S&P 500 COMPOSITE STOCK PRICE INDEX TM EQUITY-INDEXED CERTIFICATES OF DEPOSIT DISCLOSURE STATEMENT

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1 EICD #10 The information contained in this Disclosure Statement may not be modified by any oral representation made prior or subsequent to the purchase of your Certificate of Deposit S&P 500 COMPOSITE STOCK PRICE INDEX TM EQUITY-INDEXED CERTIFICATES OF DEPOSIT DISCLOSURE STATEMENT The certificates of deposit described below ( CDs ) are made available through RBC Dain Rauscher Inc. ( RBCDR ). Each CD is a deposit obligation of a depository institution domiciled in the U.S. or one of its territories (an Issuer ), the deposits and accounts of which are insured by the Federal Deposit Insurance Corporation (the FDIC ) within the limits described below. CDs may be acquired both from institutions upon issuance (the primary market ) and, to the extent available, in the secondary market. If purchased in the primary market, RBCDR will advise you of the date on which your CD will be established with the Issuer (the Settlement Date ). Please read with care the section headed Important Investment Considerations. Each CD is a time deposit that pays interest ( Index Interest ) based upon the percentage change in the level of the Standard & Poor's 500 Composite Stock Price Index TM (the Index ), measured over a specified period of time and subject to certain terms and conditions. The full amount of the deposit principal (the Deposit Amount ) will be returned to you at the end of the term in addition to any accrued Index Interest. Each CD may pay a minimum interest amount equal to a specified percentage of the amount of the deposit principal over the term of the CD (the Minimum Interest Amount ). BECAUSE OF THE NUMEROUS FACTORS THAT MAY AFFECT THE VALUE OF THE INDEX, YOU MAY NOT RECEIVE ANY INDEX INTEREST. IF THE CDs HAVE A MINIMUM INTEREST AMOUNT, YOU WILL RECEIVE AS INTEREST THE GREATER OF THE INDEX INTEREST AND THE MINIMUM INTEREST AMOUNT. IF THE CDs DO NOT HAVE A MINIMUM INTEREST AMOUNT, THE VALUE OF THE INDEX AT THE VALUATION DATES (AS DEFINED BELOW) TOGETHER WITH THE OTHER FEATURES OF THE CDs MAY RESULT IN YOU NOT RECEIVING ANY INDEX INTEREST EVEN THOUGH THE VALUE OF THE INDEX AT MATURITY OF THE CDs IS HIGHER THAN THE VALUE OF THE INDEX AT THE TIME OF ISSUANCE OF THE CDs. See the sections headed Terms of the CDs, Index Interest and The Index. The specific terms of the CDs, including any Minimum Interest Amount, will be set forth in a supplement to this Disclosure Statement (the Terms Supplement ) and in the trade confirmation. Index Interest will be calculated in each case using the closing Index level on a date that is on the date of pricing, a date which is on or prior to the date of establishment of the CD (the Initial Index Level ) and the closing Index level or levels on a specified date or dates set forth in the applicable Terms Supplement (the Valuation Dates ). If a Market Disruption Event (as defined below) occurs on the last scheduled Valuation Day (which shall also be the maturity date of the CD set forth in the Terms Supplement and the trade confirmation (the Maturity Date ), the Maturity Date will be postponed. See the section headed Market Disruption Event. RBCDR will advise you of the names of the Issuers, the Initial Index Level date, the Valuation Dates and the Maturity Date of the CDs which are currently available through RBCDR, and, if your CD is purchased in the primary market, the Settlement Date. See the section headed Terms of CDs. While the performance of the Index will be used to determine the amount of Index Interest, if any, paid on each CD, purchasers of a CD will not own an interest in the underlying securities comprising the Index. Most U.S. holders of the CDs, other than those purchasing the CDs through a tax advantaged retirement account (such as an IRA), are subject to tax rules requiring them to include in their taxable income during each tax year in which the CDs are outstanding imputed interest income on the CDs even though no interest, if any, will be paid on the CDs until maturity. See the section headed Federal Income Tax Consequences.

2 In making a decision to purchase a CD, depositors must rely on their own examination of the Issuer and the terms of the CDs, including the merits and risks involved. The CDs are direct financial obligations of the Issuer and are not obligations of RBCDR. Upon request, you will be provided with financial information concerning the Issuer of a CD that you would receive upon request if you established a deposit account directly with the Issuer. RBCDR does not guarantee in any way the financial condition of any Issuer or the accuracy of any financial information provided by an Issuer. Early Withdrawal The CDs will not be subject to early withdrawal unless otherwise indicated in the Terms Supplement. If the applicable Terms Supplement does not indicate that there is a right of early withdrawal, each CD must either be held to maturity or sold in the secondary market, if such market is available. See the sections headed Additions and Withdrawals and Secondary Market. Deposit Insurance Since the Index Interest is calculated, in part, using the closing Index level on the last Valuation Date, Index Interest, if any, will not accrue to a holder of a CD until the Maturity Date. Accordingly, any potential Index Interest will not be eligible for federal deposit insurance prior to the Maturity Date. Index Interest will be eligible for deposit insurance coverage only from the Maturity Date until the Issuer makes payment of the Deposit Amount and Index Interest, if any. The Minimum Interest Amount, if any, accrued to the date the Issuer is closed, is eligible for federal deposit insurance. The extent of, and limitations on, federal deposit insurance are discussed below in the sections headed Deposit Insurance and Deposit Insurance for CDs Purchased by Retirement Plans and Accounts. Information on Issuers In making an investment decision investors must rely on their own examination of the Issuer and the terms of the offering, including the merits and risks involved. Upon request, you will be provided with the same financial information regarding the Issuer that you would receive upon request if you had established a deposit account directly with such Issuer. RBCDR does not guarantee in any way the financial condition of any Issuer. Terms of CDs The terms of each CD are available from RBCDR and are specified in the Terms Supplement and the trade confirmation. Unless otherwise specified in the Terms Supplement, the CDs are made available in minimum denominations and increments of $1,000 up to $100,000 in the aggregate per depositor per Issuer. You should review carefully the Terms Supplement and the trade confirmation for a description of the terms of the CD. You should also review the investment considerations discussed below in the section headed Important Investment Considerations. The term of any CD will commence on the date specified in the Terms Supplement and the trade confirmation. The CDs will mature on the Maturity Date. If, however, a Market Disruption Event occurs on such last Valuation Date, the Maturity Date will be postponed. See the section headed Market Disruption Event. The date used to determine the Initial Index Level and the Valuation Dates will be specified in the Terms Supplement. The CDs will not be automatically renewed or rolled over and Index Interest, if any, on the CDs will not accrue after the Maturity Date. The CD balances will be remitted by the Issuer and credited to your account with RBCDR on the Maturity Date or the postponed Maturity Date, as the case may be. A Business Day is any day other than a Saturday, Sunday, legal holiday or day on which banking or savings institutions are required or 2

3 authorized by law or regulation to close in New York City or the city and state of the Issuer's principal place of business. Index Interest The Index Interest payable on each CD will be determined by the Issuer or, if a Calculation Agent is named in the applicable Terms Supplement, the Calculation Agent. Unless otherwise specified in the Terms Supplement, the interest payable on each CD will be the greater of the Index Interest as described in the Terms Supplement or the Minimum Interest Amount, if any. Index Interest or the Minimum Interest Amount, if any, will be payable on the Maturity Date. The specific method of calculating Index Interest will be set forth in the Terms Supplement. While the performance of the Index will be used to determine the amount of Index Interest, if any, paid on each CD, purchasers of a CD will not own or be entitled to an interest in the underlying securities comprising the Index. The appreciation of the Index, if any, does not reflect the payment of dividends on the stocks underlying the Index. Therefore, the yield to maturity over that period of time will not be the same yield as would be produced if such underlying stocks were purchased and held for a similar period. You should compare the Index Interest feature and other features of the CDs to other available investments before deciding to purchase a CD. The rate of return ultimately realized on the CDs may be higher or lower than the rates on other deposits available through the Issuer or RBCDR. Index Interest, if any, and payment of the Deposit Amount are automatically credited to your account with RBCDR. THE ISSUER'S OBLIGATION TO PAY INTEREST DEPENDS ON THE PERCENTAGE INCREASE OF THE INDEX. THERE IS NO ASSURANCE THAT THE INDEX INTEREST WILL BE GREATER THAN THE MINIMUM INTEREST AMOUNT, IF ANY. IF THE CDs DO NOT HAVE A MINIMUM INTEREST AMOUNT, THERE IS NO ASSURANCE THAT YOU WILL RECEIVE ANY INDEX INTEREST, EVEN IF THERE IS A POSITIVE PERCENTAGE CHANGE BETWEEN THE VALUE OF THE INDEX AT THE TIME OF ISSUANCE AND THE MATURITY DATE OF THE CDs. Market Disruption Event Unless otherwise specified in the applicable Terms Supplement, if there is a Market Disruption Event, as defined below, on a Valuation Date, then the closing Index level on the first succeeding Business Day on which there is no Market Disruption Event shall be used in the Index Interest calculations. If any of the scheduled Valuation Dates is not a Business Day or if a Market Disruption Event occurs on any such date, such Valuation Date (including the last scheduled Valuation Date) will be the immediately succeeding Business Day during which no Market Disruption Event shall have occurred: provided that if a Market Disruption Event has occurred on each of the five Business Days immediately succeeding any scheduled Valuation Dates (including the last scheduled Valuation Date), then (i) such fifth succeeding Business Day will be deemed to be the relevant Valuation Date, notwithstanding the occurrence of a Market Disruption Event on such a day and (ii) with respect to any such fifth Business Day on which a Market Disruption Event occurs, the Issuer or, if a Calculation Agent is named in the Terms Supplement, the Calculation Agent, will determine the level of the Index on such fifth Business Day in accordance with the formula for and method of calculating the Index last in effect prior to the commencement of the Market Disruption Event, using the closing price (or, if trading in the relevant securities has been materially suspended or materially limited, its good faith estimate of the closing price that would have prevailed but for such suspension or limitation) on such Business Day of each security most recently comprising the Index. If a Market Disruption Event occurs on the last Valuation Date (which is also the Maturity Date), the Maturity Date of the CD will be postponed for no more than five Business Days after the scheduled Maturity Date and payment shall be made on the Business Day next succeeding such postponed Maturity Date. 3

4 A Market Disruption Event shall mean any event, circumstance or cause (whether or not reasonably foreseeable) beyond the control of an Issuer that in the opinion of that Issuer or, if a Calculation Agent is named in the applicable Terms Supplement, the Calculation Agent may materially and adversely affect the trading of securities, futures, options or exchange-traded funds on the relevant exchanges, including a suspension or material limitation imposed on trading on the New York Stork Exchange, the American Stock Exchange, or NASDAQ National Market System in securities that comprise the Index. The Index The Index levels used in calculating the Index Interest will be the closing Index level published in the Eastern Edition of The Wall Street Journal on the Business Day following the date of pricing, a date which is on or prior to the date of establishment of the CD, and each Valuation Date. If, due to a misprint, there is a difference between the Index as determined by Standard & Poor's Corporation ( S&P ) and the Index as published the next Business Day in The Wall Street Journal, then the Index as determined by S&P shall be the Index used in calculating the Index Interest. If publication of the Index is discontinued or its method of calculation is modified (other than by a change in the stocks comprising the Index), or if the information necessary to perform the calculation of the Index is not available and a successor or substitute index that the Issuer in its sole discretion determines to be comparable to the Index (the Substitute Index ) is published, then the Issuer or, if a Calculation Agent is named in the applicable Terms Supplement, the Calculation Agent, shall use the Substitute Index on the Valuation Date to calculate the Index Interest. Unless otherwise specified in the applicable Terms Supplement, if no Substitute Index is available on a Valuation Date, the Issuer shall calculate a value for the Index using the method set forth under the heading Market Disruption Event. The CDs are not sponsored, endorsed, sold or promoted by S&P. S&P makes no representation or warranty, express or implied, to any holder of the CDs or any member of the public regarding the advisability of investing in securities generally or in the CDs particularly or the ability of the Index to track general stock market performance. S&P's only relationship to the Issuer is the licensing of certain trademarks and trade names of S&P and of the Index, which is determined, composed and calculated by S&P without regard to the Issuer or the CDs. S&P has no obligation to take the needs of the Issuer or of the holders of the CDs into consideration in determining, composing or calculating the Index. S&P is not responsible for and has not participated in the determination of the timing, prices or quantities of the CDs to be issued or in the determination or calculation of the equation by which the CDs are to be converted into cash. S&P has no obligation or liability in connection with the administration, marketing or trading of the CDs. S&P DOES NOT GUARANTEE THE ACCURACY AND/OR COMPLETENESS OF THE INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE ISSUER, HOLDERS OF THE CDs, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED UNDER THE LICENSE AGREEMENT DESCRIBED HEREIN OR FOR ANY OTHER USE. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES. "Standard & Poor's ", "S&P, "Standard & Poor's 500" and "500" are trademarks of McGraw-Hill, Inc. and have been licensed for use by the Issuer, or an affiliate or subsidiary thereof. All disclosures contained in this document regarding the Index, including its make-up, method of calculation, changes in its components and historical information, are derived from publicly available information and the Issuer does not assume any responsibility for the accuracy or completeness of such information. 4

5 The following graph shows the historical performance of the Index from December 1969 through mid-april The information below does not represent any CDs offered during the periods shown nor is it intended to represent what you might earn on your CDs. Rather, the graph is for historical information purposes only and should not be used or interpreted as a forecast or indication of the future performance of the Index or the Index Interest, if any, you will earn by owning a CD S&P 500 Composite Index Since December 1969 SPX I d PREV SES LAST PRICE Dec 1969 Dec 1972 Dec 1975 Dec 1978 Dec 1981 Dec 1984 Dec 1987 Dec 1990 Dec 1993 Dec 1996 Dec 1999 Dec 2002 Your Relationship with RBCDR and the Issuer The CDs are evidenced by one or more master certificates issued by the Issuer, each representing a number of individual CDs. These master certificates are held by The Depository Trust Company ("DTC"), a subcustodian which is in the business of performing such custodial services. No evidence of ownership, such as a passbook or a certificate, will be provided to you. RBCDR, as custodian, keeps records of the ownership of each CD and will provide you with a written confirmation of your purchase. You will also be provided with an account statement which will reflect your CD ownership. You should retain the confirmation and the account statement(s) for your records. Because you will not be provided with a certificate evidencing your CD, the purchase of a CD is not recommended if you wish to take possession of a certificate. Your account statement from RBCDR may provide an estimate of the price you might receive on some or all of your CDs if you were able to sell them prior to maturity. Any prices on your statement are estimates and are not based on actual market prices. You should ask RBCDR to explain its statement pricing policies. Your deposit insurance coverage will be determined based on the outstanding principal amount of your CD, not the estimated price. See the section headed Deposit Insurance and Secondary Market. Each CD constitutes a direct obligation of the Issuer and is not, either directly or indirectly, an obligation of RBCDR. No deposit relationship shall be deemed to exist prior to the receipt and acceptance of your funds by the Issuer. If you choose to remove RBCDR as your agent with respect to your CD, you may (i) transfer your CD to another agent (provided that the agent is a member of DTC (most major brokerage firms are members; many banks and savings institutions are not)); or (ii) request that your ownership of the CD be evidenced directly on the 5

6 books of the Issuer, subject to applicable law and the Issuer's terms and conditions, including those related to the manner of evidencing CD ownership. If you choose to remove RBCDR as your agent, RBCDR will have no further responsibility for crediting your account with payments made with respect to your CD. If you establish your CD directly on the books of the Issuer you will have the ability to enforce your rights in the CD directly against the Issuer. Important Investment Considerations Limited Early Withdrawal. You will not have the right to withdraw your CD prior to maturity unless otherwise indicated in the applicable Terms Supplement. If the applicable Terms Supplement indicates that the CD is subject to early withdrawal, such withdrawal may include a substantial penalty. Even if early withdrawal is available, the CDs are long term instruments and are most suitable for purchasing and holding to maturity. If you wish to dispose of your CD in the secondary market prior to the Maturity Date, you should read with special care the section headed Additions and Withdrawals and the subsection headed Secondary Market below. Secondary Market. RBCDR or one of its affiliates, though not obligated to do so, may maintain a secondary market in the CDs after the Settlement Date. The minimum unit of trading will be one CD ($l,000 principal amount). If RBCDR or an affiliate maintains such a secondary market, they may at any time discontinue or recommence once discontinued their participation in secondary market transactions. RBCDR or an affiliate may also designate the days on which they maintain a secondary market. RBCDR and its affiliates may purchase or sell the CDs for their own account as well as for the account of customers and, therefore, may realize profits from trades conducted as principal. Because the rate of return on the CD is tied to the performance of a stock index, the secondary market for the CD may not be as liquid as the secondary market for a CD with a fixed rate of return. YOU SHOULD NOT RELY ON THE POSSIBLE EXISTENCE OF A SECONDARY MARKET FOR ANY BENEFITS, INCLUDING LIQUIDITY OF YOUR INVESTMENT, ACHIEVING TRADING PROFITS, LIMITING TRADING OR OTHER LOSSES OR REALIZING INCOME PRIOR TO THE MATURITY DATE. IF A SECONDARY MARKET EXISTS, YOU SHOULD NOT EXPECT ANY PRICES FOR THE CDs SOLD IN THE SECONDARY MARKET TO TRACK SHORT TERM MOVEMENTS OF THE INDEX. CDs MAY NOT BE SUITABLE FOR SOME INVESTORS. If you wish to sell your CD prior to maturity and neither RBCDR nor an affiliate maintains a secondary market, RBCDR may attempt to sell your CD in a secondary market maintained by another broker-dealer. Alternatively, you may attempt to sell your CD by transferring your CD and your account with RBCDR to another broker-dealer who may maintain a secondary market in which you can sell your CD. RBCDR or its affiliates cannot provide assurance that you will be able to sell your CD prior to maturity. In the event that a buyer is available at a time you attempt to sell your CD prior to its maturity, the price at which your CD is sold may result in a return to you which may differ from the yield which the CD would have earned had it been held to maturity, since the selling price for a CD in such circumstances will likely be based on a number of factors such as the denomination of the CD, changes in the Index, time remaining until maturity, the Issuer's creditworthiness and other market conditions. In addition, the price at which a CD is sold in the secondary market will reflect a dealer spread, which is the compensation to RBCDR for arranging the sale or purchase of your CD. Therefore, if you sell your CD in the secondary market, the price you receive will be less than the price at which RBCDR can, or believes it can, re-sell your CD to a buyer. Similarly, the price you may pay for any CD purchased in the secondary market will generally be more than the price RBCDR paid a seller for the CD. In the event you choose to sell a CD in the secondary market, you may receive less in sale proceeds than the original principal (par) amount of the CD. In the event that a CD is purchased in the secondary market at a premium over the principal amount, the premium is not insured. Therefore, if deposit insurance payments become necessary for the Issuer, the owner of a CD purchased in the secondary market can incur a loss of up to the amount of the premium paid for the CD. Also see the section headed Deposit Insurance. Index Interest. If you hold the CDs to maturity you will receive Index Interest based upon the value of the percentage change in the level of the Index, measured over a specified period of time and subject to certain terms and conditions, as specified in the Terms Supplement. Each CD may pay the Minimum Interest 6

7 Amount, if any, or the Index Interest, whichever is greater, if specified in the Terms Supplement. There is no assurance that the Index Interest on your CDs will be greater than the Minimum Interest Amount, if any. Deposit Insurance on Index Interest and Minimum Interest Amount. Since the Index Interest is calculated, in part, using the closing Index level on the last Valuation Date, Index Interest, if any, cannot be determined until the last Valuation Date. Accordingly, any potential Index Interest will not be eligible for federal deposit insurance prior to the last Valuation Date. However, the Minimum Interest Amount, if any, accrued to the date the Issuer is closed, is eligible for federal deposit insurance. Index Interest will be eligible for federal deposit insurance coverage only from the last Valuation Date until the Issuer makes payment of the Deposit Amount and Index Interest, if any. After the last Valuation Date, the greater of the Index Interest or the Minimum Interest Amount, if any, will be eligible for federal deposit insurance. The extent of, and limitations on, federal deposit insurance are discussed below in the sections headed Deposit Insurance and Deposit Insurance for CDs Purchased by Retirement Plans and Accounts. CD Yield. The Index Interest may not be greater than the Minimum Interest Amount, if any. The return of the Deposit Amount of each CD and the Minimum Interest Amount, if any, at maturity may not compensate the holder for any opportunity cost implied by inflation and other factors relating to the time value of money. The appreciation of the Index, if any, does not reflect the payment of dividends on the stocks underlying the Index. Therefore, the yield to maturity over that period of time will not be the same yield as would be produced if such underlying stocks were purchased and held for a similar period. Postponement of Maturity Date. If there is a Market Disruption Event on the last scheduled Valuation Date (which is also the scheduled Maturity Date), the Maturity Date of the CD will be postponed. This postponement in no way alters your right to otherwise receive payment on the postponed Maturity Date. See the section headed Market Disruption Event. Factors Affecting the Index. The yield on the CDs will depend upon the performance of the Index. The historical Index levels should not be taken as an indication of the future performance of the Index during the term of the CD. While the trading prices of the stocks underlying the Index will determine the level of the Index, it is impossible to predict whether the level of the Index will rise or fall. Trading prices of the stocks underlying the Index will be influenced by both the complex and interrelated political, economic, financial and other factors that can affect the capital markets generally and the equity trading markets on which the underlying stocks are traded, and by various circumstances that can influence the values of the underlying stocks in a specific market segment or a particular underlying stock. As a result, you or your advisor should be familiar with the Index and with investments in the equity securities markets generally. You should also understand how payments will be calculated at maturity. Tax Considerations. Most U.S. holders of the CDs, other than those purchasing the CDs through a tax advantaged retirement account (such as an IRA), are subject to tax rules requiring them to include in their taxable income during each tax year in which the CDs are outstanding imputed interest income on the CDs even though they will not receive any payments of interest on the CDs, if any, until maturity and at maturity may only receive the return of the Deposit Amount. Accordingly, you should be prepared to pay taxes on the imputed interest income during each tax year. See the section headed Federal Income Tax Consequences. Insolvency of the Issuer. In the event the Issuer approaches insolvency or becomes insolvent, the Issuer may be placed in regulatory conservatorship or receivership with the FDIC typically appointed as the conservator or receiver. The FDIC may thereafter pay off the CDs prior to maturity or transfer the CDs to another institution. If the CDs are transferred to another depository institution, you may be offered a choice of retaining the CDs at a lower interest rate or having the CDs paid off. See the section headed Payments Under Adverse Circumstances. Reinvestment Risk. If the CD is paid off prior to maturity as a result of the Issuer s insolvency or a voluntary early withdrawal (see Additions or Withdrawals ), you may be unable to reinvest your funds at the same 7

8 rate as the original CD. RBCDR is not responsible to you for any losses you may incur as a result of a lower interest rate on an investment replacing your CD. Considerable Discretion by the Issuer and Calculation Agent. The Issuer, or if a Calculation Agent is named in the applicable Terms Supplement, the Calculation Agent, has considerable discretion in determining whether a Market Disruption Event has occurred with respect to the Index, in selecting a Substitute Index, in calculating an index that is comparable to the Index, in selecting an alternative means of measuring the Initial Index Level or Index level of the Index, and in determining any early withdrawal amount. The exercise of this discretion by the Issuer, or if a Calculation Agent is named in the applicable Terms Supplement, the Calculation Agent, could reduce the Index Interest payable on the CDs at maturity or upon early withdrawal. SEC Investor Tips. The Securities and Exchange Commission periodically publishes tips for investors in various financial products, including CDs, on its website. You may access these investor tips at Deposit Insurance Your CDs are insured by the FDIC, an independent agency of the U.S. Government, to a maximum amount of $100,000 (including principal and interest) for all deposits held in the same capacity per depository institution. Generally, any accounts or deposits that you may maintain directly with a particular Issuer, or through any other intermediary in the same capacity in which the CDs are maintained, would be aggregated with the CDs for purposes of the $100,000 limit. In the event an Issuer fails, CDs are insured, up to the $100,000 limit, for principal and interest accrued, if any, to the date the Issuer is closed. Under certain circumstances, if you become the owner of CDs or other deposits at a depository institution because another depositor dies, beginning six months after the death of the depositor the FDIC will aggregate those deposits for purposes of the $100,000 limit with any other CDs or deposits that you own in the same capacity at the depository institution. Examples of accounts that may be subject to this FDIC policy include joint accounts, "payable on death" accounts and certain trust accounts. The FDIC provides the six month "grace period" to permit you to restructure your deposits to obtain the maximum amount of deposit insurance for which you are eligible. If subsequent to the issuance of the CDs, the CDs are not eligible for federal deposit insurance due to a determination by the FDIC or an act of the Issuer, the Issuer will redeem such CDs. The redemption shall take place within ten (10) Business Days of such event. For purposes of determining the Index Interest pursuant to such redemption, the final Valuation Date shall be the redemption date and all Valuation Dates occurring after the redemption date shall not be included in the Index Interest calculations. The FDIC has taken the position that contingent interest, such as the Index Interest on the CDs, does not accrue until the contingency has been removed. As a result no Index Interest on the CDs will accrue until the final Valuation Date (which is also the Maturity Date). If the Issuer fails before the final Valuation Date (the Maturity Date), the Index Interest will not have accrued and will therefore not be insured. The Minimum Interest Amount, if any, accrued to the date the Issuer is closed, is eligible for federal deposit insurance. You are responsible for monitoring the total amount of deposits that you hold in one depository institution in order for you to determine the extent of insurance coverage available to you on your deposits, including the CDs. RBCDR is not responsible for any insured or uninsured portion of the CDs or any other deposits. BY YOUR PURCHASE OF A CD YOU ARE DEEMED TO REPRESENT TO THE ISSUER AND RBCDR THAT TO THE BEST OF YOUR KNOWLEDGE YOUR DEPOSITS WITH THE ISSUER (OR IF YOU ARE ACTING AS A CUSTODIAN, THE DEPOSITS OF THE BENEFICIARIES), INCLUDING THE CD, WHEN AGGREGATED IN ACCORDANCE WITH FDIC REGULATIONS, ARE WITHIN THE APPLICABLE DEPOSIT INSURANCE LIMITS. 8

9 If your CDs or other deposits at the Issuer are assumed by another depository institution pursuant to a merger or consolidation, such CDs or deposits will continue to be separately insured from the deposits that you might have established with the acquiror until (i) the maturity date of the CDs or other time deposits which were assumed, or (ii) with respect to deposits which are not time deposits, the expiration of a six month period from the date of the acquisition. Thereafter, any assumed deposits will be aggregated with your existing deposits, including your CDs, with the acquiror held in the same capacity for purposes of federal deposit insurance. Any deposit opened at the acquired institution after the acquisition will be aggregated with deposits established with the acquiror for purposes of federal deposit insurance. In the event that a CD is purchased in the secondary market at a premium over the par amount, that premium is not insured. Similarly, you are not insured for any premium reflected in the estimated market value of your CD on your account statement. If deposit insurance payments become necessary for the Issuer, you will not be paid the premium you paid for your CD and will not receive any premium shown on your account statement. See the section headed Secondary Market. For the avoidance of doubt, only the face amount of your CD is insured by the FDIC. The application of the $100,000 federal deposit insurance limitation is illustrated by several common factual situations discussed below. Individual Customer Accounts. Funds owned by an individual and held in an amount in the name of an agent or nominee of such individual (such as the CDs held in your account with RBCDR) are not treated as owned by the agent or nominee, but are added to other deposits of such individual held in the same capacity (including funds held in a sole proprietorship) and are insured up to $100,000 in the aggregate. Custodial Accounts. Funds in accounts held by a custodian (for example, under the Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act) are not treated as owned by the custodian, but are added to other deposits of the minor or other beneficiary held in the same capacity and are insured up to $100,000 in the aggregate. Corporate, Partnership and Unincorporated Association Accounts. Funds in accounts owned by corporations (including Subchapter S corporations), partnerships and unincorporated associations, operated for a purpose other than to increase deposit insurance, are added together with other deposits owned by such corporation, partnership and unincorporated association, respectively, and are insured up to $100,000 in the aggregate. Joint Accounts. An individual s interest in funds in all accounts held under any form of joint ownership valid under applicable state law may be insured up to $100,000 in the aggregate, separately and in addition to the $100,000 allowed on other deposits individually owned by any of the co-owners of such accounts (hereinafter referred to as a Joint Account ). For example, a Joint Account owned by two persons would be eligible for insurance coverage of up to $200,000 ($100,000 for each person), subject to aggregation with each owner s interests in other Joint Accounts at the same depository institution. Joint Accounts will be insured separately from individually owned accounts only if each of the co-owners is an individual person and has a right of withdrawal on the same basis as the other co-owners. Revocable Trust Accounts: General Rule. Funds held in an account in which the owner evidences an intent that at his or her death the funds shall belong to one or more individuals (frequently referred to as a Totten trust account, payable upon death account or other type of revocable trust account (as determined under applicable state law)) will be aggregated for deposit insurance purposes with any other funds of the owner held in an individual capacity at the Issuer and will be insured up to a maximum of $100,000. Special Rule. Revocable trust accounts will be insured as to each named beneficiary, separately from another account of the owner or the beneficiary, provided that: (i) RBCDR s account records evidence an intention that upon the death of the owner the funds will belong to the owner s spouse, or to one or more 9

10 parents, siblings, children or grandchildren and (ii) the beneficiaries of the revocable trust are specifically named in RBCDR s account records. However, a revocable trust account established by a husband and wife that names the husband and wife as sole beneficiaries will be treated as a joint account and will be aggregated with other joint accounts subject to the rules described above under Joint Accounts. Irrevocable Trust Accounts. Funds in an account established pursuant to one or more irrevocable trust agreements created by the same grantor (as determined under applicable state law) will be insured for up to $100,000 for the interest of each beneficiary provided that the beneficiary's interest in the account is non-contingent (i.e., capable of determination without evaluation of contingencies). The deposit insurance of each beneficiary's interest is separate from the coverage provided for other accounts maintained by the beneficiary, the grantor, the trustee or other beneficiaries. The interest of a beneficiary in irrevocable trust accounts at an insured depository institution created by the same grantor will be aggregated and insured up to $100,000. Deposit Insurance for CDs Purchased by Retirement Plans and Accounts Retirement Plans and Accounts Generally. You may have interests in various retirement plans and accounts that are holding the CDs of one depository institution. The amount of deposit insurance you will be entitled to, including whether CDs held by the plan or account will be considered separately or aggregated with the CDs of the same depositary institution held by other plans or accounts, will vary depending on the type of plan or account. It is therefore important to understand the type of plan or account holding the CD. The following sections entitled Individual Retirement Accounts, Pass-Through Deposit Insurance for Employee Benefit Plan Deposits and Aggregation of Retirement Plan and Account Deposits generally discuss the rules that apply to deposits of retirement plans and accounts. Individual Retirement Accounts. CDs held in an individual retirement account (an IRA ) are insured up to $100,000 per depository institution. However, the CDs of one Issuer acquired by an IRA will be aggregated with the CDs of the same Issuer held by certain employee benefit plans in which the owner of the IRA has an interest. See Aggregation of Retirement Plan and Account Deposits. Thus, the owner of an IRA will only be entitled to insurance of $100,000 for CDs of the same depository institution held in plans and accounts that are subject to aggregation. Pass-Through Deposit Insurance for Employee Benefit Plan Deposits. Subject to the limitations discussed below, under FDIC regulations an individual's non-contingent interests of up to $100,000 in the deposits of one depositary institution held by many types of plans are eligible for insurance on a "pass-through" basis. This means that instead of an employee benefit plan's deposits at one depository institution being entitled to only $100,000 of insurance in total per institution, each participant in the employee benefit plan is entitled to insurance of his or her interest in the employee benefit plan's deposits of up to $100,000 per institution (subject to the aggregation of the participant's interests in different plans, as discussed below). The pass-through insurance provided to an individual as an employee benefit plan participant is in addition to the $100,000 per depository institution allowed on other deposits held by an individual in the Issuer. A deposit held by an employee benefit plan that is eligible for pass-through insurance is not insured for an amount equal to the number of plan participants multiplied by $100,000. For example, an employee benefit plan owns $200,000 in CDs at one institution. The employee benefit plan has two participants, one with a vested non-contingent interest of $170,000 and one with a vested non-contingent interest of $30,000. In this case, the employee benefit plan's deposit would be insured up to only $130,000; the individual with the $170,000 interest would be insured up to the $100,000 limit and the individual with the $30,000 interest would be insured up to the full value of such interest. The contingent interests of employees in an employee benefit plan and overfunded amounts attributed to any employee benefit plan are not insured on a pass-through basis. Contingent interests of an employee in an employee benefit plan deposit are interests that are not capable of evaluation in accordance with FDIC rules, and are aggregated and insured up to $100,000. Similarly, overfunded amounts are insured, in the aggregate for all participants, up to $100,000 separately from the insurance provided for any other funds owned by or attributable to the employer or an employee benefit plan participant. 10

11 Under federal law, whether an employee benefit plan deposit is entitled to pass-through deposit insurance coverage is based, in part, on (i) the type of employee benefit plan involved and (ii) the capital status of the insured institution at the time each deposit is made. These factors are discussed in detail below. Types of Employee Benefit Plans. The types of plans for which deposits may receive pass-through treatment are employee benefit plans, as defined in section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ( ERISA ) (including Keogh Plans of owner-employees described in section 401(d) of the Internal Revenue Code of 1986, as amended, whether or not they are technically employee benefit plans under ERISA) ( ERISA Plans ) and deferred compensation plans for certain employees of state or local governments or tax-exempt organizations ( Section 457 Plans ). (Collectively, ERISA Plans and Section 457 Plans are referred to as Plans. ) An ERISA Plan eligible for pass-through treatment includes a tax-qualified pension, profit-sharing or stock bonus plan, a governmental plan or a church plan. Capital Status of the Issuing Depository Institution. Pass-through coverage is not provided if, at the time a Plan deposit is accepted by a depository institution, the institution may not accept brokered deposits (i.e., deposits placed by an intermediary such as RBCDR) under the applicable provisions of FDIC regulations. In general, whether an Issuer may accept brokered deposits depends, in turn, upon the Issuer s capital level. The federal banking regulators have established categories to reflect an institution's capital level. If an Issuer s capital category is either: well capitalized, or is adequately capitalized and the Issuer has received the necessary brokered deposit waiver from the FDIC, then the Issuer may accept brokered deposits. If an Issuer is either adequately capitalized without a waiver from the FDIC or is in a capital category below adequately capitalized, then the Issuer may not accept brokered deposits. FDIC regulations provide an exception from this general rule on the availability of pass-through insurance coverage for employee benefit plan deposits when, although an institution is not permitted to accept brokered deposits, the institution is adequately capitalized and the depositor receives a written statement from the institution indicating that such deposits are eligible for insurance coverage on a pass-through basis. Written Statement. FDIC regulations require a depository institution to provide to persons administering or managing a Plan a written statement that includes both the institution's capital category and a representation regarding the availability of pass-through deposit insurance. The broker-dealer that has arranged with RBCDR to offer the CDs will obtain the written statement from each Issuer at the time the deposit is made. In the event that an Issuer fails, the FDIC could elect to deny pass-through deposit insurance for Plan deposits if the representations of an Issuer were false at the time the Plan deposit was made. If the requirements for pass-through deposit insurance are not met, coverage will be limited to $100,000 per Plan, rather than per Plan participant. If a denial of pass-through treatment would be significant for a Plan, the Plan may wish to limit its deposits in one depository institution to $100,000. Aggregation of Retirement Plan and Account Deposits. Under FDIC regulations, an individual's interests in Plans maintained by the same employer or employee organization (e.g., a union) which are holding deposits at the same institution will be insured for $100,000 in the aggregate. In addition, under FDIC regulations an individual's interest in the CDs of one depository institution held by (i) IRAs, (ii) Section 457 Plans, (iii) self-directed Keogh Plans and (iv) self-directed defined contribution plans that are acquired by these plans and accounts will be insured for $100,000 in the aggregate whether or not maintained by the same employer or employee organization. Questions About FDIC Insurance Coverage If you have questions about how your CDs will be insured, please contact RBCDR. You may wish to seek advice from your own attorney concerning FDIC Insurance coverage of deposits held in more than one capacity. You may also obtain information by contacting the FDIC, Office of Consumer Affairs, by letter ( th Street, N.W., Washington, D.C ), by phone ( , (TDD) or ) or by e- mail (dcainternet@fdic.gov) or by visiting the FDIC website at 11

12 Payments Under Adverse Circumstances As with all deposits, if it becomes necessary for federal deposit insurance payments to be made on the CDs, there is no specific time period during which the FDIC must make insurance payments available. Accordingly, you should be prepared for the possibility of an indeterminate delay in obtaining insurance payments. As explained above, the maximum $100,000 deposit insurance coverage applies to the principal and accrued interest as of the Maturity Date, if any, on all CDs and other deposit accounts maintained by you at the Issuer in the same capacity. The records maintained by the Issuer and RBCDR regarding ownership of CDs would be used to establish your eligibility for federal deposit insurance payments. In addition, you may be required to provide certain documentation to the FDIC and to RBCDR before insurance payments are released to you. For example, if you hold CDs as trustee for the benefit of trust participants, you may also be required to furnish an affidavit to that effect; you may be required to furnish other affidavits and provide indemnities regarding an insurance payment. In the event that insurance payments become necessary for your CDs, the FDIC is required to pay the original par amount plus accrued interest to the date of the closing of the relevant Issuer, as prescribed by law, and subject to the $100,000 limitation. No interest is earned on deposits from the time an Issuer is closed until insurance payments are received. As an alternative to a direct deposit insurance payment from the FDIC, the FDIC may transfer the insured deposits of an insolvent institution to a healthy institution. Subject to insurance verification requirements and the limits on deposit insurance coverage, the healthy institution may assume the CDs under the original terms or offer you a choice between paying the CD off and maintaining the deposit at a different rate. RBCDR will advise you of your options in the event of a deposit transfer. RBCDR will not be obligated to you for amounts not covered by deposit insurance nor will RBCDR be obligated to make any payments to you in satisfaction of a loss you might incur as a result of (i) a delay in insurance payouts applicable to your CD, or (ii) your receipt of a decreased interest rate on an investment replacing your CD as a result of the payment of the principal and accrued interest on a CD prior to its scheduled maturity, or (iii) payment in cash of the principal and accrued interest on your CDs prior to maturity in connection with the liquidation of an insured Issuer or the assumption of all or a portion of its deposit liabilities. In connection with the latter, the amount of a payment on a CD which had been purchased at a premium in the secondary market is based on the original par amount and not on any premium amount. Therefore, you can lose up to the full amount of the premium as a result of such a payment. Also, RBCDR will not be obligated to credit your account with funds in advance of payments received from the FDIC. Additions or Withdrawals No additions are permitted to be made to any CD. When you purchase a CD, you agree with the Issuer to keep your funds on deposit for the term of the CD. Accordingly, no early withdrawals of CDs will be available except as set forth in the applicable Terms Supplement and you should therefore not rely on the possibility of gaining access to your funds prior to maturity. otherwise. The CDs will not be subject to early withdrawal unless the applicable Terms Supplement indicates Pursuant to the Internal Revenue Code, the beneficiary of an IRA (but not a Roth IRA) must begin making withdrawals from the IRA after age 70-1/2. CDs held in an IRA are not eligible for early withdrawal simply because the beneficiary must begin making mandatory withdrawals from the IRA. IRA beneficiaries should purchase CDs with maturities that correspond to the mandatory withdrawal requirements or look to the secondary market for liquidity. See the Section headed Secondary Market. The early withdrawal provisions, if any, applicable to your CDs may be more or less advantageous than the provisions applicable to other deposits available from the Issuer. In the event that a customer wishes to 12