon w hich the v oting perce n tages 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 obliga t ions of the Issuer to pay to holders of any Trust Securities the amounts due such holders pur s uant to the terms of the Trust Securities.
"Officer's Certificate" means, with re s pect to any Person, a certificate signed by one Authorized Officer of such Person. Any Officer's Certific a te delivered with respect to compliance with a condition or covenant provided for in thi s Guarantee s hall include:
(a) a s tatement that each officer s igning the Officer's Certificate has read the co v enant or condition and the definitions relating thereto;
(b)a brief statement of the nature and s cope of the examination or in v estigation undertaken by each officer in rendering the Officer's Certificate;
(c)a statement that each s uch offic e r has made such examination or investigation as, in such officer's opinion, is neces s ary to enable such officer to express an informed opinion as to whether or not such co v enant or condition has been complied with; and
(d)a statement that each s uch offic e r has made such examination or investigation as, in such officer's opinion, is neces s ary to enable such officer to express an informed opinion as to whether or not such co v enant or condition has been complied with; and
"Person" means a legal person, including an y individual, corporation, estate, partnership, joint venture, association, joint stock company, limited liability compan y, trust, unincorporated association, or government or any agency or political subdi v ision thereof, or any other entity of whatever nature.
"Responsible Officer" means, with re s pect to the Guarantee Tru s tee, an y officer within the Corporate Trust Office of the Guarantee Trustee with direct responsibility for the administration of any matters relating to this Guarantee, including an y vice pre s ident, any assistant vice president, any secretary, any assistant secretary, the treasurer, any assistant treasurer, any trust officer or other officer of the Corporate Trust Office of the Guarantee Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of that officer's knowledge of and familiarity with the particular subject.
"Successor Guarantee Trustee" means a succe s sor Guarantee Trustee possessing the qualifications to act as Guarantee Trustee under Section 3 .1.
"Trust Securities" means the Common Securities and the Capital Securities.
ARTICLE II
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 2.1. Powers and Duties of the Guarantee Trustee.
(a)This Guarantee shall be held by the Guarantee Trustee for the benefit of the Holders of the Capital Securities, and the Guarantee Trustee shall not transfer this Guarantee to any Person except a Holder of Capital Securities exercising his or her rights pursuant to Section 4.4(b) or to a Successor Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its appointment to act as Successor Guarantee Trustee. The right, title and interest of the Guarantee Trustee shall

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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 actuall y 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 E v ent of Default and after the curing or waiving of all Events of Default that may ha v e occurred, shall undertake to perform only such duties as are specifically set forth in this Guarantee, and no implied covenants shall be read into this Guarantee against the Guarantee Trustee. In case an Event of Default has occurred (that has not been cured or waived pursuant to Section 2.4(b)) and is actually known to a Responsible Officer of the Guarantee Trustee, the Guarantee Trustee shall exercise such of the rights and powers vested in it by this Guarantee, and use the same degree of care and skill in its exercise thereof, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.
(d)No provision of this Guarantee shall be construed to relieve the Guarantee Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that
(i) prior to the occurrence of any Event of Default and after the curing or waiving of all Events of Default that may have occurred:
(A)the duties and obligations of the Guarantee Trustee shall be determined solely b y the expre s s provisions of this Guarantee, and the Guarantee Tru s tee shall not be liable except for the performance of such duties and obligations as are specifi c ally 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 expre s sed therein, upon any certificates or opinions furni s hed to the Guarantee Trustee and conforming to the requirements of this Guarantee; but in the case of any such certificates or opinions furnished to the Guarantee Trust e e, the Guarantee Trustee shall be under a duty to examine the same to determine whether or not on their face they conform to the requirements of this Guarantee;
(ii)the Guarantee Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Guarantee Trustee, unless it shall be proved that such Responsible Officer of the Guarantee Trustee or the Guarantee Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made;
(iii)the Guarantee Trustee shall not be liable w ith respect to an y 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 a v ailable to the Guarantee Trustee, or exercising any trust or power conferred upon the Guarantee Trustee under this Guarantee; and
(iv)no provision of this Guarantee shall require the Guarantee Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if the Guarantee Trustee shall ha v e reasonable grounds for believing that the

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repayment of such funds is not reasonably assured to it under the terms of this Guarantee, or security and indemnity, reasonably satisfactory to the Guarantee Trustee, against such risk or liability is not reasonably assured to it.
SECTION 2.2. Certain Rights of the Guarantee Trustee.

(a) | Subject to the provisions of Section 2.1:

(i)The Guarantee Trustee ma y 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 c ontemplated b y this
Guarantee shall be sufficientl y evidenced b y an Officer's Certificate.
(iii)Wheneve r, in the administration of this Guarantee, the Guarantee Trustee shall deem it de s irable that a matter be proved or established before taking, suffering or omitt i ng any a c tion hereunder, the Guarantee Trustee (unless other evidence i s herein s pecificall y prescribed) ma y, in the absence of bad faith on its part, request and conclus i vel y rely up o n an Officer's Certificate of the Guaran t or w hich, upon receipt of s u c h reques t, s hall be promptl y delivered by the Guarantor.
(iv)The Guaran t ee Trus t ee shall have no du ty to se e to any recording, filing or registra t ion of an y in s trument or other wri ting (or an y r er ecording, refiling or reregi s trat i on thereof).
(v)The Guaran t ee Tru st ee ma y consult with coun s el of its selection, and the ad v ice or opinion o f s u c h co uns e l with respect t o legal matter s shall be full and complete authori z at i on and protection in respe c t o f an y action taken, s uffered or omitted b y it hereunder in g o od faith and in accordance w ith s uch advi c e or opinion. Such couns e l ma y be couns e l to the Guarantor or any o f it s Affiliates and ma y in c lude an y of i t s emp l o y ee s. The Guarantee Trustee shall have the righ t at an y time to s eek instru ctio ns concerning the admini s tration of thi s Guarantee from any court of competent juri s diction.
(vi)The Guarantee Tru s tee shall be und er no obligation to exerci s e an y of the rights or po w ers v e s ted in i t b y thi s Guarantee at the reque st or direction of any Holder, unless s uch Holder shall ha v e pro vi ded to th e Guarantee Trustee such securit y and indemnity, r e asonably s ati s factory to the Guarant e e Tru s tee, agai ns t the cost s, exp en ses (including attorne y s' fee s and e x pen ses and the e x p e nses of the Guarantee Trustee's agent s, nomin ees or cu s todian s) and liab i lit i es that might be incurred by it in compl yi ng wi th s uch r eque s t or direc t ion, including such reasonable ad v ances as ma y be requested b y the Guarantee Trustee; provided, howe v er, th a t nothing contained in thi s Section 2.2(a)(vi) shall be taken to relie v e the Guarantee Tru s tee, upon the occurrence of an E v ent of Default, of its obligat i o n to exercise the right s and po w ers v e s ted in i t b y thi s Guarantee.
(vii)The Guarantee Tru st ee s hall not be bound to make any in v e s ti g at i on into the facts or matt ers stated in an y resolution, certificate, s tatement, i n s trument, opinion, report, notice, reques t, direction, consent, order, bond, debenture, note, other eviden c e of ind e b t edn ess or other paper or document, but the Guarantee Trustee, in its di sc retion, may make such furth e r inquiry or investig a tion into s uch fac ts or matters as it ma y s ee fit.

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(viii)The Guarantee Tru s t e e ma y ex ec ute any of the tru s ts or po w ers he r eunder or perform any dutie s h e reund er e ither directl y or b y or through agents, nominees, cu s todians o r a tt orne y s, and the Guarante e Tru s tee 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 s ufficient 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)Whene v er in the administration of this Guarantee the Guarantee Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Guarantee Trustee (A) may request instructions from the Holders of a Majority in liquidation amount of the Capital Securities, (B) ma y refrain from enforcing such remedy or right or taking such other action until such instructions are received and (C) shall be protected in conclusively relying on or acting in accordance with such instructions.
(xi)The Guarantee Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Guarantee.
(b)No pro v ision 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, po w er, duty or obligation conferred or imposed on it, in any jurisdiction in which it shall be illegal or in which the Guarantee Tru s tee shall be unqualified or incompetent in accordance with applicable la w to perform any such a c t or acts or to e x ercise any such right, power, duty or obligation. N o permissive power or authority available to the Guarantee Trustee shall be construed to be a duty.
SECTION 2.3. Not Responsible for Recitals o r 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 responsibili ty for their correctness. The Guarantee Trustee makes no representation as to the validity or sufficiency of this Guarantee.
SECTION 2.4. Events of Default; Waive r.
(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 E v ent of Default and its consequences. Upon such wai v er, 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.

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(a)The Guarantee Trustee shall, within 90 days after the occurrence of an Event of Defau l t, transmit by mail, first class postage prepaid, to the Holders of the Capital Securities, notices of all Events of Default actua ll y known to a Responsible Office r 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 Capita l Securities.
(b)The Guarantee Trustee shall not be charged with knowledge of any Event of Default unless the Guarantee Trustee shall have received written notice thereof from the Guarantor or a Holder of the Capital Securities, or a Responsible Officer of the Guarantee Trustee charged with the administration of this Guarantee shall have actual knowledge thereof.
ARTICLE III
THE GUARANTEE TRUSTEE
SECTION 3.1. The Guarantee Trustee; Eligibility.

(a) | There shall at all times be a Guarantee Trustee which shall: (i) not be an Affiliate of the Guarantor; and

(ii) be a corporation or national association organized and doing business under the laws of the United States of America or any state or territory thereof or of the District of Co l umbia, or Person authorized under such l aws 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, territoria l or District of Columbia authority. If such corporation or national association publishes reports of condition at least annually, pursuant to law o r to the r equirements of the supervising or examining authority referred to above, then, for the purposes of this Section 3.l(a)(ii), the combined capital and surplus of such corporation or national association shall be deemed t o be its combined capital and surplus as set forth in its most recent report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to so act under Section 3.l(a), the Guarantee Trustee shall immediate l y resign in the manner and with the effect se t forth in Section 3.2
(c) If the Guarantee Trustee has or shall acquire any "conflicting interest' within the meaning of Section 31 O(b) of the Trust Indenture Act, the Guarantee Trustee shall either eliminate such interest or resign to the extent and in the manner provided by, and subject to, this Guarantee.
SECTION 3.2. Appointment. Removal and Resignation of the Guarantee Trustee.
(a)Subject to Section 3.2(b), the Guarantee Trustee may be appointed or removed without cause at any time b y the Guarantor e x cept during an Event of Default.
(b)The Guarantee Trustee s hall not be remo v ed in accordance with Section
3.2(a) until a Successor Guarantee Trus t ee has been appointed and has accepted such appointment by written instrument executed b y such Succe s sor 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

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in writing executed by the Guarantee Trustee and delivered to the Guarantor, w hich 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 accep t ed appointment as provided in this Section 3.2 within 60 da y s after deli v ery 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 ma y thereupon, after prescribing s uch 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, remo val or resignation.
ARTICLE IV
GUARANTEE
SECTION 4.1. Guarantee.
(a)The Guarantor irre v ocably and unconditionally agrees to pay in full to the Holders the Guarantee Payments (without duplication of amounts theretofore paid by the Issuer), as and when due, regardless of any defense (except as defense of payment by the Issuer), right of set-off or counterclaim that the Issuer may have or assert. The Guarantor's obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by the Guarantor to the Holders or by causing the Issuer to pay such amounts to the Holders.
(b)The Guarantor hereby also agree s to assume any and all Obligations of the Issuer and in the event any such Obligation is not so as s umed, subject to the terms and conditions hereof, the Guarantor hereby irrevocably and unconditionally guarantees to each Beneficiary the full payment, when and as due, of any and all Obligations to such Beneficiaries. This Guarantee is intended to be for the Beneficiaries who have received notice hereof.
SECTION 4.2. Waiver of Notice and Demand.
The Guarantor hereby wai v es 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:

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(a) the release or waiver, by operation of la w or otherwise, of the performance or observance by the Issuer of any express or implied agreement, covenant, term or condition relating to the Capital Securities to be performed or observed by the Issuer;
(b)the extension of time for the payment by the Issuer of all or any portion of the Distributions, Redemption Price, Special Redemption Price, Liquidation Distribution or any other sums payable under the terms of the Capital Securities or the extension of time for the performance of any other obligation under, arising out of, or in connection with, the Capital Securities (other than an extension of time for the payment of the Distributions, Redemption Price, Special Redemption Price, Liquidation Distribution or other sums payable that results from the extension of any interest payment period on the Debentures or any extension of the maturity date of the Debentures permitted by the Inden t ure);
(c)any failure, omission, dela y 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 an y of the assets of the Issuer;
(e)any invalidity of, or defect or deficiency in, the Capital Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or hereby incurred; or
(g)any other circumstance whatsoever that might otherwise con s titute 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 an y of the foregoing.
SECTION 4.4. Rights of Holders.
(a)The Holders of a Majority in liquidat i on 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 re s pect of this Guarantee or to direct the exercise of an y trust or power conferred upon the Guarantee Trustee under this Guarantee; provided, howe v er, that (subject t o Sections 2.1 and 2.2) the Guarantee Trustee shall have the right to decline to follow any s uch direction if the Guarantee Trustee shall determine that the actions so directed would be unjustly prejudicial to the Holders not taking part in such direction or if the Guarantee Trustee being advised by legal counsel determines that the action or proceeding so directed may not lawfully be taken or if the Guarantee Trustee in good faith b y its board of directors or trustees, executive committee or a trust committee of directors or trustees and/or Responsible Officers shall determine that the action or proceeding so directed would involve the Guarantee Trustee in personal liability.
(b)Any Holder of Capital Securities may institute a legal proceeding directly against the Guarantor to enforce the Guarantee Trustee's rights under this Guarantee, without first instituting a legal proceeding against the Issuer, the Guarantee Trustee or any other Person. The Guarantor wai v es 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 directl y against the Guarantor.

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SECTION 4.5. Guarantee of Payment.
This Guarantee creates a guarantee of payment and not of collection.
SECTION 4.6. Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the Holders of Capital Securities against the Issuer in respect of any amounts paid to such Holders b y the Guarantor under this Guarantee; provided, however, that the Guarantor shall not (except to the extent required by applicable provisions of law) be entitled to enforce or exercise any right that it may acquire by way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of payment under this Guarantee, if, after giving effec t to any such payment, any amounts are due and unpaid under this Guarantee. If any amount shall be paid to the Guarantor in violation of the preceding sentence, the Guarantor agrees to hold such amount in trust for the Holders and to pay over such amount to the Holders.
SECTION 4.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are independent of the obligations of the Issuer with respect to the Capital Securities and that the Guarantor shall be liable as principal and as debtor hereunder to make Guarantee Payments pursuant to the terms of this Guarantee notwithstanding the occurrence of any event referred to in subsections (a) through (g), inclusive, of Section 4.3 hereof.
SECTION 4.8. Enforcement.
A Beneficiary may enforce the Obligations of the Guarantor contained in Section 4.l(b) directly against the Guarantor, and the Guarantor waives any right or remedy to require that any action be brought against the Issuer or any other person or entity before proceeding against the Guarantor.
The Guarantor shall be subrogated to all rights (if any) of any Beneficiary against the Issuer in respect of any amounts paid to the Beneficiaries by the Guarantor under this Guarantee; provided, however, that the Guarantor shall not (except to the extent required by applicable provis i ons 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, afte r giving effect to such payment, any amounts are due and unpaid under this Guarantee.
ARTICLE V
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 5.1. Limitation of Transactions.
So long as any Capital Securities remain outstanding, if (a) there shall have occurred and be continuing an Event of Default or (b) the Guarantor shall have selected an Extension Period as provided in the Declaration and such period, or any extension thereof, shall have commenced and be continuing, then the Guarantor may not (x) declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a l iquidation payment with respect to, any of the Guarantor's capital stock or (y) make any payment of principal of or interest or premium, if any, on or repay, repurchase or redeem any debt securities of the Guarantor that rank pari passu in all respects with or junior in interest to the Debentures (other than (i) payments under this Guarantee, (ii) repurchases, redemptions or other acquisitions of shares of capital stock of the Guarantor (A) in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of one or more employees, officers, directors, or consu l tants, (B) in connection with a dividend reinvestment or stockho l der stock purchase plan or (C) in connec t ion with the

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issuance of capital stock of the Guarantor (or securities convertible into or exercisable for such capital stock), as consideration in an acquisition transaction entered into prior to the occurrence of the Event of Default or the applicable Extension Period, (iii) as a result of any exchange, reclassification, combination or conversion of any class or series of the Guarantor's capital stock (or any capital stock of a subsidiary of the Guarantor) for any class or series of the Guarantor's capital stock or of any class or series of the Guarantor's indebtedness for any class or series of the Guarantor's capital stock, (iv) the purchase of fractional interests in shares of the Guarantor's capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged, (v) any declaration of a dividend in connection with any stockholder's rights plan, or the issuance of rights, stock or other property under any stockholder's rights plan, or the redemption or repurchase of rights pursuant thereto, or (vi) any dividend in the form of stock, warrants, options or other rights where the dividend stock or the stock issuable upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks pari passu with or junior to such stock).
SECTION 5.2. Ranking.
This Guarantee will constitute an unsecured obligation of the Guarantor and will rank subordinate and junior in right of payment to all present and future Senior Indebtedness (as defined in the Indenture) of the Guarantor. By their acceptance thereof, each Holder of Capital Securities agrees to the foregoing provisions of this Guarantee and the other terms set forth herein.
The right of the Guarantor to participate in any distribution of assets of any of its subsidiaries upon any such subsidiary's liquidation or reorganization or otherwise is subject to the prior claims of creditors of that subsidiary, except to the e x tent the Guarantor may itself be recognized as a creditor of that subsidiary. Accordingly, the Guarantor's obligations under this Guarantee will be effectively subordinated to all existing and future liabilities of the Guarantor's subsidiaries, and claimants should look only to the assets of the Guarantor for payments thereunder. This Guarantee does not limit the incurrence or issuance of other secured or unsecured debt of the Guarantor, including Senior Indebtedness of the Guarantor, under any indenture or agreement that the Guarantor may enter into in the future or otherwise
ARTICLE VI
TERMINATION
SECTION 6.1. Termination.
This Guarantee shall terminate as to the Capital Securities (i) upon full payment of the Redemption Price or the Special Redemption Price, as the case may be, of all Capital Securities then outstanding, (ii) upon the distribution of all of the Debentures to the Holders of all of the Capital Securities or (iii) upon full payment of the amounts payable in accordance with the Declaration upon dissolution of the Issuer. This Guarantee will continue to be effective or will be reinstated, as the case may be, if at any time any Holder of Capital Securities must restore payment of any sums paid under the Capital Securities or under this Guarantee.
ARTICLE VII
INDEMNIFICATION
SECTION 7 .1. Exculpation.
(a)No Indemnified Person shall be liable, responsible or accountable in damages or otherwise to the Guarantor or an y Covered Person for any loss, damage or claim

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incurred by reason of any act or omiss i on of s uch 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 s uch 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 v alue 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 Securit i es 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.
(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 relie v e 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 b y the Indemnified Person or Persons except as set forth below); provided, however, that such counsel shall be satisfactory to the Indemnified Person. Notwithstanding the Guarantor's election to appoint counsel to represent the Indemnified Person in any action, the Indemnified Person shall have the right to employ separate counsel (including local counsel), and the Guarantor shall bear the reasonable fees, costs and expenses of s uch separate counsel (and local counsel), if (i) the use of counsel chosen by the Guarantor to represent the Indemnified Person would present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the Indemnified Person and the Guarantor and the Indemnified Person shall have reasonably concluded that there may be legal defenses available to it and/or other Indemnified Persons which are different from or additional to those available to the Guarantor, (iii) the Guarantor shall not have employed counsel satisfactory to the Indemnified Person to represent the Indemnified Person within a
reasonable time after notice of the institution of such action or (iv) the Guarantor shall authorize the Indemnified Person to employ separate counsel at the expense of the Guarantor. The Guarantor will not, without the prior written consent of the Indemnified Persons, which should not be

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unreasonabl y withheld 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 ma y be sought hereunder (whether or not the Indemnified Persons are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each Indemnified Person from all liability arising out of such claim, action, suit or proceeding.
SECTION 7.3. Compensation; Reimbursement of Expenses.
Other than as provided in the Fee Agreement of e v en date herewith between Cohen Bros. & Company, the Guarantee Trustee and Delaware Trustee (as defined in the Declaration), the Guarantor agrees:
(a)to pa y 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 di s bursements of its agents and counsel), except any such expense, disbursement or advance as ma y be attributable to its negligence or willful misconduct.
The provisions of this Section 7.3 shall s urvive the resignation or removal of the Guarantee Trustee and the termination of this Guarantee.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Successors and Assigns.
Al l guarantees and agreements contained in this Guarantee shall bind t he successors, assigns, receivers, trustees and representatives of the Guarantor and sha ll inure t o the benefit of t h e Ho l ders of t h e Capita l Securities then outstanding. Exce p t in connection with any merger or conso li dati o n of the Guarantor with or into anothe r enti t y or any sale, transfer or l ease of t h e G u aranto r's assets or cap i ta l stoc k to another entity, in eac h case to th e extent p ermitte d unde r the Indenture, the Guarantor may not assign its rights or delegate its obligations under this Guarantee without t he prior approval of the Holders of not less than a Ma j ority in li q uidation amount of the Cap i tal Securities.
SECTION 8.2. Amendments.
Except with respec t to any changes tha t do no t adversely affect the rights of Ho l ders of the Capital Securities in any materia l respect (in which case no consent of Ho l ders wil l be re q uired), this G u aran t ee may be amended only with the prior ap p rova l of the Holders of no t l ess t h an a M a j ority i n liq u idation amount of the Capital Securities. The provisions of the Declaration with respect to amendments thereof shall app l y equa ll y with respect to amendments of the Guarantee.
SECTION 8.3. Notices.
All notices pr ovided for in this Guarantee shall be in writing, duly signed by the party giving such not i ce, an d sha ll be de l ivered, telecopied o r mailed by first class mai l, as foll o ws:

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(a) If given to the Guarantee Trustee, at the Guarantee Trustee's mai l ing a d dr ess set forth b e l ow (or such ot h er address as the G u arantee Trus t ee may give notice of t o the H ol d ers of t he Capital Securities):
JPMorgan Chase Bank, Nationa l Association
600 Travis Street, 50 th Floo r
H ouston, T exas 77002
Atte n tion: Worldwide Securities S erv i ces Central Banco rp Statutory Trust I Te l e c opy: (713) 216-2 1 0 1
Telep h one: (713) 216-418 1
(b) If given to the Guarantor, at the Guaran t or's mailing address set forth below (or such othe r address as the Guaran t or may give notice of to the Ho l ders of the Capi t al Securities an d to the Guarantee Trustee):
Central B ancorp, Inc.
4 555 W. Walnut Street
Garland, Texas 7 504 2
Attention: Keith Ward
Tel e copy: (9 7 2) 5 1 6-3680
Te l ephone: (972) 485-7201
(c) If given t o any Holder of the Capital Securities, at the addres s s et forth on the b ooks and records of the Issuer.
All such notices sha ll be deemed to ha v e been given wh e n recei v ed in person, te l ecopied w i th receipt confirme d, or mailed by first class mail, p o s tage prepaid, except that if a no t ice o r o ther document is r efused d e livery or cannot b e delivered because of a changed address of which no notice w as gi v en, such not i ce or other document s hall be d eemed t o ha v e been delivered on t he date of such refusa l or inability to deliver.
SECT I ON 8.4. B enefit.
This Guarantee is s olel y fo r the b e n efit of the Ho l ders of the Capital Securities and, s ubject to Section 2. l(a), i s not separatel y transferable from the Capita l Securities.
SECTION 8.5. Governing Law.
THIS GUARANTEE SHALL B E GOVERNE D BY, AND CONSTRUED IN ACC O RDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFL I CT OF LAWS P RINCIPLES THEREOF {OTHER THAN SECTION 5-1 4 01 OF THE GENERAL OBLIGATIONS LAW).
SECTION 8.6. Coun t erparts.
This Guarantee may contain more than one counterpart of the signature page and this Guarantee may be executed by the affixing of the signature of the Guarantor and the Guarantee Trustee to any of such counterpart signature pages. All of such counterpart signature pages shall be read as though one, and they shall have the same force and effect as though all of the signers had signed a single signature page.

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

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

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