Notice of Order of Conservation of QUADS Trust Company

STATE OF MAINE
DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION
BUREAU OF FINANCIAL INSTITUIONS

NOTICE OF ORDER OF CONSERVATION OF QUADS TRUST COMPANY

Pursuant to Title 9-B M.R.S.A. Section 363-A, the Superintendent of the Maine Bureau of Financial Institutions, Lloyd P. LaFountain III, (Superintendent) issued an Order of Conservation (Order) for QUADS Trust Company (QTC) located at 12 West Church Street, Frederick, Maryland, a wholly-owned subsidiary of QUADS Financial Group, Inc. (QFG), a Delaware corporation also located at 12 West Church Street, Frederick, Maryland, effective 5PM on January 31, 2007. Although QTC reported equity capital of approximately $685,000 (unaudited) as of December 31, 2006, the Superintendent issued the Order as he determined that the existence of unsafe and unsound financial conditions at QFG(1) has placed QTC in a potentially hazardous condition as it continues to conduct its business for the beneficiaries of various retirement plans and other fiduciary accounts, including, but not limited to, 401(k) plans, 403(b)(7) plans, and Individual Retirement Accounts, for which QTC is custodian(2) . The Superintendent appointed Deputy Superintendent Donald W. Groves of the Maine Bureau of Financial Institutions as Conservator.

Pursuant to the Order and Title 9-B M.R.S.A Section 363-A, the Conservator shall endeavor to remedy the potentially hazardous conditions affecting QTC. The Conservator has engaged Retirement System Group Inc., of New York, New York, a company with approximately $1.7 billion of retirement plan assets under management, to assist the Conservator in developing and executing a plan for the restoration of QTC to a safe and sound condition. In accordance with recently executed agreements, RSGroup Trust Company, a wholly-owned subsidiary of Retirement System Group Inc., is the sub-custodian for QTC.

While QTC is under conservation, plan sponsors and beneficiaries of retirement plans for which QTC is custodian will be able to continue to deal with their plans in the normal course of business. Services to be provided in the normal course of business include, but are not limited to, making contributions, purchasing and selling assets permitted under plans, taking distributions from plans, obtaining loans as permitted under the plan and applicable law, and other routine and customary transactions and reporting associated with the plans and in accordance with existing fee schedules and policies and practices of QTC. Plan sponsors and beneficiaries may continue to conduct business with QTC via mail, via phone, and via QTC's website, http://www.quadsweb.com. If the Conservator determines that policies and practices and/or fee schedules must change to facilitate the restoration of QTC to a safe and sound condition, plan sponsors and beneficiaries will be given reasonable notice and full disclosure of any changes affecting their plans.

A copy of the Order may be obtained from the Maine Bureau of Financial Institutions, 36 State House Station, Augusta, Maine 04333-0036 or may be downloaded from the Maine Bureau of Financial Institutions website at http://www.mainebankingreg.org.

All press inquiries regarding the Order should be directed to Superintendent Lloyd P. LaFountain III or Deputy Superintendent John A. Barr at (207) 624-8570.

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(1) As of December 31, 2006, QFG, on a consolidated, unaudited basis, was book insolvent reporting a negative net worth of approximately $2.8 million, assets of approximately $.8 million and liabilities of approximately $3.6 million. The Superintendent's Order was further brought on as a result of motions filed in Frederick County, Maryland Circuit Court on January 16, 2007 by a creditor of QFG seeking to attach and seize assets of QFG.

(2) As of December 31, 2006, QTC was custodian of approximately $595 million of retirement and other plan assets and served approximately 9,600 beneficiaries of these plans.

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