exv4w5



 







Exhibit 4.5




AMENDED AND RESTATED DECLARATION




OF TRUST




SOVEREIGN CAPITAL TRUST V




Dated as of May 22, 2006





 









 








Table
of Contents




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page No.
	 
	 

	 	 	 	ARTICLE I	 	 	 	 
	INTERPRETATION AND DEFINITIONS	 	 	2	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Section 1.1
	 	Definitions
	 	 	2	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	ARTICLE II	 	 	 	 
	TRUST INDENTURE ACT	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Section 2.1
	 	Trust Indenture Act; Application
	 	 	8	 
	 

	 	Section 2.2
	 	Lists of Holders of Securities
	 	 	8	 
	 

	 	Section 2.3
	 	Reports by the Property Trustee
	 	 	9	 
	 

	 	Section 2.4
	 	Periodic Reports to Property Trustee
	 	 	9	 
	 

	 	Section 2.5
	 	Evidence of Compliance with Conditions Precedent
	 	 	9	 
	 

	 	Section 2.6
	 	Events of Default; Waiver
	 	 	9	 
	 

	 	Section 2.7
	 	Event of Default; Notice
	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	ARTICLE III	 	 	 	 
	ORGANIZATION	 	 	12	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Section 3.1
	 	Name
	 	 	12	 
	 

	 	Section 3.2
	 	Office
	 	 	12	 
	 

	 	Section 3.3
	 	Purpose
	 	 	12	 
	 

	 	Section 3.4
	 	Authority
	 	 	12	 
	 

	 	Section 3.5
	 	Title to Property of the Trust
	 	 	12	 
	 

	 	Section 3.6
	 	Powers and Duties of the Administrative Trustees
	 	 	13	 
	 

	 	Section 3.7
	 	Prohibition of Actions by the Trust and the Trustees
	 	 	15	 
	 

	 	Section 3.8
	 	Powers and Duties of the Property Trustee
	 	 	16	 
	 

	 	Section 3.9
	 	Certain Duties and Responsibilities of the Property Trustee
	 	 	18	 
	 

	 	Section 3.10
	 	Certain Rights of Property Trustee
	 	 	20	 
	 

	 	Section 3.11
	 	Delaware Trustee
	 	 	22	 
	 

	 	Section 3.12
	 	Execution of Documents
	 	 	22	 
	 

	 	Section 3.13
	 	Not Responsible for Recitals or Issuance of Securities
	 	 	22	 
	 

	 	Section 3.14
	 	Duration of Trust
	 	 	22	 
	 

	 	Section 3.15
	 	Mergers
	 	 	22	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	ARTICLE IV	 	 	 	 
	SPONSOR	 	 	24	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Section 4.1
	 	Sponsor’s Purchase of Common Securities
	 	 	24	 
	 

	 	Section 4.2
	 	Responsibilities of the Sponsor
	 	 	24	 
	 

	 	Section 4.3
	 	Right to Proceed
	 	 	25	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	ARTICLE V	 	 	 	 
	TRUSTEES	 	 	25	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Section 5.1
	 	Number of Trustees: Appointment of Co-Trustee
	 	 	25	 
	 

	 	Section 5.2
	 	Delaware Trustee
	 	 	26	 






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Table
of Contents

(continued)




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page No.
	 
	 

	 	Section 5.3
	 	Property Trustee; Eligibility
	 	 	26	 
	 

	 	Section 5.4
	 	Certain Qualifications of Administrative Trustees and Delaware Trustee Generally
	 	 	27	 
	 

	 	Section 5.5
	 	Administrative Trustees
	 	 	27	 
	 

	 	Section 5.6
	 	Delaware Trustee
	 	 	27	 
	 

	 	Section 5.7
	 	Appointment, Removal and Resignation of Trustees
	 	 	28	 
	 

	 	Section 5.8
	 	Vacancies among Trustees
	 	 	29	 
	 

	 	Section 5.9
	 	Effect of Vacancies
	 	 	29	 
	 

	 	Section 5.10
	 	Meetings
	 	 	30	 
	 

	 	Section 5.11
	 	Delegation of Power
	 	 	30	 
	 

	 	Section 5.12
	 	Merger, Conversion, Consolidation or Succession to Business
	 	 	30	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	ARTICLE VI	 	 	 	 
	DISTRIBUTIONS	 	 	31	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Section 6.1
	 	Distributions
	 	 	31	 
	 

	 	Section 6.2
	 	Distribution of Notes in Exchange for Securities
	 	 	31	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	ARTICLE VII	 	 	 	 
	ISSUANCE OF SECURITIES	 	 	32	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Section 7.1
	 	General Provisions Regarding Securities
	 	 	32	 
	 

	 	Section 7.2
	 	Execution and Authentication
	 	 	33	 
	 

	 	Section 7.3
	 	Form and Dating
	 	 	33	 
	 

	 	Section 7.4
	 	Registrar, Paying Agent and Exchange Agent
	 	 	34	 
	 

	 	Section 7.5
	 	Paying Agent to Hold Money in Trust
	 	 	35	 
	 

	 	Section 7.6
	 	Replacement Securities
	 	 	35	 
	 

	 	Section 7.7
	 	Outstanding Capital Securities
	 	 	36	 
	 

	 	Section 7.8
	 	Capital Securities in Treasury
	 	 	36	 
	 

	 	Section 7.9
	 	Temporary Securities
	 	 	36	 
	 

	 	Section 7.10
	 	Cancellation
	 	 	37	 
	 

	 	Section 7.11
	 	CUSIP Numbers
	 	 	37	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	ARTICLE VIII	 	 	 	 
	TERMINATION OF TRUST	 	 	37	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Section 8.1
	 	Termination of Trust
	 	 	37	 
	 

	 	Section 8.2
	 	Liquidation Distribution Upon Dissolution or Termination of the Trust
	 	 	38	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	ARTICLE IX	 	 	 	 
	TRANSFER OF INTERESTS	 	 	40	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Section 9.1
	 	Transfer of Securities
	 	 	40	 
	 

	 	Section 9.2
	 	Transfer Procedures and Restrictions
	 	 	40	 
	 

	 	Section 9.3
	 	Deemed Security Holders
	 	 	44	 
	 

	 	Section 9.4
	 	Book Entry Interests
	 	 	44	 
	 

	 	Section 9.5
	 	Notices to Clearing Agency
	 	 	45	 
	 

	 	Section 9.6
	 	Appointment of Successor Clearing Agency
	 	 	45	 






(ii)









 





Table
of Contents

(continued)




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page No.
	 
	 

	 	 	 	ARTICLE X	 	 	 	 
	LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS	 	 	45	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Section 10.1
	 	Liability
	 	 	45	 
	 

	 	Section 10.2
	 	Exculpation
	 	 	46	 
	 

	 	Section 10.3
	 	Fiduciary Duty
	 	 	46	 
	 

	 	Section 10.4
	 	Indemnification
	 	 	47	 
	 

	 	Section 10.5
	 	Outside Businesses
	 	 	49	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	ARTICLE XI	 	 	 	 
	ACCOUNTING	 	 	50	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Section 11.1
	 	Fiscal Year
	 	 	50	 
	 

	 	Section 11.2
	 	Certain Accounting Matters
	 	 	50	 
	 

	 	Section 11.3
	 	Banking
	 	 	51	 
	 

	 	Section 11.4
	 	Withholding
	 	 	51	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	ARTICLE XII	 	 	 	 
	AMENDMENTS AND MEETINGS	 	 	51	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Section 12.1
	 	Amendments
	 	 	51	 
	 

	 	Section 12.2
	 	Meetings of the Holders; Action by Written Consent
	 	 	53	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	ARTICLE XIII	 	 	 	 
	REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE	 	 	55	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Section 13.1
	 	Representations and Warranties of Property Trustee
	 	 	55	 
	 

	 	Section 13.2
	 	Representations and Warranties of Delaware Trustee
	 	 	55	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	ARTICLE XIV	 	 	 	 
	REGISTRATION RIGHTS	 	 	56	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Section 14.1
	 	Registration Rights Agreement
	 	 	56	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	ARTICLE XV	 	 	 	 
	MISCELLANEOUS	 	 	56	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Section 15.1
	 	Notices
	 	 	56	 
	 

	 	Section 15.2
	 	Governing Law
	 	 	57	 
	 

	 	Section 15.3
	 	Intention of the Parties
	 	 	57	 
	 

	 	Section 15.4
	 	Headings
	 	 	57	 
	 

	 	Section 15.5
	 	Successors and Assigns
	 	 	58	 
	 

	 	Section 15.6
	 	Partial Enforceability
	 	 	58	 
	 

	 	Section 15.7
	 	Counterparts
	 	 	58	 
	 
	 	 	 	 	 	 	 	 
	 

	 	ANNEX I
	 	TERMS OF SECURITIES
	 	 	I-1	 
	 

	 	EXHIBIT A-1
	 	FORM OF CAPITAL SECURITY CERTIFICATE
	 	 	A1-1	 
	 

	 	EXHIBIT A-2
	 	FORM OF COMMON SECURITY CERTIFICATE
	 	 	A2-1	 






(iii)









 








CROSS-REFERENCE TABLE*




	 	 	 	 	 
	        Section of	 	 	 
	 Trust Indenture Act	 	Section of	 
	of 1939, as amended	 	Trust Agreement	 
	310(a) 
	 	 	5.3
	310(b) 
	 	 	5.3(c); 5.3(d)  
	311(a) 
	 	 	2.2(b)
	311(b) 
	 	 	2.2(b)
	312(a) 
	 	 	2.2(a)
	312(b) 
	 	 	2.2(b)
	313 
	 	 	2.3
	314(a) 
	 	 	2.4; 3.6(j)
	314(c) 
	 	 	2.5
	315(a) 
	 	 	3.9
	315(b) 
	 	 	2.7(a)
	315(c) 
	 	 	3.9(a)
	315(d) 
	 	 	3.9(b)
	316(a) 
	 	 	2.6
	316(c) 
	 	 	3.6(e)
	317(a) 
	 	 	3.8(e); 3.8(h)
	317(b) 
	 	 	3.8(i); 7.5








 




			
	*	 	This Cross-Reference Table does not constitute part of the Trust Agreement and shall not
affect the interpretation of any of its terms or provisions.






 









 








AMENDED AND RESTATED

DECLARATION OF TRUST

OF

SOVEREIGN CAPITAL TRUST V




May 22, 2006




          AMENDED AND RESTATED DECLARATION OF TRUST (“Trust Agreement”) dated and effective as of May
22, 2006 by the Trustees (as defined herein), the Sponsor (as defined herein) and by the holders,
from time to time, of undivided beneficial interests in the Trust to be issued pursuant to this
Trust Agreement;




          WHEREAS, the Trustees and the Sponsor established Sovereign Capital Trust V (the “Trust”), a
trust formed under the Delaware Statutory Trust Act pursuant to a Declaration of Trust dated as of
March 24, 2004 (the “Original Declaration”), and a Certificate of Trust filed with the Secretary of
State of the State of Delaware on April 16, 2004, for the sole purpose of issuing and selling
certain securities representing undivided beneficial interests in the assets of the Trust and
investing the proceeds thereof in certain Notes of the Note Issuer (each as hereinafter defined),
and engaging in only those other activities necessary, advisable or incidental thereto;




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




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




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




1









 








ARTICLE I

INTERPRETATION AND DEFINITIONS




Section 1.1 Definitions.




          Unless the context otherwise requires:




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




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




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




          (e) a term defined in the Trust Indenture Act has the same meaning when used in this Trust
Agreement unless otherwise defined in this Trust Agreement or unless the context otherwise
requires; and




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




          “Administrative Trustee” has the meaning set forth in Section 5.1.




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




          “Agent” means any Paying Agent, Registrar or Exchange Agent.




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




          “Book Entry Interest” means a beneficial interest in a Global Certificate registered
in the name of a Clearing Agency or its nominee, ownership and transfers of which shall be
maintained and made through book entries by a Clearing Agency as described in Section 9.4.




          “Business Day” means any day other than a Saturday or a Sunday or a day on which
banking institutions in the City of New York or Philadelphia, Pennsylvania are authorized or
required by law or executive order to close.




          “Capital Security Beneficial Owner” means, with respect to a Book Entry Interest, a
Person who is the beneficial owner of such Book Entry Interest, as reflected on the books of the
Clearing Agency, or on the books of a Person maintaining an account with such Clearing

2









 








Agency (directly as a Clearing Agency Participant or as an indirect participant, in each case
in accordance with the rules of such Clearing Agency).




          “Capital Securities” has the meaning specified in Section 7.1(a).




          “Capital Securities Guarantee” means the guarantee agreement dated as of May 22, 2006,
by the Sponsor in respect of the Capital Securities.




          “Clearing Agency” means an organization registered as a “Clearing Agency” pursuant to
Section 17A of the Exchange Act that is acting as depositary for the Capital Securities and in
whose name or in the name of a nominee of that organization shall be registered a Global
Certificate and which shall undertake to effect book entry transfers and pledges of the Capital
Securities.




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




          “Closing Time” means the time of any Closing under the Underwriting Agreement.




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




          “Commission” means the United States Securities and Exchange Commission as from time
to time constituted, or if at any time after the execution of this Trust Agreement such Commission
is not existing and performing the duties now assigned to it under applicable Federal securities
laws, then the body performing such duties at such time.




          “Common Securities” has the meaning specified in Section 7.1(a).




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




          “Corporate Trust Office” means the office of the Property Trustee at which the
corporate trust business of the Property Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this Agreement is located at 101 Barclay
Street, 21st Floor, New York, New York 10286.




          “Coupon Rate” has the meaning set forth in Annex I hereto.




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




          “Default” means an event, act or condition that with notice or lapse of time, or both,
would constitute an Event of Default.




3









 








          “Definitive Capital Securities” shall have the meaning set forth in Section 7.3(c).




          “Delaware Trustee” has the meaning set forth in Section 5.2.




          “Direct Action” shall have the meaning set forth in Section 3.8(e).




          “Distribution” means a distribution payable to Holders in accordance with Section 6.1.




          “DTC” means The Depository Trust Company, the initial Clearing Agency.




          “Event of Default” in respect of the Securities means an Event of Default (as defined
in the Indenture) that has occurred and is continuing in respect of the Notes.




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




          “Exchange Agent” has the meaning set forth in Section 7.4.




          “Extension Period” has the meaning set forth in Annex I hereto.




          “Federal Reserve Board” means the Board of Governors of the Federal Reserve System.




          “Fiduciary Indemnified Person” has the meaning set forth in Section 10.4(b).




          “Fiscal Year” has the meaning set forth in Section 11.1.




          “Fourth Supplemental Indenture” shall mean the Fourth Supplemental Indenture dated as
of May 22, 2006, between the Note Issuer and the Note Trustee.




          “Global Capital Security” has the meaning set forth in Section 7.3(a).




          “Holder” means a Person in whose name a Security is registered.




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




          “Indenture” means the Junior Subordinated Indenture dated as of September 1, 1999,
among the Note Issuer and the Note Trustee, as amended from time to time.




          “Indenture Event of Default” means an Event of Default (as such term is defined in the
Indenture) under the Indenture.




          “Interest Payment Date” has the meaning set forth in the Fourth Supplemental
Indenture.




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




4









 








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




          “Investment Company Event” has the meaning set forth in Annex I hereto.




          “Legal Action” has the meaning set forth in Section 3.6(g).




          “Like Amount” has the meaning set forth in Annex I hereto.




          “Liquidation Distribution” has the meaning set forth in Annex I hereto.




          “List of Holders” has the meaning set forth in Section 2.2(a).




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




          “90 Day Period” has the meaning set forth in Annex I hereto.




          “No Recognition Opinion” has the meaning set forth in Section 6.2.




          “Note Distribution Notice” has the meaning set forth in Section 6.2(c).




          “Note Issuer” means Sovereign Bancorp, Inc., a Pennsylvania corporation, or any
successor entity resulting from any consolidation, amalgamation, merger or other business
combination, in its capacity as issuer of the Notes under the Indenture.




          “Note Trustee” means BNY Midwest Trust Company (successor to Harris Trust and Savings
Bank), an Illinois banking corporation, as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor trustee.




          “Notes” means the 7.75% Junior Subordinated Notes due 2036 of the Note Issuer issued
pursuant to the Indenture.




          “Officers’ Certificate” means, with respect to any Person, a certificate signed by any
two of the Chairman, a Vice Chairman, the Chief Executive Officer, the President, a Vice President,
the Chief Financial Officer, the Treasurer, the Chief Accounting Officer, the Secretary, or an
Assistant Secretary of such Person. Any Officers’ Certificate delivered with respect to compliance
with a condition or covenant provided for in this Trust Agreement shall include:





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



5









 






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




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




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



          “Opinion of Counsel” means a written opinion of counsel, who may be an employee of the
Sponsor.




          “Paying Agent” has the meaning set forth in Section 7.4.




          “Payment Amount” has the meaning set forth in Section 6.1.




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




          “Property Trustee” has the meaning set forth in Section 5.3(a).




          “Property Trustee Account” has the meaning set forth in Section 3.8(c).




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




          “Prospectus” has the meaning set forth in Section 3.6(b) hereto.




          “QIBs” shall mean qualified institutional buyers as defined in Rule 144A.




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




          “Redemption Date” has the meaning set forth in Annex I hereto.




          “Redemption Notice” has the meaning set forth in Annex I hereto.




          “Redemption Price” has the meaning set forth in Annex I hereto.




          “Registrar” has the meaning set forth in Section 7.4.




          “Registration Statement” means the Registration Statement on Form S-3 (333-133514)
filed with the Commission on April 25, 2006.




          “Regulatory Capital Event” has the meaning set forth in Annex I hereto.




6









 








          “Related Party” means, with respect to the Sponsor, any direct or indirect wholly
owned subsidiary of the Sponsor or any other Person that owns, directly or indirectly, 100% of the
outstanding voting securities of the Sponsor.




          “Responsible Officer” means any officer within the Corporate Trust Office of the
Property Trustee, including any vice-president, any assistant vice-president, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the Corporate Trust Office of
the Property 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.




          “Rule 3a-5” means Rule 3a-5 under the Investment Company Act, or any successor rule or
regulation.




          “Rule 144” means Rule 144 under the Securities Act, as such rule may be amended from
time to time, or any similar rule or regulation hereafter adopted by the Commission.




          “Rule 144A” means Rule 144A under the Securities Act, as such rule may be amended from
time to time, or any similar rule or regulation hereafter adopted by the Commission.




          “Securities” or “Trust Securities” means the outstanding Common Securities and
the outstanding Capital Securities.




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




          “Special Event” has the meaning set forth in Annex I hereto.




          “Sponsor” means Sovereign Bancorp, Inc., a Pennsylvania corporation, or any successor
entity resulting from any merger, consolidation, amalgamation or other business combination, in its
capacity as sponsor of the Trust.




          “Statutory Trust Act” means Chapter 38 of Title 12 of the Delaware Code, 12 Del.
Code Section 3801 et seq., as it may be amended from time to time, or any
successor legislation.




          “Successor Entity” has the meaning set forth in Section 3.15(b)(i).




          “Super Majority” has the meaning set forth in Section 2.6(a)(ii).




          “Tax Event” has the meaning set forth in Annex I hereto.




          “10% in liquidation amount” means, with respect to the Trust Securities, except as
provided in the terms of the Capital Securities or by the Trust Indenture Act, Holder(s) of
outstanding Trust Securities voting together as a single class or, as the context may require,
Holders of outstanding Capital Securities or Holders of outstanding Common Securities voting
separately as a class, who are the record owners of 10% or more of the aggregate liquidation

7









 








amount (including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.




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




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




          “Trust Indenture Act” means the Trust Indenture Act of 1939, as amended from time to
time, or any successor legislation.




          “Underwriting Agreement” means any underwriting or placement agreement for the initial
offering and sale of Capital Securities.




ARTICLE II

TRUST INDENTURE ACT




Section 2.1 Trust Indenture Act; Application.




          (a) This Trust Agreement is subject to the provisions of the Trust Indenture Act that are
required to be part of this Trust Agreement in order for this Trust Agreement to be qualified under
the Trust Indenture Act and shall, to the extent applicable, be governed by such provisions.




          (b) The Property Trustee shall be the only Trustee which is a Trustee for the purposes of the
Trust Indenture Act.




          (c) If and to the extent that any provision of this Trust Agreement limits, qualifies or
conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act,
such imposed duties shall control.




          (d) The application of the Trust Indenture Act to this Trust Agreement shall not affect the
Trust’s classification as a grantor trust for United States federal income tax purposes and shall
not affect the nature of the Securities as equity securities representing undivided beneficial
interests in the assets of the Trust.




Section 2.2 Lists of Holders of Securities.




          (a) Each of the Sponsor and the Administrative Trustees on behalf of the Trust shall provide
the Property Trustee, unless the Property Trustee is Registrar for the Securities, (i) within 14
days after each record date for payment of Distributions, a list, in such form as the Property
Trustee may reasonably require, of the names and addresses of the Holders




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(“List of Holders”) as of such record date, provided that neither the Sponsor
nor the Administrative Trustees on behalf of the Trust shall be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most recent List of Holders given
to the Property Trustee by the Sponsor and the Administrative Trustees on behalf of the Trust, and
(ii) at any other time, within 30 days of receipt by the Trust of a written request for a List of
Holders as of a date no more than 14 days before such List of Holders is given to the Property
Trustee. The Property Trustee shall preserve, in as current a form as is reasonably practicable,
all information contained in Lists of Holders given to it or which it receives in the capacity as
Paying Agent (if acting in such capacity), provided that the Property Trustee may
destroy any List of Holders previously given to it on receipt of a new List of Holders.




          (b) The Property Trustee shall comply with its obligations under Sections 311(a), 311(b) and
312(b) of the Trust Indenture Act.




Section 2.3 Reports by the Property Trustee.




          Within 60 days after May 30 of each year, commencing May 30, 2007, the Property Trustee shall
provide to the Holders of the Capital Securities such reports as are required by Section 313 of the
Trust Indenture Act, if any, in the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Property Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act. Delivery of such reports, information and documents to the Property
Trustee is for informational purposes only and the Property Trustee’s receipt of such shall not
constitute constructive notice of any information contained therein or determinable from the
information contained therein.




Section 2.4 Periodic Reports to Property Trustee.




          Each of the Sponsor and the Administrative Trustees on behalf of the Trust shall provide to
the Property Trustee such documents, reports and information as are required by Section 314 of the
Trust Indenture Act (if any) and the compliance certificate required by Section 314 of the Trust
Indenture Act in the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.




Section 2.5 Evidence of Compliance with Conditions Precedent.




          Each of the Sponsor and the Administrative Trustees on behalf of the Trust shall provide to
the Property Trustee such evidence of compliance with any conditions precedent provided for in this
Trust Agreement that relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) of the Trust Indenture Act may be given in the form of an Officers’ Certificate.




Section 2.6 Events of Default; Waiver.




          (a) The Holders of a Majority in liquidation amount of Capital Securities may, by vote or
written consent, on behalf of the Holders of all of the Capital Securities, waive any past Event of
Default in respect of the Capital Securities and its consequences, provided that,
if the underlying Indenture Event of Default:




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          (i) is not waivable under the Indenture, the Event of Default under this Trust
Agreement shall also not be waivable; or




          (ii) requires the consent or vote of greater than a majority in aggregate principal
amount of the holders of the Notes (a “Super Majority”) to be waived under the Indenture,
the Event of Default under this Trust Agreement may only be waived by the vote of the
Holders of at least the proportion in aggregate liquidation amount of the Capital Securities
that the relevant Super Majority represents of the aggregate principal amount of the Notes
outstanding.


The foregoing provisions of this Section 2.6(a) shall be in lieu of Section 316(a)(1)(B) of the
Trust Indenture Act and such Section 316(a)(1)(B) of the Trust Indenture Act is hereby expressly
excluded from this Trust Agreement and the Securities, as permitted by the Trust Indenture Act.
Upon such waiver, any such Event of Default shall cease to exist, and any Event of Default with
respect to the Capital Securities arising therefrom shall be deemed to have been cured, for every
purpose of this Trust Agreement, but no such waiver shall extend to any subsequent or other default
or an Event of Default with respect to the Capital Securities or impair any right consequent
thereon. Any waiver by the Holders of the Capital Securities of an Event of Default with respect
to the Capital Securities shall also be deemed to constitute a waiver by the Holders of the Common
Securities of any such Event of Default with respect to the Common Securities for all purposes of
this Trust Agreement without any further act, vote, or consent of the Holders of the Common
Securities.




          (b) The Holders of a Majority in liquidation amount of the Common Securities may, by vote, on
behalf of the Holders of all of the Common Securities, waive any past Event of Default with respect
to the Common Securities and its consequences, provided that, if the underlying
Indenture Event of Default:





          (i) is not waivable under the Indenture, except where the Holders of the Common
Securities are deemed to have waived such Event of Default under this Trust Agreement as
provided below in this Section 2.6(b), the Event of Default under this Trust Agreement shall
also not be waivable; or




          (ii) requires the consent or vote of a Super Majority to be waived, except where the
Holders of the Common Securities are deemed to have waived such Event of Default under this
Trust Agreement as provided below in this Section 2.6(b), the Event of Default under this
Trust Agreement may only be waived by the vote of the Holders of at least the proportion in
aggregate liquidation amount of the Common Securities that the relevant Super Majority
represents of the aggregate principal amount of the Notes outstanding;


provided further, the Holders of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common Securities and its
consequences until all Events of Default with respect to the Capital Securities have been cured,
waived or otherwise eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on behalf of the
Holders of the Capital Securities and only the Holders of the Capital Securities will have the
right to direct the Property Trustee in accordance with the terms of the Securities. The foregoing


10









 






provisions of this Section 2.6(b) shall be in lieu of Section 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act and such Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are
hereby expressly excluded from this Trust Agreement and the Securities, as permitted by the Trust
Indenture Act. Subject to the foregoing provisions of this Section 2.6(b), upon such waiver, any
such default shall cease to exist and any Event of Default with respect to the Common Securities
arising therefrom shall be deemed to have been cured for every purpose of this Trust Agreement, but
no such waiver shall extend to any subsequent or other default or Event of Default with respect to
the Common Securities or impair any right consequent thereon.




          (c) A waiver of an Event of Default under the Indenture by the Property Trustee, at the
direction of the Holders of the Capital Securities, constitutes a waiver of the corresponding Event
of Default under this Trust Agreement. The foregoing provisions of this Section 2.6(c) shall be in
lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Trust Agreement and the Securities, as
permitted by the Trust Indenture Act.




Section 2.7 Event of Default; Notice.




          (a) The Property Trustee shall, within 90 days after the occurrence of an Event of Default
actually known to a Responsible Officer, transmit by mail, first class postage prepaid, to the
Holders, notices of all defaults with respect to the Securities actually known to a Responsible
Officer, unless such defaults have been cured before the giving of such notice (the term “defaults”
for the purposes of this Section 2.7(a) being hereby defined to be an Event of Default as defined
in the Indenture, not including any periods of grace provided for therein and irrespective of the
giving of any notice provided therein); provided that, except for a default in the
payment of principal of (or premium, if any) or interest on any of the Notes, the Property Trustee
shall be protected in withholding such notice if and so long as a Responsible Officer in good faith
determines that the withholding of such notice is in the interests of the Holders.




          (b) The Property Trustee shall not be deemed to have knowledge of any default except:





          (i) a default under Sections 2.7(a) and 2.7(b) of the Fourth Supplemental Indenture;
or




          (ii) any default as to which the Property Trustee shall have received written notice
or of which a Responsible Officer charged with the administration of the Trust Agreement
shall have actual knowledge.



          (c) Within five Business Days after the occurrence of any Event of Default under Sections
2.7(a) and 2.7(b) of the Indenture, the Property Trustee shall transmit notice of such Event of
Default to the Holders of the Capital Securities, the Administrative Trustees and the Sponsor,
unless such Event of Default shall have been cured or waived. The Sponsor and the Administrative
Trustees shall file annually with the Property Trustee a certification as to whether or not they
are in compliance with all the conditions and covenants applicable to them under this Trust
Agreement. The Sponsor or Administrative Trustees shall deliver to the Property Trustee as soon as
possible and in any event within five days after the Sponsor or the Administrative Trustees become
aware of the occurrence of any Event of Default or an event that, with notice or

11









 








the lapse of time or both, would constitute an Event of Default, an Officer’s Certificate
setting forth the details of such Event of Default or default and the action that the Sponsor or
Administrative Trustees propose to take with respect thereto.




ARTICLE III

ORGANIZATION




Section 3.1 Name.




          The Trust is named “Sovereign Capital Trust V” as such name may be modified from time to time
by the Administrative Trustees following written notice to the Holders. The Trust’s activities may
be conducted under the name of the Trust or any other name deemed advisable by the Administrative
Trustees.




Section 3.2 Office.




          The address of the principal office of the Trust is 1105 North Market Street, 7th Floor,
Wilmington, Delaware 19801. On ten Business Days written notice to the Holders of Securities, the
Administrative Trustees may designate another principal office.




Section 3.3 Purpose.




          The exclusive purposes and functions of the Trust are (a) to issue and sell Securities, (b)
use the proceeds from the sale of the Securities to acquire the Notes, (c) pay Distributions to the
Holders of the Capital Securities and the Common Securities from the payments on the Notes received
by the Trust, and (d) except as otherwise limited herein, to engage in only those other activities
necessary, advisable or incidental thereto. The Trust shall not borrow money, issue debt or
reinvest proceeds derived from investments, mortgage or pledge any of its assets, or otherwise
undertake (or permit to be undertaken) any activity that would cause the Trust not to be classified
for United States federal income tax purposes as a grantor trust.




Section 3.4 Authority.




          Subject to the limitations provided in this Trust Agreement and to the specific duties of the
Property Trustee, the Administrative Trustees shall have exclusive and complete authority to carry
out the purposes of the Trust. An action taken by the Administrative Trustees in accordance with
their powers shall constitute the act of and serve to bind the Trust, and an action taken by the
Property Trustee on behalf of the Trust in accordance with its powers shall constitute the act of
and serve to bind the Trust. In dealing with the Trustees acting on behalf of the Trust, no Person
shall be required to inquire into the authority of the Trustees to bind the Trust. Persons dealing
with the Trust are entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Trust Agreement.




Section 3.5 Title to Property of the Trust.




          Except as provided in Section 3.8 with respect to the Notes and the Property Trustee Account
or as otherwise provided in this Trust Agreement, legal title to all assets of the

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Trust shall be vested in the Trust. The Holders shall not have legal title to any part of the
assets of the Trust, but shall have an undivided beneficial interest in the assets of the Trust.




Section 3.6 Powers and Duties of the Administrative Trustees.




          The Administrative Trustees shall have the exclusive power, duty and authority to cause the
Trust to engage in the following activities:




          (a) to issue and sell the Securities in accordance with this Trust Agreement;
provided, however, that (i) the Trust may issue no more than one series of Capital
Securities and no more than one series of Common Securities, (ii) there shall be no interests in
the Trust other than the Securities, and (iii) the issuance of Securities shall be limited to a
simultaneous issuance of both the Capital Securities and Common Securities at a Closing Time;




          (b) in connection with the issue and sale of the Capital Securities, at the direction of the
Sponsor, to:





          (i) prepare and execute, if necessary, a prospectus and prospectus supplement (the
“Prospectus”) in preliminary and final form prepared by the Sponsor, in relation to the
offering and sale of Capital Securities, and to execute and file with the Commission, at
such time as determined by the Sponsor, any Registration Statement, including any amendments
thereto;




          (ii) execute and file any documents prepared by the Sponsor, or take any acts as
determined by the Sponsor to be necessary in order to qualify or register all or part of the
Capital Securities in any State in which the Sponsor has determined to qualify or register
such Capital Securities for sale;




          (iii) execute and file an application, prepared by the Sponsor, to permit the Capital
Securities to trade or be quoted or listed in or on the New York Stock Exchange or any other
securities exchange, quotation system or the Nasdaq Stock Market’s National Market;




          (iv) execute and deliver letters, documents, or instruments with DTC and other
Clearing Agencies relating to the Capital Securities;




          (v) if required, execute and file with the Commission a registration statement on Form
8-A, including any amendments thereto, prepared by the Sponsor, relating to the registration
of the Capital Securities under Section 12 of the Exchange Act; and




          (vi) execute and enter into the Underwriting Agreement providing for, among other
things, the sale and registration of the Capital Securities;



          (c) to acquire the Notes with the proceeds of the sale of the Capital Securities and the
Common Securities; provided, however, that the Administrative Trustees shall cause
legal title to the Notes to be held of record in the name of the Property Trustee for the benefit
of the Holders;




13









 








          (d) to give the Sponsor and the Property Trustee prompt written notice of the occurrence of a
Special Event;




          (e) to establish a record date with respect to all actions to be taken hereunder that require
a record date be established, including and with respect to, for the purposes of Section 316(c) of
the Trust Indenture Act, Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Holders of Capital Securities and Holders of Common Securities as to such
actions and applicable record dates;




          (f) to take all actions and perform such duties as may be required of the Administrative
Trustees pursuant to the terms of the Securities;




          (g) to bring or defend, pay, collect, compromise, arbitrate, resort to legal action, or
otherwise adjust claims or demands of or against the Trust (“Legal Action”), unless pursuant to
Section 3.8(e) the Property Trustee has the exclusive power to bring such Legal Action;




          (h) to employ or otherwise engage employees and agents (who may be designated as officers with
titles) and managers, contractors, advisors, and consultants and pay reasonable compensation for
such services;




          (i) to cause the Trust to comply with the Trust’s obligations under the Trust Indenture Act;




          (j) to give the certificate required by Section 314(a)(4) of the Trust Indenture Act to the
Property Trustee, which certificate may be executed by any Administrative Trustee;




          (k) to incur expenses that are necessary or incidental to carry out any of the purposes of the
Trust;




          (l) to act as, or appoint another Person to act as, Registrar and Exchange Agent for the
Securities or to appoint a Paying Agent for the Securities as provided in Section 7.4 except for
such time as such power to appoint a Paying Agent is vested in the Property Trustee;




          (m) to give prompt written notice to the Property Trustee and to Holders of any notice
received from the Note Issuer of its election to defer payments of interest on the Notes by
extending the interest payment period under the Indenture;




          (n) to take all action that may be necessary or appropriate for the preservation and the
continuation of the Trust’s valid existence, rights, franchises and privileges as a statutory trust
under the laws of the State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders or to enable the Trust to effect the
purposes for which the Trust was created;




          (o) to take any action, not inconsistent with this Trust Agreement or with applicable law,
that the Administrative Trustees determine in their discretion to be necessary or desirable in
carrying out the activities of the Trust as set out in this Section 3.6, including, but not limited
to:




14









 









          (i) causing the Trust not to be deemed to be an Investment Company required to be
registered under the Investment Company Act;




          (ii) causing the Trust to be classified for United States federal income tax purposes
as a grantor trust; and




          (iii) cooperating with the Note Issuer to ensure that the Notes will be treated as
indebtedness of the Note Issuer for United States federal income tax purposes;



          (p) to take all action necessary to cause the Capital Securities to be registered pursuant to
an effective registration statement under the Securities Act;




          (q) to take all action necessary to cause all applicable tax returns and tax information
reports that are required to be filed with respect to the Trust to be duly prepared and filed by
the Administrative Trustees, on behalf of the Trust; and




          (r) to execute all documents or instruments, perform all duties and powers, and do all things
for and on behalf of the Trust in all matters necessary or incidental to the foregoing.




          The Administrative Trustees must exercise the powers set forth in this Section 3.6 in a manner
that is consistent with the purposes and functions of the Trust set out in Section 3.3, and the
Administrative Trustees shall not take any action that is inconsistent with the purposes and
functions of the Trust set forth in Section 3.3.




          Subject to this Section 3.6, the Administrative Trustees shall have none of the powers or the
authority of the Property Trustee set forth in Section 3.8.




          Any expenses incurred by the Administrative Trustees pursuant to this Section 3.6 shall be
reimbursed by the Note Issuer.




Section 3.7 Prohibition of Actions by the Trust and the Trustees.




          (a) At all times throughout the term of the Trust, all trustees of the Trust will be “United
States persons” and at least one of the trustees will be a bank, within the meaning of section
301.7701-7(d)(1)(iv)(I)(1) of the Treasury Regulations.




          (b) The Trust shall not, and the Trustees (including the Property Trustee and the Delaware
Trustee) shall cause the Trust not to, engage in any activity other than as required or authorized
by this Trust Agreement. In particular, the Trust shall not:





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




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




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



15









 






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




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




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




          (vii) other than as provided in this Trust Agreement or Annex I, (A) direct the time,
method and place of conducting any proceeding with respect to any remedy available to the
Note Trustee, or exercising any trust or power conferred upon the Note Trustee with respect
to the Notes, (B) waive any past default that is waivable under the Indenture, or (C)
exercise any right to rescind or annul any declaration that the principal of all the Notes
shall be due and payable; or




          (viii) consent to any amendment, modification or termination of the Indenture or the
Notes where such consent shall be required unless the Trust shall have received an opinion
of an independent tax counsel experienced in such matters to the effect that such amendment,
modification or termination will not cause more than an insubstantial risk that for United
States federal income tax purposes the Trust will not be classified as a grantor trust.



Section 3.8 Powers and Duties of the Property Trustee.




          (a) The legal title to the Notes shall be owned by and held of record in the name of the
Property Trustee in trust for the benefit of the Holders. The right, title and interest of the
Property Trustee to the Notes shall vest automatically in each Person who may hereafter be
appointed as Property Trustee in accordance with Section 5.7. Such vesting and cessation of title
shall be effective whether or not conveyancing documents with regard to the Notes have been
executed and delivered.




          (b) The Property Trustee shall not transfer its right, title and interest in the Notes to the
Administrative Trustees or to the Delaware Trustee (if the Property Trustee does not also act as
Delaware Trustee).




          (c) The Property Trustee shall:





          (i) establish and maintain a segregated non-interest bearing trust account (the
“Property Trustee Account”) in the name of and under the exclusive control of the Property
Trustee on behalf of the Holders and, upon the receipt of payments of funds made in respect
of the Notes held by the Property Trustee, deposit such funds into the Property Trustee
Account and make payments or cause the Paying Agent to make payments to the Holders from the
Property Trustee Account in accordance with Section 6.1. Funds in the Property Trustee
Account shall be held uninvested until disbursed in accordance with this Trust Agreement.
The Property Trustee Account shall be an account that is maintained with a banking
institution the rating on whose long-term unsecured indebtedness by a “nationally recognized
statistical rating organization”, as



16









 







that term is defined for purposes of Rule 436(g)(2) under the Securities Act, is at
least investment grade;




          (ii) engage in such ministerial activities as shall be necessary or appropriate to
effect the redemption of the Trust Securities to the extent the Notes are prepaid, redeemed
or mature; and




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



          (d) The Property Trustee shall take all actions and perform such duties as may be specifically
required of the Property Trustee pursuant to the terms of this Trust Agreement and the Trust
Securities.




          (e) Subject to Section 3.9(a), the Property Trustee shall take any Legal Action which arises
out of or in connection with an Event of Default of which a Responsible Officer has actual
knowledge or the Property Trustee’s duties and obligations under this Trust Agreement or the Trust
Indenture Act, and if such Property Trustee shall have failed to take such Legal Action, the
Holders of the Capital Securities may take such Legal Action, to the same extent as if such Holders
of Capital Securities held an aggregate principal amount of Notes equal to the aggregate
liquidation amount of such Capital Securities, without first proceeding against the Property
Trustee or the Trust; provided, however, that if an Event of Default has occurred
and is continuing and such event is attributable to the failure of the Note Issuer to pay the
principal of or premium, if any, or interest on the Notes on the date such principal, premium, if
any, or interest is otherwise payable (or in the case of redemption, on the redemption date), then
a Holder of Capital Securities may directly institute a proceeding for enforcement of payment to
such Holder of the principal of or premium, if any, or interest on the Notes having a principal
amount equal to the aggregate liquidation amount of the Capital Securities of such Holder (a
“Direct Action”) on or after the respective due date specified in the Notes. In connection with
such Direct Action, the rights of the Holders of the Common Securities will be subrogated to the
rights of such Holder of Capital Securities to the extent of any payment made by the Note Issuer to
such Holder of Capital Securities in such Direct Action. Except as provided in the preceding
sentences, the Holders of Capital Securities will not be able to exercise directly any other remedy
available to the holders of the Notes.




          (f) The Property Trustee shall not resign as a Trustee unless either:





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




          (ii) a successor Property Trustee has been appointed and has accepted that appointment
in accordance with Section 5.7 (a “Successor Property Trustee”).



          (g) The Property Trustee shall have the legal power to exercise all of the rights, powers and
privileges of a holder of Notes under the Indenture and, if an Event of Default actually known to a
Responsible Officer occurs and is continuing, the Property Trustee shall, for

17









 








the benefit of Holders, enforce its rights as holder of the Notes subject to the rights of the
Holders pursuant to the terms of such Securities to direct the acts of the Property Trustee in
accordance with the terms of the Securities as set forth in Annex I hereto.




          (h) The Property Trustee shall be authorized to undertake any actions set forth in Section
317(a) of the Trust Indenture Act.




          (i) For such time as the Property Trustee is the Paying Agent, the Property Trustee may
authorize one or more Persons to act as additional Paying Agents and to pay Distributions,
redemption payments or liquidation payments on behalf of the Trust with respect to all Securities,
and any such Paying Agent shall comply with Section 317(b) of the Trust Indenture Act. Any such
additional Paying Agent may be removed by the Property Trustee at any time the Property Trustee
remains as Paying Agent, and a successor Paying Agent or additional Paying Agents may be (but are
not required to be) appointed at any time by the Property Trustee while the Property Trustee is so
acting as Paying Agent.




          (j) Subject to this Section 3.8, the Property Trustee shall have none of the duties,
liabilities, powers or the authority of the Administrative Trustees set forth in Section 3.6.




          Notwithstanding anything expressed or implied to the contrary in this Trust Agreement or any
Annex or Exhibit hereto, (i) the Property Trustee shall exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of the Trust set out in
Section 3.3, and (ii) the Property Trustee shall not take any action that is inconsistent with the
purposes and functions of the Trust set out in Section 3.3.




Section 3.9 Certain Duties and Responsibilities of the Property Trustee.




          (a) The Property Trustee, before the occurrence of any Event of Default and after the curing
or waiver of all Events of Default that may have occurred, shall undertake to perform only such
duties as are specifically set forth in this Trust Agreement and in the Securities and no implied
covenants shall be read into this Trust Agreement against the Property Trustee. In case an Event
of Default has occurred (that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer has actual knowledge, the Property Trustee shall exercise such of the rights
and powers vested in it by this Trust Agreement, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in the conduct of his
or her own affairs.




          (b) No provision of this Trust Agreement shall be construed to relieve the Property 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 an Event of Default and after the curing or waiving of
all such Events of Default that may have occurred:




          (A) the duties and obligations of the Property Trustee shall be determined
solely by the express provisions of this Trust Agreement and in the Securities, the
Property Trustee shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Trust Agreement



18









 







and in the Securities, and no implied covenants or obligations shall be read
into this Trust Agreement against the Property Trustee; and




          (B) in the absence of bad faith on the part of the Property Trustee, the
Property Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or opinions
furnished to the Property Trustee and conforming to the requirements of this Trust
Agreement; provided, however, that in the case of any such
certificates or opinions that by any provision hereof are specifically required to
be furnished to the Property Trustee, the Property Trustee shall be under a duty to
examine the same to determine whether or not they conform to the requirements of
this Trust Agreement (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein absent manifest error);




          (ii) the Property Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;




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




          (iv) no provision of this Trust Agreement shall require the Property 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 it shall have
reasonable grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Trust Agreement or indemnity reasonably
satisfactory to the Property Trustee against such risk or liability is not reasonably
assured to it;




          (v) the Property Trustee’s sole duty with respect to the custody, safe keeping and
physical preservation of the Notes and the Property Trustee Account shall be to deal with
such property in a similar manner as the Property Trustee deals with similar property for
its own account, subject to the protections and limitations on liability afforded to the
Property Trustee under this Trust Agreement and the Trust Indenture Act;




          (vi) the Property Trustee shall have no duty or liability for or with respect to the
value, genuineness, existence or sufficiency of the Notes or the payment of any taxes or
assessments levied thereon or in connection therewith;




          (vii) the Property Trustee shall not be liable for any interest on any money received
by it except as it may otherwise agree in writing with the Sponsor. Money held by the
Property Trustee need not be segregated from other funds held by it except in



19









 







relation to the Property Trustee Account maintained by the Property Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise required by law; and




          (viii) the Property Trustee shall not be responsible for monitoring the compliance by
the Administrative Trustees or the Sponsor with their respective duties under this Trust
Agreement, nor shall the Property Trustee be liable for any default or misconduct of the
Administrative Trustees or the Sponsor.



Section 3.10 Certain Rights of Property Trustee.




          (a) Subject to the provisions of Section 3.9:





          (i) the Property Trustee may conclusively rely and shall be fully protected in acting
or refraining from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document (whether in its original or facsimile form) 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 Sponsor or the Administrative Trustees contemplated
by this Trust Agreement may be sufficiently evidenced by an Officers’ Certificate;




          (iii) whenever in the administration of this Trust Agreement, the Property Trustee
shall deem it desirable that a matter be proved or established before taking, suffering or
omitting any action hereunder, the Property Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers’ Certificate which, upon receipt of such request, shall
be promptly delivered by the Sponsor or the Administrative Trustees;




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




          (v) the Property Trustee may consult with counsel or other experts of its selection,
and the advice or opinion of such counsel and experts with respect to legal matters or
advice within the scope of such experts’ area of expertise shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or opinion. Such counsel may be
counsel to the Sponsor or any of its Affiliates, and may include any of its employees. The
Property Trustee shall have the right at any time to seek instructions concerning the
administration of this Trust Agreement from any court of competent jurisdiction;




          (vi) the Property Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Trust Agreement at the request or direction of any Holder,
unless such Holder shall have provided to the Property Trustee security and



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indemnity, reasonably satisfactory to the Property Trustee, against the costs, expenses
(including reasonable attorneys’ fees and expenses and the expenses of the Property
Trustee’s agents, nominees or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable advances as may be
requested by the Property Trustee, provided that nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Property Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested in it by this Trust
Agreement;




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




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




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




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




          (xi) except as otherwise expressly provided by this Trust Agreement, the Property
Trustee shall not be under any obligation to take any action that is discretionary under the
provisions of this Trust Agreement; and




          (xii) the Property Trustee shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith, without negligence, and reasonably believed by it
to be authorized or within the discretion or rights or powers conferred upon it by this
Trust Agreement.



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




Section 3.11 Delaware Trustee.




          Notwithstanding any other provision of this Trust Agreement other than Section 5.2, the
Delaware Trustee shall not be entitled to exercise any powers, nor shall the Delaware Trustee have
any of the duties and responsibilities of the Administrative Trustees or the Property Trustee
described in this Trust Agreement. Except as set forth in Section 5.2, the Delaware Trustee shall
be a Trustee for the sole and limited purpose of fulfilling the requirements of Section 3807 of the
Statutory Trust Act.




Section 3.12 Execution of Documents.




          Unless otherwise determined by the Administrative Trustees, and except as otherwise required
by the Statutory Trust Act, a majority of the Administrative Trustees or, if there are only two,
any Administrative Trustee or, if there is only one, such Administrative Trustee is authorized to
execute on behalf of the Trust any documents that the Administrative Trustees have the power and
authority to execute pursuant to Section 3.6.




Section 3.13 Not Responsible for Recitals or Issuance of Securities.




          The recitals contained in this Trust Agreement and the Securities shall be taken as the
statements of the Sponsor, and the Trustees do not assume any responsibility for their correctness.
The Trustees make no representations as to the value or condition of the property of the Trust or
any part thereof. The Trustees make no representations as to the validity or sufficiency of this
Trust Agreement, the Securities, the Notes or the Indenture.




Section 3.14 Duration of Trust.




          The Trust, unless terminated pursuant to the provisions of Article VIII hereof, shall have
existence up to December 31, 2060.




Section 3.15 Mergers.




          (a) The Trust may not merge with or into, consolidate, amalgamate, or be replaced by, or
convey, transfer or lease its properties and assets substantially as an entirety to any Person,
except as described in Section 3.15(b) and (c).




          (b) The Trust may, with the consent of the Administrative Trustees but without the consent of
the Holders of the Capital Securities, the Property Trustee, or the Delaware Trustee, consolidate,
amalgamate, or merge with or into, or be replaced by, a trust if:





          (i) the successor entity, if not the Trust, either:



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          (A) expressly assumes all of the obligations of the Trust with respect to the
Capital Securities and the Common Securities, or




          (B) substitutes for the Capital Securities and the Common Securities other
securities having substantially the same terms as the Capital Securities and the
Common Securities, so long as the successor securities rank the same as the Capital
Securities and the Common Securities in priority with respect to Distributions and
payments upon liquidation, redemption, and otherwise;




          (ii) the resulting or acquiring entity, if other than the Sponsor, is organized and
existing under the laws of the United States or any state or the District of Columbia;




          (iii) the Sponsor, as issuer of the Notes, expressly acknowledges a trustee of the
successor entity possessing the same powers and duties as the Property Trustee as the holder
of the corresponding Notes;




          (iv) the Capital Securities or any successor securities are listed, or any successor
securities will be listed upon notification of issuance, on any national securities exchange
or automated quotation system, if any, on which the Capital Securities are then listed or
quoted;




          (v) the merger, consolidation, amalgamation, or replacement does not cause the Capital
Securities, including any successor securities, to be downgraded by any nationally
recognized statistical rating organization;




          (vi) the merger, consolidation, amalgamation, or replacement does not adversely affect
the rights, preferences, and privileges of the Holders of the Capital Securities and the
Common Securities, including any successor securities, in any material respect, other than
in connection with any dilution of the Holders’ interest in the new entity;




          (vii) the successor entity has a purpose identical to that of the Trust;




          (viii) prior to the merger, consolidation, amalgamation, or replacement, the Sponsor
has received an opinion of counsel to the Trust to the effect that:




          (A) the merger, consolidation, amalgamation, or replacement does not adversely
affect the rights, preferences, and privileges of the Holders of the Capital
Securities and the Common Securities, including any successor securities, in any
material respect, other than in connection with any dilution of the Holders’
interest in the new entity;




          (B) following the merger, consolidation, amalgamation, or replacement, neither
the Trust nor the successor entity will be required to register as an investment
company under the Investment Company Act; and



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          (C) following the merger, consolidation, amalgamation, or replacement, the
Trust or the successor entity will continue to be classified as a grantor trust for
United States federal income tax purposes; and




          (D) the Sponsor guarantees the obligations of the successor entity under the
successor securities at least to the extent provided by the guarantees of the
Capital Securities and the Common Securities.



          (c) The Trust may not, except with the consent of Holders of 100% in liquidation amount of the
Capital Securities and the Common Securities, consolidate, amalgamate, merge with or into, or be
replaced by any other entity or permit any other entity to consolidate, amalgamate, merge with or
into, or replace it if that consolidation, merger, amalgamation, or replacement would cause the
Trust or the successor entity to be classified as other than a grantor trust for United States
federal income tax purposes.




ARTICLE IV

SPONSOR




Section 4.1 Sponsor’s Purchase of Common Securities.




          At the Closing Time, the Sponsor will purchase all of the Common Securities then issued by the
Trust, in an amount at least equal to approximately, but not less than, 3% of the capital of the
Trust, at the same time as the Capital Securities are issued and sold.




Section 4.2 Responsibilities of the Sponsor.




          In connection with the issue and sale of the Capital Securities, the Sponsor shall have the
exclusive right and responsibility to engage in the following activities:




          (a) to prepare the Prospectus and to prepare for filing by the Trust with the Commission any
Registration Statement, including any amendments thereto;




          (b) to determine the States in which to take appropriate action to qualify or register for
sale all or part of the Capital Securities and to do any and all such acts, other than actions
which must be taken by the Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust, as the Sponsor deems
necessary or advisable in order to comply with the applicable laws of any such States;




          (c) if deemed necessary or advisable by the Sponsor, to prepare for filing by the Trust an
application to permit the Capital Securities to trade or be quoted or listed in or on the New York
Stock Exchange, or any other securities exchange, quotation system or the Nasdaq Stock Market’s
National Market;




          (d) to prepare for filing by the Trust with the Commission a registration statement on Form
8-A, including any amendments thereto, relating to the registration of the Capital Securities under
Section 12 of the Exchange Act; and




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          (e) to negotiate the terms of the Underwriting Agreement providing for the sale of the Capital
Securities.




Section 4.3 Right to Proceed.




          The Sponsor acknowledges the rights of the Holders of Capital Securities, in the event that a
failure of the Trust to pay Distributions on the Capital Securities is attributable to the failure
of the Company to pay interest or principal on the Notes, to institute a proceeding directly
against the Note Issuer for enforcement of its payment obligations on the Notes.




ARTICLE V

TRUSTEES




Section 5.1 Number of Trustees: Appointment of Co-Trustee.




          The number of Trustees initially shall be five (5), and:




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




          (b) after the issuance of any Securities, the number of Trustees may be increased or decreased
by vote of the Holders of a Majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities;




          provided, however, that, the number of Trustees shall in no event be less than two
(2); provided further that (1) if required by the Statutory Trust Act, one Trustee,
in the case of a natural person, shall be a person who is a resident of the State of Delaware or
that, if not a natural person, is an entity which has its principal place of business in the State
of Delaware (the “Delaware Trustee”); (2) there shall be at least one Trustee who is an employee or
officer of, or is affiliated with the Sponsor (an “Administrative Trustee”); and (3) one Trustee
shall be the Property Trustee for so long as this Trust Agreement is required to qualify as an
indenture under the Trust Indenture Act, and such Property Trustee may also serve as Delaware
Trustee if it meets the applicable requirements. Notwithstanding the above, unless an Event of
Default shall have occurred and be continuing, at any time or times, for the purpose of meeting the
legal requirements of the Trust Indenture Act or of any jurisdiction in which any part of the
Trust’s property may at the time be located, the Holders of a Majority in liquidation amount of the
Common Securities acting as a class at a meeting of the Holders of the Common Securities, and the
Administrative Trustees shall have power to appoint one or more Persons either to act as a
co-trustee, jointly with the Property Trustee, of all or any part of the Trust’s property, or to
act as separate trustee of any such property, in either case with such powers as may be provided in
the instrument of appointment, and to vest in such Person or Persons in such capacity any property,
title, right or power deemed necessary or desirable, subject to the provisions of this Trust
Agreement. In case an Event of Default has occurred and is continuing, the Property Trustee alone
shall have power to make any such appointment of a co-trustee.





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Section 5.2 Delaware Trustee.




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




          (a) a natural person who is a resident of the State of Delaware; or




          (b) if not a natural person, an entity which has its principal place of business in the State
of Delaware, and otherwise meets the requirements of applicable law,



provided that, if the Property Trustee has its principal place of business in the
State of Delaware and otherwise meets the requirements of applicable law, then the Property Trustee
shall also be the Delaware Trustee and Section 3.11 shall have no application.




Section 5.3 Property Trustee; Eligibility.




          (a) There shall at all times be one Trustee (the “Property Trustee”) which shall act as
Property Trustee which shall:





          (i) not be an Affiliate of the Sponsor; and




          (ii) be a corporation organized and doing business under the laws of the United States
of America or any State or Territory thereof or of the District of Columbia, or a
corporation or Person permitted by the Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least 50 million U.S. dollars ($50,000,000), and
subject to supervision or examination by federal, state, territorial or District of Columbia
authority. If such corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the supervising or examining authority referred to above,
then for the purposes of this Section 5.3(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published.



          (b) If at any time the Property Trustee shall cease to be eligible to so act under Section
5.3(a), the Property Trustee shall immediately resign in the manner and with the effect set forth
in Section 5.7(c).




          (c) If the Property Trustee has or shall acquire any “conflicting interest” within the meaning
of Section 310(b) of the Trust Indenture Act, the Property Trustee and the Holder of the Common
Securities (as if it were the obligor referred to in Section 310(b) of the Trust Indenture Act)
shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act.




          (d) The Capital Securities Guarantee shall be deemed to be specifically described in this
Trust Agreement for purposes of clause (i) of the first provision contained in Section 310(b) of
the Trust Indenture Act.




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          (e) The initial Property Trustee shall be:





The Bank of New York

101 Barclay Street

21st Floor

New York, New York 10286

Attention: Corporate Trust Trustee Administration



Section 5.4 Certain Qualifications of Administrative Trustees and Delaware Trustee Generally.




          Each Administrative Trustee and the Delaware Trustee (unless the Property Trustee also acts as
Delaware Trustee) shall be either a natural person who is at least 21 years of age or a legal
entity that shall act through one or more Authorized Officers.




Section 5.5 Administrative Trustees.




          The initial Administrative Trustees shall be:





Thomas Cestare

Larry K. Davis

Thomas R. Brugger



          (a) Except as expressly set forth in this Trust Agreement and except if a meeting of the
Administrative Trustees is called with respect to any matter over which the Administrative Trustees
have power to act, any power of the Administrative Trustees may be exercised by, or with the
consent of, any one such Administrative Trustee.




          (b) Unless otherwise determined by the Administrative Trustees, and except as otherwise
required by the Statutory Trust Act or applicable law, any Administrative Trustee is authorized to
execute on behalf of the Trust any documents which the Administrative Trustees have the power and
authority to cause the Trust to execute pursuant to Section 3.6, provided, that,
the registration statement referred to in Section 3.6, including any amendments thereto, shall be
signed by all of the Administrative Trustees; and




          (c) An Administrative Trustee may, by power of attorney consistent with applicable law,
delegate to any other natural person over the age of 21 his or her power for the purposes of
signing any documents which the Administrative Trustees have power and authority to cause the Trust
to execute pursuant to Section 3.6.




Section 5.6 Delaware Trustee.





The initial Delaware Trustee shall be:




The Bank of New York (Delaware)

23 White Clay Center

Route 273

Newark, Delaware 19711




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Section 5.7 Appointment, Removal and Resignation of Trustees.




          (a) Subject to Section 5.7(b) and to Section 6(b) of Annex I hereto, Trustees may be appointed
or removed without cause at any time:





          (i) until the issuance of any Securities, by written instrument executed by the
Sponsor;




          (ii) unless an Event of Default shall have occurred and be continuing after the
issuance of any Securities, by vote of the Holders of a Majority in liquidation amount of
the Common Securities voting as a class at a meeting of the Holders of the Common
Securities; and




          (iii) if an Event of Default shall have occurred and be continuing after the issuance
of the Securities, with respect to the Property Trustee or the Delaware Trustee, by vote of
Holders of a Majority in liquidation amount of the Capital Securities voting as a class at a
meeting of Holders of the Capital Securities.



          (b)





          (i) The Trustee that acts as Property Trustee shall not be removed in accordance with
Section 5.7(a) until a Successor Property Trustee (“Successor Property Trustee”) has been
appointed and has accepted such appointment by written instrument executed by such Successor
Property Trustee and delivered to the Administrative Trustees and the Sponsor; and




          (ii) the Trustee that acts as Delaware Trustee shall not be removed in accordance with
this Section 5.7(a) until a successor Trustee possessing the qualifications to act as
Delaware Trustee under Sections 5.2 and 5.4 (a “Successor Delaware Trustee”) has been
appointed and has accepted such appointment by written instrument executed by such Successor
Delaware Trustee and delivered to the Administrative Trustees and the Sponsor.



          (c) A Trustee appointed to office shall hold office until his successor shall have been
appointed or until his death, removal or resignation. Any Trustee may resign from office (without
need for prior or subsequent accounting) by an instrument in writing signed by the Trustee and
delivered to the Sponsor and the Trust, which resignation shall take effect upon such delivery or
upon such later date as is specified therein; provided, however, that:





          (i) No such resignation of the Trustee that acts as the Property Trustee shall be
effective:




          (A) until a Successor Property Trustee has been appointed and has accepted such
appointment by instrument executed by such Successor Property Trustee and delivered
to the Trust, the Sponsor and the resigning Property Trustee; or



28









 






          (B) until the assets of the Trust have been completely liquidated and the
proceeds thereof distributed to the Holders; and




          (ii) no such resignation of the Trustee that acts as the Delaware Trustee shall be
effective until a Successor Delaware Trustee has been appointed and has accepted such
appointment by instrument executed by such Successor Delaware Trustee and delivered to the
Trust, the Sponsor and the resigning Delaware Trustee.



          (d) The Holders of the Common Securities or, if an Event of Default shall have occurred and be
continuing after the issuance of the Securities, the Holders of the Capital Securities, shall use
their best efforts to promptly appoint a Successor Delaware Trustee or Successor Property Trustee,
as the case may be, if the Property Trustee or the Delaware Trustee delivers an instrument of
resignation in accordance with this Section 5.7.




          (e) If no Successor Property Trustee or Successor Delaware Trustee shall have been appointed
and accepted appointment as provided in this Section 5.7 within 30 days after delivery of an
instrument of resignation or removal, the Property Trustee or Delaware Trustee resigning or being
removed, as applicable, may petition, at the expense of the Note Issuer, any court of competent
jurisdiction for appointment of a Successor Property Trustee or Successor Delaware Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem proper and prescribe,
appoint a Successor Property Trustee or Successor Delaware Trustee, as the case may be.




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




Section 5.8 Vacancies among Trustees.




          If a Trustee ceases to hold office for any reason and the number of Trustees is not reduced
pursuant to Section 5.1, or if the number of Trustees is increased pursuant to Section 5.1, a
vacancy shall occur. A resolution certifying the existence of such vacancy by the Administrative
Trustees or, if there are more than two, a majority of the Administrative Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be filled with a Trustee
appointed in accordance with Section 5.7.




Section 5.9 Effect of Vacancies.




          The death, resignation, retirement, removal, bankruptcy, dissolution, liquidation,
incompetence or incapacity to perform the duties of a Trustee shall not operate to dissolve,
terminate or annul the Trust. Whenever a vacancy in the number of Administrative Trustees shall
occur, until such vacancy is filled by the appointment of an Administrative Trustee in accordance
with Section 5.7, the Administrative Trustees in office, regardless of their number, shall have all
the powers granted to the Administrative Trustees and shall discharge all the duties imposed upon
the Administrative Trustees by this Trust Agreement.




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Section 5.10 Meetings.




          If there is more than one Administrative Trustee, meetings of the Administrative Trustees
shall be held from time to time upon the call of any Administrative Trustee. Regular meetings of
the Administrative Trustees may be held at a time and place fixed by resolution of the
Administrative Trustees. Notice of any in-person meetings of the Administrative Trustees shall be
hand delivered or otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 24 hours before such meeting. Notice of any telephonic meetings
of the Administrative Trustees or any committee thereof shall be hand delivered or otherwise
delivered in writing (including by facsimile, with a hard copy by overnight courier) not less than
24 hours before a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by telephone) of an
Administrative Trustee at a meeting shall constitute a waiver of notice of such meeting except
where an Administrative Trustee attends a meeting for the express purpose of objecting to the
transaction of any activity on the ground that the meeting has not been lawfully called or
convened. Unless provided otherwise in this Trust Agreement, any action of the Administrative
Trustees may be taken at a meeting by vote of a majority of the Administrative Trustees present
(whether in person or by telephone) and eligible to vote with respect to such matter, provided that
a Quorum is present, or without a meeting by the unanimous written consent of the Administrative
Trustees. In the event there is only one Administrative Trustee, any and all action of such
Administrative Trustee shall be evidenced by a written consent of such Administrative Trustee.




Section 5.11 Delegation of Power.




          (a) Any Administrative Trustee may, by power of attorney consistent with applicable law,
delegate to any other natural person over the age of 21 his or her power for the purpose of
executing any documents contemplated in Section 3.6, including any registration statement or
amendment thereto filed with the Commission, or making any other governmental filing; and




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




Section 5.12 Merger, Conversion, Consolidation or Succession to Business.




          Any Person into which the Property Trustee or the Delaware Trustee or any Administrative
Trustee that is not a natural person, as the case may be, may be merged or converted or with which
it may be consolidated, or any Person resulting from any merger, conversion or consolidation to
which the Property Trustee or the Delaware Trustee, as the case may be, shall be a party, or any
Person succeeding to all or substantially all the corporate trust business of the Property Trustee
or the Delaware Trustee, as the case may be, shall be the successor of the Property Trustee or the
Delaware Trustee, as the case may be, hereunder, provided such Person shall be otherwise qualified
and eligible under this Article, without the execution or filing of any paper or any further act on
the part of any of the parties hereto.




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ARTICLE VI

DISTRIBUTIONS




Section 6.1 Distributions.




          (a) Holders shall receive Distributions in accordance with the applicable terms of the
relevant Holder’s Securities. If and to the extent that the Note Issuer makes a payment of
interest (including Compounded Interest (as defined in the Indenture)), premium and/or principal on
the Notes held by the Property Trustee or any other payments with respect to the Notes held by the
Property Trustee (the amount of any such payment being a “Payment Amount”), the Property Trustee
shall and is directed, to the extent funds are available for that purpose, to make a distribution
(a “Distribution”) of the Payment Amount to Holders.




          (b) Payment of Distributions on, any payment of the Redemption Price upon a redemption of, and
the any liquidation distribution in respect of, the Securities shall be made on a Pro Rata basis
based on the aggregate liquidation amount of the outstanding Securities; provided that if, on any
date on which payment of a Distribution or the Redemption Price is to be made, an Indenture Event
of Default has occurred and is continuing, then such payment shall not be made on any of the Common
Securities, and no other payment on account of the redemption, liquidation or other acquisition of
such Common Securities shall be made, until all accumulated and unpaid Distributions or payments of
the Redemption Price, as the case may be, on all of the outstanding Capital Securities for which
Distributions are to be paid or that have been called for redemption, as the case may be, are fully
paid. All funds available to the Property Trustee shall first be applied to the payment in full in
cash of all Distributions on, or the Redemption Price of, the Capital Securities then due and
payable.




Section 6.2 Distribution of Notes in Exchange for Securities.




          (a) Provided that OTS approval is obtained, if then required, the Sponsor may, at any time,
dissolve the Trust and, after satisfaction of liabilities to creditors of the Trust as provided by
applicable law, cause the Notes held by the Property Trustee to be distributed to the Holders in
liquidation of such Holders’ interests in the Trust on a Pro Rata basis, upon not less than 30 nor
more than 60 days notice, and, simultaneous with such distribution, to cause a Like Amount of the
Securities to be exchanged by the Trust on a Pro Rata basis.




          (b) Notice of any distribution of Notes in exchange for the Securities (a “Note Distribution
Notice”), which notice shall be irrevocable, shall be given by the Trust by mail to each Holder of
Securities not fewer than 30 nor more than 60 days before the date of distribution of the Notes. A
Note Distribution Notice shall be deemed to be given on the day such notice is first mailed by
first-class mail, postage prepaid, to Holders. No defect in the Note Distribution Notice or in the
mailing of the Note Distribution Notice with respect to any Holder shall affect the validity of the
exchange proceedings with respect to any other Holder.




          Each Note Distribution Notice shall be sent by the Property Trustee on behalf of the Trust to:




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          (i) in respect of the Capital Securities, the Clearing Agency or its nominee (or any
successor Clearing Agency or its nominee) if the Global Capital Securities have been issued
or the Holders thereof if Definitive Capital Securities have been issued, and




          (ii) in respect of the Common Securities, the Holder (or Holders) thereof.



          (c) On and from the date fixed by the Property Trustee for any distribution of Notes and
liquidation of the Trust:





          (i) the Securities no longer shall be deemed to be outstanding;




          (ii) the Clearing Agency or its nominee (or any successor Clearing Agency or its
nominee), as the Holder of the Capital Securities, will receive a registered global
certificate or certificates representing the Notes to be delivered upon such distribution;
and




          (iii) any certificates representing Securities not held by the Clearing Agency or its
nominee (or any successor Clearing Agency or its nominee) shall be deemed to represent Notes
having an aggregate principal amount equal to the aggregate liquidation amount of such
Securities and bearing accrued and unpaid interest in an amount equal to the accumulated and
unpaid Distributions on such Securities, until such certificates are presented for
cancellation and exchange, at which time the Note Issuer shall issue and deliver in exchange
therefor, and the Note Trustee shall authenticate, a certificate representing such Notes.



ARTICLE VII

ISSUANCE OF SECURITIES




Section 7.1 General Provisions Regarding Securities.




          (a) The Administrative Trustees shall on behalf of the Trust issue one class of capital
securities representing undivided beneficial interests in the assets of the Trust having such terms
as are set forth in Annex I (the “Capital Securities”) and one class of common securities
representing undivided beneficial interests in the assets of the Trust having such terms as are set
forth in Annex I (the “Common Securities”).




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




          (c) Upon issuance of the Securities as provided in this Trust Agreement, the Securities so
issued shall be deemed to be validly issued, fully paid and non-assessable.




          (d) Every Person, by virtue of having become a Holder or a Capital Security Beneficial Owner
in accordance with the terms of this Trust Agreement, shall be deemed to have expressly assented
and agreed to the terms of, and shall be bound by, this Trust Agreement.




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Section 7.2 Execution and Authentication.




          (a) The Securities shall be signed on behalf of the Trust by an Administrative Trustee by
manual or facsimile signature. In case any Administrative Trustee of the Trust who shall have
signed any of the Securities shall cease to be such Administrative Trustee before the Securities so
signed shall be delivered by the Trust, such Securities nevertheless may be delivered as though the
person who signed such Securities had not ceased to be such Administrative Trustee; and any
Securities may be signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Administrative Trustees of the Trust, although at the date
of the execution and delivery of the Trust Agreement any such person was not such a Administrative
Trustee.




          (b) One Administrative Trustee shall sign the Securities for the Trust by manual or facsimile
signature.




          A Security shall not be valid until authenticated by the manual signature of an authorized
signatory of the Property Trustee. The signature shall be conclusive evidence that the Security
has been authenticated under this Trust Agreement.




          Upon a written order of the Trust signed by one Administrative Trustee, the Property Trustee
shall authenticate the Securities for original issue. The aggregate number of Capital Securities
outstanding at any time shall not exceed the number set forth in the Terms in Annex I hereto except
as provided in Section 7.6.




          The Property Trustee may appoint an authenticating agent acceptable to the Trust to
authenticate Securities. An authenticating agent may authenticate Securities whenever the Property
Trustee may do so. Each reference in this Trust Agreement to authentication by the Property
Trustee includes authentication by such agent. An authenticating agent has the same rights as the
Property Trustee to deal with the Sponsor or an Affiliate.




Section 7.3 Form and Dating.




          The Capital Securities shall be substantially in the form of Exhibit A-1 and the Common
Securities shall be substantially in the form of Exhibit A-2, each of which is hereby incorporated
in and expressly made a part of this Trust Agreement. The Property Trustee’s certificate of
authentication shall be substantially in the form set forth in Exhibits A-1 and A-2. Certificates
representing the Securities may be printed, lithographed or engraved or may be produced in any
other manner as is reasonably acceptable to the Administrative Trustees, as evidenced by their
execution thereof. The Securities may have letters, CUSIP or other numbers, notations or other
marks of identification or designation and such legends or endorsements required by law, stock
exchange rule, agreements to which the Trust is subject, if any, or usage (provided that any such
notation, legend or endorsement is in a form acceptable to the Trust). The Trust at the direction
of the Sponsor shall furnish any such legend not contained in Exhibit A-1 to the Property Trustee
in writing. Each Capital Security shall be dated the date of its authentication. The terms and
provisions of the Securities set forth in Annex I and the forms of Securities set forth in Exhibits
A-1 and A-2 are part of the terms of this Trust Agreement and to the extent applicable, the
Property Trustee and the Sponsor, by their execution and delivery of this Trust Agreement,
expressly agree to such terms and provisions and to be bound thereby.




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          (a) Global Securities. Securities may be issued in the form of one or more permanent
global Securities in definitive, fully registered form without distribution coupons with the
appropriate global legends (a “Global Capital Security”), which shall be deposited on behalf of the
purchasers of the Capital Securities represented thereby with the Property Trustee, at its New York
office, as custodian for the Clearing Agency, and registered in the name of the Clearing Agency or
a nominee of the Clearing Agency, duly executed by the Trust and authenticated by the Property
Trustee as herein provided. The number of Capital Securities represented by a Global Capital
Security may from time to time be increased or decreased by adjustments made on the records of the
Property Trustee and the Clearing Agency or its nominee as hereinafter provided.




          (b) Book-Entry Provisions. This Section 7.3(b) shall apply only to the Global Capital
Securities and such other Capital Securities in global form as may be authorized by the Trust to be
deposited with or on behalf of the Clearing Agency.




          The Trust shall execute and the Property Trustee shall, in accordance with this Section 7.3,
authenticate and make available for delivery initially one or more Global Capital Securities that
(i) shall be registered in the name of Cede & Co. or other nominee of such Clearing Agency and (ii)
shall be delivered by the Trustee to such Clearing Agency or pursuant to such Clearing Agency’s
written instructions or held by the Property Trustee as custodian for the Clearing Agency.




          Members of, or participants in, the Clearing Agency (“Participants”) shall have no rights
under this Trust Agreement with respect to any Global Capital Security held on their behalf by the
Clearing Agency or by the Property Trustee as the custodian of the Clearing Agency or under such
Global Capital Security, and the Clearing Agency may be treated by the Trust, the Property Trustee
and any agent of the Trust or the Property Trustee as the absolute owner of such Global Capital
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Trust, the Property Trustee or any agent of the Trust or the Property Trustee from giving
effect to any written certification, proxy or other authorization furnished by the Clearing Agency
or impair, as between the Clearing Agency and its Participants, the operation of customary
practices of such Clearing Agency governing the exercise of the rights of a holder of a beneficial
interest in any Global Capital Security.




          (c) Definitive Capital Securities. Except as provided in Section 7.9 or 9.2(e)(i),
owners of beneficial interests in a Global Capital Security will not be entitled to receive
physical delivery of certificated Capital Securities (“Definitive Capital Securities”).




          (d) Authorized Denominations. The Capital Securities are issuable only in
denominations of $25.00 and any integral multiple thereof.




Section 7.4 Registrar, Paying Agent and Exchange Agent.




          The Trust shall maintain in the Borough of Manhattan, The City of New York, (i) an office or
agency where Capital Securities may be presented for registration of transfer (“Registrar”), (ii)
an office or agency where Capital Securities may be presented for payment (“Paying Agent”) and
(iii) an office or agency where Securities may be presented for exchange (“Exchange Agent”). The
Registrar shall keep a register of the Capital Securities and of their

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transfer. The Trust may appoint the Registrar, the Paying Agent and the Exchange Agent and
may appoint one or more co-registrars, one or more additional paying agents and one or more
additional exchange agents in such other locations as it shall determine. The term “Registrar”
includes any additional registrar, “Paying Agent” includes any additional paying agent and the term
“Exchange Agent” includes any additional exchange agent. The Trust may change any Paying Agent,
Registrar, co-registrar or Exchange Agent without prior notice to any Holder. The Paying Agent
shall be permitted to resign as Paying Agent upon 30 days’ written notice to the Administrative
Trustees. The Trust shall notify the Property Trustee of the name and address of any Agent not a
party to this Trust Agreement. If the Trust fails to appoint or maintain another entity as
Registrar, Paying Agent or Exchange Agent, the Property Trustee shall act as such. The Trust or
any of its Affiliates may act as Paying Agent, Registrar, or Exchange Agent. The Trust shall act
as Paying Agent, Registrar, co-registrar, and Exchange Agent for the Common Securities.




          The Trust initially appoints the Property Trustee as Registrar, Paying Agent, and Exchange
Agent for the Capital Securities.




Section 7.5 Paying Agent to Hold Money in Trust.




          The Trust shall require each Paying Agent other than the Property Trustee to agree in writing
that the Paying Agent will hold in trust for the benefit of Holders or the Property Trustee all
money held by the Paying Agent for the payment of liquidation amounts or Distributions, and will
notify the Property Trustee if there are insufficient funds for such purpose. While any such
insufficiency continues, the Property Trustee may require a Paying Agent to pay all money held by
it to the Property Trustee. The Trust at any time may require a Paying Agent to pay all money held
by it to the Property Trustee and to account for any money disbursed by it. Upon payment over to
the Property Trustee, the Paying Agent (if other than the Trust or an Affiliate of the Trust) shall
have no further liability for the money. If the Trust or the Sponsor or an Affiliate of the Trust
or the Sponsor acts as Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent.




Section 7.6 Replacement Securities.




          If a Holder claims that a Security owned by it has been lost, destroyed or wrongfully taken or
if such Security is mutilated and is surrendered to the Trust, or in the case of the Capital
Securities to the Property Trustee, the Trust shall issue and the Property Trustee shall, upon
written order of the Trust, authenticate a replacement Security if the Property Trustee’s and the
Trust’s requirements, as the case may be, are met. An indemnity bond must be provided by the
Holder which, in the judgment of the Property Trustee, is sufficient to protect the Trustees, the
Sponsor, the Trust or any authenticating agent from any loss which any of them may suffer if a
Security is replaced. The Trust may charge such Holder for its expenses in replacing a Security.




          Every replacement Security is an additional beneficial interest in the Trust.




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Section 7.7 Outstanding Capital Securities.




          The Capital Securities outstanding at any time are all the Capital Securities authenticated by
the Property Trustee except for those cancelled by it, those delivered to it for cancellation, and
those described in this Section as not outstanding.




          If a Capital Security is paid, purchased or replaced pursuant to Section 7.6 hereof, it ceases
to be outstanding unless the Property Trustee receives proof satisfactory to it that the replaced,
paid or purchased Capital Security is held by a bona fide purchaser.




          If Capital Securities are considered paid in accordance with the terms of this Trust
Agreement, they cease to be outstanding and Distributions on them shall cease to accumulate.




          A Capital Security does not cease to be outstanding because one of the Trust, the Sponsor or
an Affiliate of the Sponsor holds the Security.




Section 7.8 Capital Securities in Treasury.




          In determining whether the Holders of the required amount of Securities have concurred in any
direction, waiver or consent, Capital Securities owned by the Trust, the Sponsor or an Affiliate of
the Sponsor, as the case may be, shall be disregarded and deemed not to be outstanding, except that
for the purposes of determining whether the Property Trustee shall be fully protected in relying on
any such direction, waiver or consent, only Securities which a Responsible Officer of the Property
Trustee actually knows are so owned shall be so disregarded.




Section 7.9 Temporary Securities.




          (a) Until Definitive Securities are ready for delivery, the Trust may prepare and, in the case
of the Capital Securities, the Property Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of Definitive Securities but may have variations that
the Trust considers appropriate for temporary Securities. Without unreasonable delay, the Trust
shall prepare and, in the case of the Capital Securities, the Property Trustee shall authenticate
Definitive Securities in exchange for temporary Securities.




          (b) A Global Capital Security deposited with the Clearing Agency or with the Property Trustee
as custodian for the Clearing Agency pursuant to Section 7.3 shall be transferred to the beneficial
owners thereof in the form of certificated Capital Securities only if such transfer complies with
Section 9.2 and (i) the Clearing Agency notifies the Sponsor that it is unwilling or unable to
continue as Clearing Agency for such Global Capital Security or if at any time such Clearing Agency
ceases to be a “clearing agency” registered under the Exchange Act and a clearing agency is not
appointed by the Sponsor within 90 days of such notice, (ii) a Default or an Event of Default has
occurred and is continuing or (iii) the Trust at its sole discretion elects to cause the issuance
of certificated Capital Securities.




          (c) Any Global Capital Security that is transferable to the beneficial owners thereof in the
form of certificated Capital Securities pursuant to this Section 7.9 shall be surrendered by the
Clearing Agency to the Property Trustee located in the Borough of Manhattan, The City of New York,
to be so transferred, in whole or from time to time in part,

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without charge, and the Property Trustee shall authenticate and make available for delivery,
upon such transfer of each portion of such Global Capital Security, an equal aggregate liquidation
amount of Securities of authorized denominations in the form of certificated Capital Securities.
Any portion of a Global Capital Security transferred pursuant to this Section shall be registered
in such names as the Clearing Agency shall direct.




          (d) Subject to the provisions of Section 7.9(c), the Holder of a Global Capital Security may
grant proxies and otherwise authorize any Person, including Participants and Persons that may hold
interests through Participants, to take any action which such Holder is entitled to take under this
Trust Agreement or the Securities.




          (e) In the event of the occurrence of any of the events specified in Section 7.9(b), the Trust
will promptly make available to the Property Trustee a reasonable supply of certificated Capital
Securities in fully registered form without distribution coupons.




Section 7.10 Cancellation.




          The Trust at any time may deliver Capital Securities to the Property Trustee for cancellation.
The Registrar, Paying Agent and Exchange Agent shall forward to the Property Trustee any Capital
Securities surrendered to them for registration of transfer, redemption, exchange or payment. The
Property Trustee shall promptly cancel all Capital Securities, surrendered for registration of
transfer, redemption, exchange, payment, replacement or cancellation and shall dispose of cancelled
Capital Securities as the Trust directs, provided that the Property Trustee shall not be obligated
to destroy Capital Securities. The Trust may not issue new Capital Securities to replace Capital
Securities that it has paid or that have been delivered to the Property Trustee for cancellation or
that any Holder has exchanged.




Section 7.11 CUSIP Numbers.




          The Trust in issuing the Capital Securities may use “CUSIP” numbers (if then generally in
use), and, if so, the Property Trustee shall use “CUSIP” numbers in notices of redemption as a
convenience to Holders of Capital Securities; provided that any such notice may state that
no representation is made as to the correctness of such numbers either as printed on the Capital
Securities or as contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Capital Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Sponsor will promptly notify the
Property Trustee of any change in the CUSIP numbers.




ARTICLE VIII

TERMINATION OF TRUST




Section 8.1 Termination of Trust.




          (a) The Trust shall automatically terminate:





          (i) upon the bankruptcy of the Sponsor;



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          (ii) upon the filing of a certificate of dissolution or liquidation or its equivalent
with respect to the Sponsor; or the revocation of the Sponsor’s charter and the expiration
of 90 days after the date of revocation without a reinstatement thereof;




          (iii) upon the consent of the Holders of at least a Majority in aggregate liquidation
amount of the Capital Securities and Common Securities voting together as a single class to
dissolve the Trust;




          (iv) following the distribution of a Like Amount (as defined in Annex I hereto) of the
Notes to the Holders, provided that, the Property Trustee has received
written notice from the Sponsor directing the Property Trustee to terminate the Trust (which
direction is optional, and except as otherwise expressly provided below, within the
discretion of the Sponsor) and provided, further, that such direction and
such distribution is conditioned on the receipt by the Sponsor of any required regulatory
approval;




          (v) upon the entry of a decree of judicial dissolution of the Sponsor or the Trust by
a court of competent jurisdiction;




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




          (vii) upon the repayment of the Notes or at such time as no Notes are outstanding; or




          (viii) the expiration of the term of the Trust provided in Section 3.14.



          (b) As soon as is practicable after the occurrence of an event referred to in Section 8.1(a),
the Administrative Trustees shall file a certificate of cancellation with the Secretary of State of
the State of Delaware.




          (c) The provisions of Section 3.9 and Article X shall survive the termination of the Trust.




Section 8.2 Liquidation Distribution Upon Dissolution or Termination of the Trust.




          (a) In the event of any voluntary or involuntary dissolution or termination of the Trust
pursuant to Section 8.1(a)(i), 8.1(a)(ii), 8.1(a)(iii), 8.1(a)(iv), or 8.1(a)(v) (each a
“Liquidation”), the Trust shall be liquidated by the Administrative Trustees as expeditiously as
the Administrative Trustees determine to be possible by distributing to the Holders, after
satisfaction of liabilities to creditors of the Trust, if any, as provided by applicable law, Notes
in an aggregate principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the Distribution rate of, and accrued and unpaid interest equal to
accumulated and unpaid Distributions on, such Securities in exchange for such Securities.




          (b) If, notwithstanding the other provisions of this Section 8.2, distribution of the Notes in
the manner set forth in Section 8.2(a) is determined by the Property Trustee not to be practical,
the assets of the Trust shall be liquidated, and the Trust shall be wound-up by the

38









 








Property Trustee in such manner as the Property Trustee determines. In such event, the
Holders shall be entitled to receive out of the assets of the Trust available for distribution to
the Holders, after satisfaction of liabilities to creditors of the Trust as provided by applicable
law, an amount equal to the liquidation amount of the Securities plus accumulated and unpaid
Distributions thereon to the date of payment (such amount being the “Liquidation Distribution”).
If, upon any such Liquidation, the Liquidation Distribution can be paid only in part because the
Trust has insufficient assets available to pay the aggregate Liquidation Distribution in full, then
the amounts payable directly by the Trust on the Securities shall be paid on a Pro Rata basis,
provided that if an Indenture Event of Default has occurred and is continuing, then the Capital
Securities shall have a preference over the Common Securities with regard to the Liquidation
Distribution.




          (c) Notice of any distribution of Notes in exchange for the Securities (an “Exchange Notice”),
which notice shall be irrevocable, shall be given by the Administrative Trustees on behalf of the
Trust by mail to each Holder at least 30 but no more than 60 days before the date fixed for such
distribution. For purposes of the calculation of the date of distribution and the dates on which
notices are given pursuant to this Section 8.2(c), an Exchange Notice shall be deemed to be given
on the day such notice is first mailed by first-class mail, postage prepaid, to the Holders. Each
Exchange Notice shall be addressed to the Holders at the address of each such Holder appearing on
the books and records of the Trust. No defect in the Exchange Notice or in the mailing thereof
with respect to any Holder shall affect the validity of the distribution proceedings with respect
to any other Holder.




          (d) On and after the date fixed for any distribution of Notes upon dissolution of the Trust:





          (i) the Securities no longer shall be deemed to be outstanding;




          (ii) the Clearing Agency or its nominee (or any successor Clearing Agency or its
nominee), as the Holder of the Capital Securities, will receive a registered global
certificate or certificates representing the Notes to be delivered upon such distribution;
and




          (iii) any certificates representing Securities not held by the Clearing Agency or its
nominee (or any successor Clearing Agency or its nominee) shall be deemed to represent Notes
having an aggregate principal amount equal to the aggregate liquidation amount of such
Securities and bearing accrued and unpaid interest in an amount equal to the accumulated and
unpaid Distributions on such Securities, until such certificates are presented for exchange,
transfer, or reissuance, at which time the Note Issuer shall issue, and the Note Trustee
shall authenticate, a certificate representing such Notes.




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ARTICLE IX

TRANSFER OF INTERESTS




Section 9.1 Transfer of Securities.




          (a) Securities may only be transferred, in whole or in part, in accordance with the terms and
conditions set forth in this Trust Agreement and in the terms of the Securities. Any transfer or
purported transfer of any Security not made in accordance with this Trust Agreement shall be null
and void.




          (b) Subject to this Article IX, Capital Securities may only be transferred, in whole or in
part, in accordance with the terms and conditions set forth in this Trust Agreement. Any transfer
or purported transfer of any Security not made in accordance with this Trust Agreement shall be
null and void.




          (c) For so long as the Capital Securities remain outstanding, the Sponsor covenants (i) to
maintain, directly or indirectly, ownership of 100% of the Common Securities of the Trust;
provided, however, that any permitted successor of the Sponsor under the Indenture may succeed to
the Sponsor’s ownership of such Common Securities, (ii) to use reasonable efforts to cause the
Trust (a) to remain a statutory trust, except in connection with the distribution of Notes to the
Holders of Trust Securities in liquidation of the Trust, the redemption of all of the Trust
Securities, or certain mergers, consolidations or amalgamations, each as permitted by this Trust
Agreement, and (b) otherwise not to be treated as an association taxable as
a corporation or partnership for United States federal income tax purposes, (iii) to use its
reasonable efforts to cause each Holder of the Trust Securities to be treated as owning an
undivided beneficial interest in the corresponding Notes, and
(iv) to use reasonable best efforts to ensure that the Trust
will not be an Investment Company required to be registered under the
Investment Company Act.




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




Section 9.2 Transfer Procedures and Restrictions.




          (a) General. No transfer or exchange of a Definitive Capital Security or of an
interest in the Global Capital Security shall be effective unless the transferor delivers to the
Trust


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a certificate in a form substantially similar to that attached hereto as the form of
“Assignment” in Exhibit A-1.




          (b) Transfer and Exchange of Definitive Capital Securities. When Definitive Capital
Securities are presented to the Registrar or co-Registrar





          (x) to register the transfer of such Definitive Capital Securities; or




          (y) to exchange such Definitive Capital Securities which became mutilated, destroyed,
defaced, stolen or lost, for an equal number of Definitive Capital Securities,


the Registrar or co-registrar shall register the transfer or make the exchange as requested if its
reasonable requirements for such transaction are met; provided, however, that the
Definitive Capital Securities surrendered for transfer or exchange shall be duly endorsed or
accompanied by a written instrument of transfer in form reasonably satisfactory to the Trust and
the Registrar or co-registrar, duly executed by the Holder thereof or his attorney duly authorized
in writing.




          (c) Restrictions on Transfer of a Definitive Capital Security for a Beneficial Interest in
a Global Capital Security. A Definitive Capital Security may not be exchanged for a beneficial
interest in a Global Capital Security except upon satisfaction of the requirements set forth below.
Upon receipt by the Property Trustee of a Definitive Capital Security, duly endorsed or
accompanied by appropriate instruments of transfer, in form satisfactory to the Property Trustee,
together with written instructions directing the Property Trustee to make, or to direct the
Clearing Agency to make, an adjustment on its books and records with respect to the appropriate
Global Capital Security to reflect an increase in the number of the Capital Securities represented
by such Global Capital Security, then the Property Trustee shall cancel such Definitive Capital
Security and cause, or direct the Clearing Agency to cause, the aggregate number of Capital
Securities represented by the appropriate Global Capital Security to be increased accordingly. If
no Global Capital Securities are then outstanding, the Trust shall issue and the Property Trustee
shall authenticate, upon written order of any Administrative Trustee, an appropriate number of
Capital Securities in global form.




          (d) Transfer and Exchange of Global Capital Securities. Subject to Section 9.2(e),
the transfer and exchange of Global Capital Securities or beneficial interests therein shall be
effected through the Clearing Agency, in accordance with this Trust Agreement (including applicable
restrictions on transfer set forth herein, if any) and the procedures of the Clearing Agency
therefor.




          (e) Transfer of a Beneficial Interest in a Global Capital Security for a Definitive
Capital Security.





          (i) Any Person having a beneficial interest in a Global Capital Security may upon
request, but only upon 20 days prior notice to the Property Trustee, and if accompanied by
the information specified below, exchange such beneficial interest for a Definitive Capital
Security representing the same number of Capital Securities. Upon receipt by the Property
Trustee from the Clearing Agency or its nominee on behalf of any Person having a beneficial
interest in a Global Capital Security of written instructions or



41








 







such other form of instructions as is customary for the Clearing Agency or the Person
designated by the Clearing Agency as having such a beneficial interest in a Capital Security
and a certification from the transferor (in a form substantially similar to that attached
hereto as the form of “Assignment” in Exhibit A-1), which may be submitted by facsimile,
then the Property Trustee will cause the aggregate number of Capital Securities represented
by Global Capital Securities to be reduced on its books and records and, following such
reduction, the Trust will execute and the Property Trustee will authenticate and make
available for delivery to the transferee a Definitive Capital Security.




          (ii) Definitive Capital Securities issued in exchange for a beneficial interest in a
Global Capital Security pursuant to this Section 9.2(e) shall be registered in such names
and in such authorized denominations as the Clearing Agency, pursuant to instructions from
its Clearing Agency Participants or otherwise, shall instruct the Property Trustee in
writing. The Property Trustee shall deliver such Capital Securities to the Persons in whose
names such Capital Securities are so registered in accordance with such instructions of the
Clearing Agency.



          (f) Restrictions on Transfer and Exchange of Global Capital Securities.
Notwithstanding any other provisions of this Trust Agreement (other than the provisions set forth
in subsection (g) of this Section 9.2), a Global Capital Security may not be transferred as a whole
except by the Clearing Agency to a nominee of the Clearing Agency or another nominee of the
Clearing Agency or by the Clearing Agency or any such nominee to a successor Clearing Agency or a
nominee of such successor Clearing Agency.




          (g) Authentication of Definitive Capital Securities. If at any time:





          (i) there occurs a Default or an Event of Default which is continuing, or




          (ii) the Trust, in its sole discretion, notifies the Property Trustee in writing that
it elects to cause the issuance of Definitive Capital Securities under this Trust Agreement,


then the Trust will execute, and the Property Trustee, upon receipt of a written order of the Trust
signed by one Administrative Trustee requesting the authentication and delivery of Definitive
Capital Securities to the Persons designated by the Trust, will authenticate and make available for
delivery Definitive Capital Securities, equal in number to the number of Capital Securities
represented by the Global Capital Securities, in exchange for such Global Capital Securities.




          (h) Cancellation or Adjustment of Global Capital Security. At such time as all
beneficial interests in a Global Capital Security have either been exchanged for Definitive Capital
Securities to the extent permitted by this Trust Agreement or redeemed, repurchased or canceled in
accordance with the terms of this Trust Agreement, such Global Capital Security shall be returned
to the Clearing Agency for cancellation or retained and canceled by the Property Trustee. At any
time prior to such cancellation, if any beneficial interest in a Global Capital Security is
exchanged for Definitive Capital Securities, Capital Securities represented by such Global Capital
Security shall be reduced and an adjustment shall be made on the books and records of the Clearing
Agency and the Registrar, to reflect such reduction.




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          (i) Obligations with Respect to Transfers and Exchanges of Capital Securities.





     1. To permit registrations of transfers and exchanges, the Trust shall execute and the
Property Trustee shall authenticate Definitive Capital Securities and Global Capital
Securities at the Registrar’s or co-registrar’s request in accordance with the terms of this
Trust Agreement.




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




     3. The Registrar or co-registrar shall not be required to register the transfer of or
exchange of (a) Capital Securities during a period beginning at the opening of business 15
days before the day of mailing of a notice of redemption or any notice of selection of
Capital Securities for redemption and ending at the close of business on the day of such
mailing; or (b) any Capital Security so selected for redemption in whole or in part, except
the unredeemed portion of any Capital Security being redeemed in part.




     4. Prior to the due presentation for registration of transfer of any Capital Security,
the Trust, the Property Trustee, the Paying Agent, the Registrar or any co-registrar may
deem and treat the Person in whose name a Capital Security is registered as the absolute
owner of such Capital Security for the purpose of receiving Distributions on such Capital
Security and for all other purposes whatsoever, and none of the Trust, the Property Trustee,
the Paying Agent, the Registrar or any co-registrar shall be affected by notice to the
contrary.




     5. All Capital Securities issued upon any transfer or exchange pursuant to the terms of
this Trust Agreement shall evidence the same security and shall be entitled to the same
benefits under this Trust Agreement as the Capital Securities surrendered upon such transfer
or exchange.



          (j) No Obligation of the Property Trustee.





     1. The Property Trustee shall have no responsibility or obligation to any beneficial
owner of a Global Capital Security, a Clearing Agency Participant in the Clearing Agency or
other Person with respect to the accuracy of the records of the Clearing Agency or its
nominee or of any Clearing Agency Participant thereof, with respect to any ownership
interest in the Capital Securities or with respect to the delivery to any Clearing Agency
Participant, beneficial owner or other Person (other than the Clearing Agency) of any notice
(including any notice of redemption) or the payment of any amount, under or with respect to
such Capital Securities. All notices and communications to be given to the Holders and all
payments to be made to Holders under the Capital Securities shall be given or made only to
or upon the order of the registered Holders (which shall be the Clearing Agency or its
nominee in the case of a Global Capital Security). The rights of beneficial owners in any
Global Capital Security shall be exercised only through the Clearing Agency, subject to the
applicable rules and



43









 







procedures of the Clearing Agency. The Property Trustee may conclusively rely and
shall be fully protected in relying upon information furnished by the Clearing Agency or any
agent thereof with respect to its Clearing Agency Participants and any beneficial owners.




     2. The Property Trustee and the Registrar shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed under this
Trust Agreement or under applicable law with respect to any transfer of any interest in any
Capital Security (including any transfers between or among Clearing Agency Participants or
beneficial owners in any Global Capital Security) other than to require delivery of such
certificates and other documentation or evidence as are expressly required by, and to do so
if and when expressly required by, the terms of this Trust Agreement, and to examine the
same to determine substantial compliance as to form with the express requirements hereof.



          (k) Minimum Transfers. Capital Securities may only be transferred in minimum blocks
of $25 aggregate liquidation amount. Any transfer of Capital Securities in a block having an
aggregate liquidation amount of less than $25 shall be deemed to be void and of no legal effect
whatsoever. Any such transferee shall be deemed not to be a Holder of such Capital Securities for
any purpose, including, but not limited to, the receipt of Distributions on such Capital
Securities, and such transferee shall be deemed to have no interest whatsoever in such Capital
Securities.




Section 9.3 Deemed Security Holders.




          The Trustees may treat the Person in whose name any Security shall be registered on the books
and records of the Trust as the sole owner of such Security for purposes of receiving Distributions
and for all other purposes whatsoever and, accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such Security on the part of any Person, whether or not
the Trust shall have actual or other notice thereof.




Section 9.4 Book Entry Interests.




          Global Capital Securities shall initially be registered on the books and records of the Trust
in the name of Cede & Co., the nominee of the Clearing Agency, and no Capital Security Beneficial
Owner will receive a definitive Capital Security Certificate representing such Capital Security
Beneficial Owner’s interests in such Global Capital Securities, except as provided in Section 9.2
and Section 7.9. Unless and until definitive, fully registered Capital Securities certificates
have been issued to the Capital Security Beneficial Owners pursuant to Section 9.2 and Section 7.9:




          (a) the provisions of this Section 9.4 shall be in full force and effect;




          (b) the Trust and the Trustees shall be entitled to deal with the Clearing Agency for all
purposes of this Trust Agreement (including the payment of Distributions on the Global Capital
Securities and receiving approvals, votes or consents hereunder) as the Holder of the Capital
Securities and the sole holder of the Global Certificates and shall have no obligation to the
Capital Security Beneficial Owners;




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          (c) to the extent that the provisions of this Section 9.4 conflict with any other provisions
of this Trust Agreement, the provisions of this Section 9.4 shall control; and




          (d) the rights of the Capital Security Beneficial Owners shall be exercised only through the
Clearing Agency and shall be limited to those established by law and agreements between such
Capital Security Beneficial Owners and the Clearing Agency and/or the Clearing Agency Participants
shall receive and transmit payments of Distributions on the Global Certificates to such Clearing
Agency Participants. DTC will make book entry transfers among the Clearing Agency Participants.




Section 9.5 Notices to Clearing Agency.




          Unless and until Definitive Capital Securities have been issued, whenever a notice or other
communication to the Capital Security Holders is required under this Trust Agreement, the Trustees
shall give all such notices and communications specified herein to be given to the Holders of
Global Capital Securities to the Clearing Agency, and shall have no notice obligations to the
Capital Security Beneficial Owners.




Section 9.6 Appointment of Successor Clearing Agency.




          If any Clearing Agency elects to discontinue its services as securities depositary with
respect to the Capital Securities, the Administrative Trustees may, in their sole discretion,
appoint a successor Clearing Agency with respect to such Capital Securities.




ARTICLE X

LIMITATION OF LIABILITY OF

HOLDERS OF SECURITIES, TRUSTEES OR OTHERS




Section 10.1 Liability.




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





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




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



          (b) The Note Issuer shall be liable for all of the debts and obligations of the Trust (other
than in respect of the Securities).




          (c) Pursuant to Section 3803(a) of the Statutory Trust Act, the Holders shall be entitled to
the same limitation of personal liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of Delaware.




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Section 10.2 Exculpation.




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




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




Section 10.3 Fiduciary Duty.




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




          (b) Unless otherwise expressly provided herein:





          (i) whenever a conflict of interest exists or arises between any Covered Persons; or




          (ii) whenever this Trust Agreement or any other agreement contemplated herein or
therein provides that an Indemnified Person shall act in a manner that is, or provides terms
that are, fair and reasonable to the Trust or any Holder of Securities,


the Indemnified Person shall resolve such conflict of interest, take such action or provide such
terms, considering in each case the relative interest of each party (including its own interest) to
such conflict, agreement, transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable generally accepted
accounting practices or principles. In the absence of bad faith by the Indemnified Person, the
resolution, action or term so made, taken or provided by the Indemnified Person shall not
constitute a breach of this Trust Agreement or any other agreement contemplated herein or of any
duty or obligation of the Indemnified Person at law or in equity or otherwise.




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          (c) Whenever in this Trust Agreement an Indemnified Person is permitted or required to make a
decision:





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




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



Section 10.4 Indemnification.




          (a)





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




          (ii) The Note Issuer shall indemnify, to the full extent permitted by law, any Company
Indemnified Person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the Trust to procure a
judgment in its favor by reason of the fact that he is or was a Company Indemnified Person
against expenses (including attorneys’ fees and expenses) actually and reasonably incurred
by him in connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Trust, except that no such indemnification shall be made in respect of any
claim, issue or matter as to which such Company Indemnified Person shall have been adjudged
to be liable to the Trust, unless and only to the extent that the Court of Chancery of
Delaware or the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the circumstances
of the case, such Person is fairly and reasonably entitled to



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indemnity for such expenses which such Court of Chancery or such other court shall deem
proper.




          (iii) To the extent that a Company Indemnified Person shall be successful on the
merits or otherwise (including dismissal of an action without prejudice or the settlement of
an action without admission of liability) in defense of any action, suit or proceeding
referred to in paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any claim,
issue or matter therein, he shall be indemnified, to the full extent permitted by law,
against expenses (including attorneys’ fees) actually and reasonably incurred by him in
connection therewith.




          (iv) Any indemnification under paragraphs (i) and (ii) of this Section 10.4(a) (unless
ordered by a court) shall be made by the Note Issuer only as authorized in the specific case
upon a determination that indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set forth in paragraphs
(i) and (ii). Such determination shall be made (1) by the Administrative Trustees by a
majority vote of a Quorum consisting of such Administrative Trustees who were not parties to
such action, suit or proceeding, (2) if such a Quorum is not obtainable, or, even if
obtainable, if a Quorum of disinterested Administrative Trustees so directs, by independent
legal counsel in a written opinion, or (3) by the Common Security Holder of the Trust.




          (v) Expenses (including attorneys’ fees and expenses) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or investigative action,
suit or proceeding referred to in paragraphs (i) and (ii) of this Section 10.4(a) shall be
paid by the Note Issuer in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such Company Indemnified Person
to repay such amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Note Issuer as authorized in this Section 10.4(a). Notwithstanding the
foregoing, no advance shall be made by the Note Issuer if a determination is reasonably and
promptly made (i) by the Administrative Trustees by a majority vote of a quorum of
disinterested Administrative Trustees, (ii) if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Administrative Trustees so directs, by independent
legal counsel in a written opinion or (iii) the Common Security Holder of the Trust, that,
based upon the facts known to the Administrative Trustees, counsel or the Common Security
Holder at the time such determination is made, such Company Indemnified Person acted in bad
faith or in a manner that such person did not believe to be in or not opposed to the best
interests of the Trust, or, with respect to any criminal proceeding, that such Company
Indemnified Person believed or had reasonable cause to believe his conduct was unlawful. In
no event shall any advance be made in instances where the Administrative Trustees,
independent legal counsel or Common Security Holder reasonably determine that such person
deliberately breached his duty to the Trust or its Common or Capital Security Holders.




          (vi) The indemnification and advancement of expenses provided by, or granted pursuant
to, the other paragraphs of this Section 10.4(a) shall not be deemed exclusive of any other
rights to which those seeking indemnification and advancement of expenses may be entitled
under any agreement, vote of stockholders or disinterested



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directors of the Note Issuer, or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office. All rights to
indemnification under this Section 10.4(a) shall be deemed to be provided by a contract
between the Note Issuer and each Company Indemnified Person who serves in such capacity at
any time while this Section 10.4(a) is in effect. Any repeal or modification of this
Section 10.4(a) shall not affect any rights or obligations then existing.




          (vii) The Note Issuer or the Trust may purchase and maintain insurance on behalf of
any person who is or was a Company Indemnified Person against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as such, whether
or not the Note Issuer would have the power to indemnify him against such liability under
the provisions of this Section 10.4(a).




          (viii) For purposes of this Section 10.4(a), references to “the Trust” shall include,
in addition to the resulting or surviving entity, any constituent entity (including any
constituent of a constituent) absorbed in a consolidation or merger, so that any person who
is or was a director, trustee, officer or employee of such constituent entity, or is or was
serving at the request of such constituent entity as a director, trustee, officer, employee
or agent of another entity, shall stand in the same position under the provisions of this
Section 10.4(a) with respect to the resulting or surviving entity as he would have with
respect to such constituent entity if its separate existence had continued.




          (ix) The indemnification and advancement of expenses provided by, or granted pursuant
to, this Section 10.4(a) shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a Company Indemnified Person and shall inure to
the benefit of the heirs, executors and administrators of such a person.



          (b) The Note Issuer agrees to indemnify the (i) Property Trustee, (ii) the Delaware Trustee,
(iii) any Affiliate of the Property Trustee and the Delaware Trustee, and (iv) any officers,
directors, shareholders, members, partners, employees, representatives, custodians, nominees or
agents of the Property Trustee and the Delaware Trustee (each of the Persons in (i) through (iv)
being referred to as a “Fiduciary Indemnified Person”) for, and to hold each Fiduciary Indemnified
Person harmless against, any and all loss, liability, damage, claim or expense including taxes
(other than taxes based on the income of such Fiduciary Indemnified Person) incurred without
negligence or bad faith on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against or investigating any claim or
liability in connection with the exercise or performance of any of its powers or duties hereunder.
The obligation to indemnify as set forth in this Section 10.4(b) shall survive the satisfaction and
discharge of this Trust Agreement and the resignation or removal of any Fiduciary Indemnified
Person.




Section 10.5 Outside Businesses.




          Any Covered Person, the Sponsor, the Delaware Trustee and the Property Trustee may engage in
or possess an interest in other business ventures of any nature or description, independently or
with others, similar or dissimilar to the business of the Trust, and the Trust and the Holders
shall have no rights by virtue of this Trust Agreement in and to such independent

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ventures or the income or profits derived therefrom, and the pursuit of any such venture, even
if competitive with the business of the Trust, shall not be deemed wrongful or improper. No
Covered Person, the Sponsor, the Delaware Trustee, or the Property Trustee shall be obligated to
present any particular investment or other opportunity to the Trust even if such opportunity is of
a character that, if presented to the Trust, could be taken by the Trust, and any Covered Person,
the Sponsor, the Delaware Trustee and the Property Trustee shall have the right to take for its own
account (individually or as a partner or fiduciary) or to recommend to others any such particular
investment or other opportunity. Any Covered Person, the Delaware Trustee and the Property Trustee
may engage or be interested in any financial or other transaction with the Sponsor or any Affiliate
of the Sponsor, or may act as depositary for, trustee or agent for, or act on any committee or body
of holders of, securities or other obligations of the Sponsor or its Affiliates.




ARTICLE XI

ACCOUNTING




Section 11.1 Fiscal Year.




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




Section 11.2 Certain Accounting Matters.




          (a) At all times during the existence of the Trust, the Administrative Trustees shall keep, or
cause to be kept, full books of account, records and supporting documents, which shall reflect in
reasonable detail, each transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted accounting principles,
consistently applied. The books of account and the records of the Trust shall not be examined by
and reported upon as of the end of each Fiscal Year of the Trust by a firm of independent certified
public accountants.




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




          (c) The Administrative Trustees shall cause to be duly prepared and filed with the appropriate
taxing authority, an annual United States federal income tax return, on a Form 1041 or such other
form required by United States federal income tax law, and any other annual income tax returns
required to be filed by the Administrative Trustees on behalf of the Trust with any state or local
taxing authority.




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Section 11.3 Banking.




          The Trust may maintain one or more bank accounts in the name and for the sole benefit of the
Trust; provided, however, that all payments of funds in respect of the Notes held
by the Property Trustee shall be made directly to the Property Trustee Account and no other funds
of the Trust shall be deposited in the Property Trustee Account. The sole signatories for such
accounts shall be designated by the Administrative Trustees; provided, however,
that the Property Trustee shall designate the signatories for the Property Trustee Account.




Section 11.4 Withholding.




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




ARTICLE XII

AMENDMENTS AND MEETINGS




Section 12.1 Amendments.




          (a) Except as otherwise provided in this Trust Agreement or by any applicable terms of the
Securities, this Trust Agreement may only be amended by a written instrument approved and executed
by:





          (i) the Sponsor;




          (ii) the Administrative Trustees (or if there are more than two Administrative
Trustees a majority of the Administrative Trustees);




          (iii) if the amendment affects the rights, powers, duties, obligations or immunities
of the Property Trustee, the Property Trustee; and




          (iv) if the amendment affects the rights, powers, duties, obligations or immunities of
the Delaware Trustee, the Delaware Trustee.



          (b) No amendment shall be made, and any such purported amendment shall be void and
ineffective:




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          (i) unless, in the case of any proposed amendment, the Property Trustee shall have
first received an Officers’ Certificate from each of the Trust and the Sponsor that such
amendment is permitted by, and conforms to, the terms of this Trust Agreement (including the
terms of the Securities);




          (ii) unless, in the case of any proposed amendment which affects the rights, powers,
duties, obligations or immunities of the Property Trustee, the Property Trustee shall have
first received:




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




          (B) an Opinion of Counsel (who may be counsel to the Sponsor or the Trust) that
such amendment is permitted by, and conforms to, the terms of this Trust Agreement
(including the terms of the Securities) and that all conditions precedent, if any,
in this Trust Agreement to the execution and delivery of such amendment have been
satisfied,




provided, however, that the Property Trustee shall not be required to sign any
such amendment; and




          (iii) to the extent the result of such amendment would be to:




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




          (B) reduce or otherwise adversely affect the powers of the Property Trustee in
contravention of the Trust Indenture Act; or




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



          (c) This Trust Agreement shall not be amended without the consent of the Sponsor, a majority
of the Administrative Trustees and the Holders of at least a Majority in liquidation amount of the
Securities if such amendment would:





          (i) adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to this Trust Agreement or otherwise; or




          (ii) result in the dissolution, winding-up or termination of the Trust other than
pursuant to the terms of this Trust Agreement;


provided that if any amendment referred to in clause (i) above would adversely affect only the
Capital Securities or the Common Securities, then only the Holders of the affected class will be
entitled to vote on such amendment, and such amendment shall not be effective except with the
approval of a Majority in liquidation amount of the Holders of the class of Securities affected
thereby.




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          (d) At such time after the Trust has issued any Securities that remain outstanding, any
amendment that would adversely affect the rights, privileges or preferences of any Holder may be
effected only with such additional requirements as may be set forth in the terms of such
Securities;




          (e) Section 9.1(c) and this Section 12.1 shall not be amended without the consent of all of
the Holders;




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




          (g) The rights of the holders of the Common Securities under Article Five to increase or
decrease the number of, and appoint and remove Trustees shall not be amended without the consent of
the Holders of a Majority in liquidation amount of the Common Securities; and




          (h) Notwithstanding Section 12.1(c), this Trust Agreement may be amended without the consent
of the Holders to:





          (i) cure any ambiguity, correct or supplement any provision in this Trust Agreement
that may be inconsistent with any other provision of this Trust Agreement, or to make any
other provisions with respect to matters or questions arising under this Trust Agreement
which shall not be inconsistent with the other provisions of the Trust Agreement; and




          (ii) to modify, eliminate or add to any provisions of the Trust Agreement to such
extent as shall be necessary to ensure that the Trust will be classified for United States
federal income tax purposes as a grantor trust at all times that any Securities are
outstanding or to ensure that the Trust will not be required to register as an Investment
Company under the Investment Company Act;


provided, however, that in the case of clause (i), such action shall not adversely
affect in any material respect the interests of the Holders, and any amendments of this Trust
Agreement shall become effective when notice thereof is given to the Holders.




Section 12.2 Meetings of the Holders; Action by Written Consent.




          (a) Meetings of the Holders of any class of Securities may be called at any time by the
Administrative Trustees (or as provided in the terms of the Securities) to consider and act on any
matter on which Holders of such class of Securities are entitled to act under the terms of this
Trust Agreement, the terms of the Securities or the rules of any stock exchange on which the
Capital Securities are listed or admitted for trading. The Administrative Trustees shall call a
meeting of the Holders of such class if directed to do so by the Holders of at least 10% in
liquidation amount of such class of Securities. Such direction shall be given by delivering to the
Administrative Trustees one or more notices in writing stating that the signing Holders wish to
call a meeting and indicating the general or specific purpose for which the meeting is to be
called. Any Holders calling a meeting shall specify in writing the Security Certificates held by
the Holders exercising the right to call a meeting and only those Securities specified shall be

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counted for purposes of determining whether the required percentage set forth in the second
sentence of this paragraph has been met.




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





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




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




          (iii) each meeting of the Holders shall be conducted by the Administrative Trustees or
by such other Person that the Administrative Trustees may designate; and




          (iv) unless the Statutory Trust Act, this Trust Agreement, the terms of the
Securities, the Trust Indenture Act or the listing rules of any stock exchange on which the
Capital Securities are then listed or trading, otherwise provides, the Administrative
Trustees, in their sole discretion, shall establish all other provisions relating to
meetings of Holders, including notice of the time, place or purpose of any meeting at which
any matter is to be voted on by any Holders, waiver of any such notice, action by consent
without a meeting, the establishment of a record date, quorum requirements, voting in person
or by proxy or any other matter with respect to the exercise of any such right to vote.



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ARTICLE XIII

REPRESENTATIONS OF PROPERTY TRUSTEE

AND DELAWARE TRUSTEE




Section 13.1 Representations and Warranties of Property Trustee.




          The Trustee that acts as initial Property Trustee represents and warrants to the Trust and to
the Sponsor at the date of this Trust Agreement, and each Successor Property Trustee represents and
warrants to the Trust and the Sponsor at the time of the Successor Property Trustee’s acceptance of
its appointment as Property Trustee that:




          (a) The Property Trustee is a banking corporation with trust powers and authority to execute
and deliver, and to carry out and perform its obligations under the terms of, this Trust Agreement;




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




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




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




Section 13.2 Representations and Warranties of Delaware Trustee.




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




          (a) The Delaware Trustee is duly organized, validly existing and in good standing under the
laws of the State of Delaware, with power and authority to execute and deliver, and to carry out
and perform its obligations under the terms of, this Trust Agreement;




          (b) The execution, delivery and performance by the Delaware Trustee of this Trust Agreement
has been duly authorized by all necessary corporate action on the part of the Delaware Trustee.
This Trust Agreement has been duly executed and delivered by the Delaware Trustee and constitutes a
legal, valid and binding obligation of the Delaware Trustee, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, reorganization,

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moratorium, insolvency, and other similar laws affecting creditors’ rights generally and to
general principles of equity and the discretion of the court (regardless of whether the enforcement
of such remedies is considered in a proceeding in equity or at law);




          (c) No consent, approval or authorization of, or registration with or notice to, any state or
federal banking authority is required for the execution, delivery or performance by the Delaware
Trustee of this Trust Agreement; and




          (d) The Delaware Trustee is a natural person who is a resident of the State of Delaware or, if
not a natural person, an entity which has its principal place of business in the State of Delaware.




ARTICLE XIV

REGISTRATION RIGHTS [INTENTIONALLY OMITTED]




Section 14.1 Registration Rights Agreement. [Intentionally Omitted]




ARTICLE XV

MISCELLANEOUS




Section 15.1 Notices.




          All notices provided for in this Trust Agreement shall be in writing, duly signed by the party
giving such notice, and shall be delivered, telecopied or mailed by first class mail, as follows:




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



Sovereign Capital Trust V

1105 North Market Street

7th Floor

Wilmington, DE 19801



Attention: Administrative Trustee




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



The Bank of New York (Delaware)

23 White Clay Center

Route 273

Newark, Delaware 19711

Attention: Corporate Trust Department




56









 








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



The Bank of New York

101 Barclay Street

21st Floor

New York, New York 10283

Attention: Corporate Trust Trustee Administration




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



Sovereign Bancorp, Inc.

1130 Berkshire Boulevard

Wyomissing, PA 19610



Attention: Chief Financial Officer




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




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




Section 15.2 Governing Law.




          This Trust Agreement and the rights of the parties hereunder shall be governed by and
interpreted in accordance with the laws of the State of Delaware and all rights and remedies shall
be governed by such laws without regard to principles of conflict of laws.




Section 15.3 Intention of the Parties.




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




Section 15.4 Headings.




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




57









 








Section 15.5 Successors and Assigns.




          Whenever in this Trust Agreement any of the parties hereto is named or referred to, the
successors and assigns of such party shall be deemed to be included, and all covenants and
agreements in this Trust Agreement by the Sponsor and the Trustees shall bind and inure to the
benefit of their respective successors and assigns, whether so expressed.




Section 15.6 Partial Enforceability.




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




Section 15.7 Counterparts.




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




[SIGNATURES ON FOLLOWING PAGE]




58









 








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





	 	 	 	 	 
	 
	 	/s/ Thomas Cestare
	 	 	 
	 	 	Thomas Cestare, as Administrative Trustee
	 
	 
	 	/s/ Larry K. Davis
	 	 	 
	 	 	Larry K. Davis, as Administrative Trustee
	 
	 	 	 	 
	 
	 
	 	/s/ Thomas R. Brugger
	 	 	 
	 	 	Thomas R. Brugger, as Administrative Trustee
	 
	 	 	 	 
	 	 	THE BANK OF NEW YORK (Delaware) as Delaware Trustee
	 
	 	 	 	 
	 

	 	By:	 	/s/ Kristine K. Gullo
	 

	 	 	 	 
	 	 	Name:  Kristine K. Gullo
	 	 	Title:  Vice
President
	 
	 	 	 	 
	 	 	THE BANK OF NEW YORK as Property Trustee
	 
	 	 	 	 
	 

	 	By:	 	/s/ Mary LaGumina
	 

	 	 	 	 
	 	 	Name:  Mary LaGumina
	 	 	Title:  Vice
President
	 
	 	 	 	 
	 	 	SOVEREIGN BANCORP, INC., as Sponsor
	 
	 	 	 	 
	 

	 	By:	 	/s/ Mark R. McCollom
	 

	 	 	 	 
	 

	 	 	 	Mark R. McCollom
	 

	 	 	 	Senior Vice President






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ANNEX I




TERMS OF

7.75% CAPITAL SECURITIES

7.75% COMMON SECURITIES




     Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust, dated as of May 22,
2006 (as amended from time to time, the “Trust Agreement”), the designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Securities are set out below (each
capitalized term used but not defined herein has the meaning set forth in the Trust Agreement or,
if not defined in such Trust Agreement, as defined in the Prospectus referred to below in Section
2(c) of this Annex I):



     1. Designation and Number.



          (a) Capital
Securities. Up to 7,360,000 Capital Securities of the Trust with an aggregate
liquidation amount with respect to the assets of the Trust of up to
$184,000,000, and each with a
liquidation amount with respect to the assets of the Trust of $25.00 per Security, are hereby
designated for the purposes of identification only as “7.75% Capital Securities” (collectively, the
“Capital Securities”). The certificates evidencing the Capital Securities shall be substantially
in the form of Exhibit A-1 to the Trust Agreement, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice or to conform to the
rules of any exchange or quotation system on or in which the Capital Securities are listed, traded
or quoted.




          (b) Common
Securities. Up to 240,000 Common Securities of the Trust with an aggregate liquidation
amount with respect to the assets of the Trust of up to $6,000,000 and a liquidation amount with respect
to the assets of the Trust of $25.00 per Security, are hereby designated for the purposes of
identification only as “7.75% Common Securities” (collectively, the “Common Securities”). The
certificates evidencing the Common Securities shall be substantially in the form of Exhibit A-2 to
the Trust Agreement, with such changes and additions thereto or deletions therefrom as may be
required by ordinary usage, custom or practice.




     2. Distributions.



          (a) Distributions payable on each Security will be fixed at a rate per annum of 7.75% (the
“Coupon Rate”) of the liquidation amount of $25.00 per Security (the “Liquidation Amount”), such
rate being the rate of interest payable on the Notes to be held by the Property Trustee.
Distributions in arrears for more than one quarterly period will bear additional distributions
thereon, compounded quarterly, at the Coupon Rate (to the extent permitted by applicable law). The
term “Distributions”, as used herein, includes distributions of any such additional distributions.
A Distribution is payable only to the extent that payments are made in respect of the Notes held by
the Property Trustee and to the extent the Property Trustee has funds on hand legally available
therefor.




          (b) Distributions on the Securities will be cumulative, will accumulate from the most recent
date to which Distributions have been paid or, if no Distributions
have been


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paid, from May 22, 2006, and will be payable quarterly in arrears on February 15, May 15,
August 15 and November 15 of each year, commencing on August 15, 2006 (each, a “Distribution
Date”), except as otherwise described below. Distributions will be computed on the basis of a
360-day year consisting of twelve 30-day months and for any period less than a full calendar month
on the basis of the actual number of days elapsed in such month. The Note Issuer has the right
under the Indenture to defer payments of interest by extending the interest payment period at any
time and from time to time on the Notes for a period not exceeding 20 consecutive quarters,
including the first such quarter during such period (each an “Extension Period”), during which
Extension Period no interest shall be due and payable on the Notes, provided that no Extension
Period shall end on a date other than an Interest Payment Date for the Notes or extend beyond the
Maturity Date of the Notes. As a consequence of such deferral, Distributions will also be
deferred. Despite such deferral, Distributions will continue to accumulate with additional
Distributions thereon (to the extent permitted by applicable law but not at a rate greater than the
rate at which interest is then accruing on the Notes) at the Coupon Rate, compounded quarterly,
during any such Extension Period. Prior to the termination of any such Extension Period, the Note
Issuer may further defer payments of interest by further extending such Extension Period; provided
that such Extension Period, together with all such previous and further extensions within such
Extension Period, may not exceed 20 consecutive quarters, including the first quarter during such
Extension Period, or extend beyond the Maturity Date of the Notes. Upon the termination of any
Extension Period and the payment of all amounts then due, the Note Issuer may commence a new
Extension Period, subject to the above requirements.




          (c) Distributions on the Securities will be payable to the Holders thereof as they appear on
the books and records of the Trust on the fifteenth (15th) day of the month in which the relevant
Distribution Date occurs, which Distribution Dates correspond to the interest payment dates on the
Notes; provided, however, that in the event that the only Holder is DTC or any successor Clearing
Agency, Distributions on the Securities will be payable to the Holder thereof as they appear on the
records of the Trust on the Business Day immediately preceding the relevant Distribution Date.
Subject to any applicable laws and regulations and the provisions of the Trust Agreement, each such
payment in respect of the Capital Securities will be made as described under the heading
“Description of the Capital Securities” in the Prospectus Supplement dated May 15, 2006, of the
Note Issuer and the Trust relating to the Securities and the Notes. The relevant record dates for
the Common Securities shall be the same as the record dates for the Capital Securities.
Distributions payable on any Securities that are not punctually paid on any Distribution Date, as a
result of the Note Issuer having failed to make a payment under the Notes, will cease to be payable
to the Holder on the relevant record date, and such defaulted Distribution will instead be payable
to the Person in whose name such Securities are registered on the special record date or other
specified date determined in accordance with the Indenture. If any date on which Distributions are
payable on the Securities is not a Business Day, then payment of the Distribution payable on such
date will be made on the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay), except that if such next succeeding Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately preceding Business
Day with the same force and effect as if made on such date.




61








 








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




     3. Liquidation Distribution Upon Dissolution.



     In the event of any termination of the Trust or the Sponsor otherwise gives notice of its
election to liquidate the Trust pursuant to Section 8.1(a)(iii) of the Trust Agreement, the Trust
shall be liquidated by the Administrative Trustees as expeditiously as the Administrative Trustees
determine to be possible by distributing, after satisfaction of liabilities to creditors of the
Trust as provided by applicable law, to the Holders a Like Amount (as defined below) of the Notes,
unless such distribution is determined by the Property Trustee not to be practicable, in which
event such Holders will be entitled to receive Pro Rata out of the assets of the Trust legally
available for distribution to Holders, after satisfaction of liabilities to creditors of the Trust
as provided by applicable law, an amount equal to the aggregate of the liquidation amount of $25.00
per Security plus accumulated and unpaid Distributions thereon to the date of payment (such amount
being the “Liquidation Distribution”).



     “Like Amount” means (i) with respect to a redemption of the Securities, Securities having a
Liquidation Amount equal to the principal amount of Notes to be paid in accordance with their terms
and (ii) with respect to a distribution of Notes upon the liquidation of the Trust, Notes having a
principal amount equal to the Liquidation Amount of the Securities of the Holder to whom such Notes
are distributed.



     If, upon any such liquidation, the Liquidation Distribution can be paid only in part because
the Trust has insufficient assets on hand legally available to pay in full the aggregate
Liquidation Distribution, then the amounts payable directly by the Trust on the Securities shall be
paid on a Pro Rata basis.



     4. Redemption and Distribution.



          (a) Upon the repayment of the Notes in whole or in part, at maturity or upon early redemption
(either at the option of the Note Issuer or pursuant to a Special Event, as described below), the
proceeds from such repayment shall be simultaneously applied by the Property Trustee (subject to
the Property Trustee having received notice no later than 40 days prior to such repayment) to
redeem a Like Amount of the Securities at a redemption price equal to (i) in the case of the
repayment of the Notes at maturity, the Maturity Redemption Price (as defined below), (ii) in the
case of the optional redemption of the Notes upon the occurrence and continuation of a Special
Event, the Special Event Redemption Price (as defined below) and (iii) in the case of the optional
redemption of the Notes on or after May 22, 2011, the Optional Redemption Price (as defined below).
The Maturity Redemption Price, the Special Event Redemption Price and the Optional Redemption
Price are referred to collectively as the “Redemption Price”. Holders will be given not less than
30 nor more than 60 days notice of such redemption.




          (b) (i) The “Maturity Redemption Price”, with respect to a redemption of Securities, shall
mean an amount equal to the principal of and accrued and unpaid interest on the Notes as of the
maturity date thereof.




62









 








          (ii) In the case of an optional redemption, if fewer than all the outstanding Securities are
to be so redeemed, the Securities will be redeemed Pro Rata and the Capital Securities to be
redeemed will be determined as described in Section 4(f)(ii) below.



The Note Issuer shall have the right (subject to the conditions in the Indenture) to elect to
redeem the Notes in whole or in part at any time on or after May 22, 2011, upon not less than 30
days and not more than 60 days notice, at the Optional Redemption Price and, simultaneous with such
redemption, to cause a Like Amount of the Securities to be redeemed by the Trust at the Optional
Redemption Price on a Pro Rata basis. “Optional Redemption Price” shall mean a price equal to the
liquidation amount of Securities to be redeemed plus accumulated and unpaid Distributions thereon,
if any, to the date of such redemption.




          (c) If at any time a Tax Event, an Investment Company Event, or a Regulatory Capital Event
(each as defined below, and each a “Special Event”) occurs, the Note Issuer shall have the right
(subject to the conditions set forth in the Indenture) at any time, upon not less than 30 nor more
than 60 days notice, to redeem the Notes in whole, but not in part, within the 90 days following
the occurrence of such Special Event (the “90 Day Period”), and, simultaneous with such redemption,
to cause a Like Amount of the Securities to be redeemed by the Trust at the Special Event
Redemption Price on a Pro Rata basis.




     “Tax Event” shall occur upon receipt by the Note Issuer of an opinion of an independent tax
counsel experienced in tax matters to the effect that, as a result of any (x) amendment to, or
change (including any announced prospective change) in, the laws or associated regulations of the
United States or any political subdivision or taxing authority of the United States, or (y)
official administrative pronouncement or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or which pronouncement or decision is announced
on or after May 22, 2006, (1) there is more than an insubstantial risk that interest payable by the
Note Issuer on the Notes held by the Trust is not, or within 90 days of the date of the amendment,
change, pronouncement or decision, will not be, deductible by the Note Issuer, in whole or in part,
for United States federal income tax purposes, or (2) the Trust is, or will be within 90 days of
the date of such opinion, subject to more than a de minimis amount of taxes, duties or other
governmental charges.



     If however, at the time of a Tax Event, there is available to the Note Issuer or the Trust the
opportunity to eliminate, within 90 days following the occurrence of such Tax Event, the Tax Event
by taking some ministerial action, such as filing a form or making an election or pursuing some
other similar reasonable measure that would have no adverse effect on the Trust, the Note Issuer or
the Holders of the Capital Securities, then the Note Issuer or the Trust will pursue such measure
instead of redeeming the Capital Securities.



     “Regulatory Capital Event” shall mean that the Sponsor shall have received an opinion of
independent bank regulatory counsel experienced in such matters, to the effect that, as a result of
(x) any amendment to, or change (including any announced prospective change) in, the laws or
associated regulations of the United States or any political subdivision of the United States, or
any rules, guidelines or policies of the appropriate regulatory authorities, which is effective on
or after May 22, 2006, or (y) any official or administrative pronouncement or action or judicial
decision interpreting or applying those laws or regulations that is announced on or after May 22,
2006, the Capital Securities do not constitute, or within 90 days of the date thereof




63










 






will not constitute, Tier 1 capital, or its then equivalent, applied as if the Sponsor or its
successor were a bank holding company under The Bank Holding Company Act of 1956, as amended,
provided, however, that the distribution of the Notes in connection with the liquidation of the
Trust shall not in and of itself constitute a Regulatory Capital Event unless such liquidation
shall have occurred in connection with a Tax Event.




     “Investment Company Event” shall mean that the Trust has received an opinion of independent
counsel experienced in investment company matters to the effect that, as a result of the occurrence
of a change in law or regulation or a change in interpretation or application of law or regulation
by any legislative body, court, governmental agency, or regulatory authority, which change is in
any case effective on or after May 22, 2006, the Trust is, or within 180 days will be, considered
an investment company that is required to be registered under the Investment Company Act of 1940,
as amended.



     “Special Event Redemption Price” shall mean, with respect to a redemption of Securities, a
price equal to 100% of the principal of a Like Amount of Notes to be redeemed plus accumulated but
unpaid Distributions thereon, if any, to the date of such redemption.



          (d) On and from the date fixed by the Administrative Trustees for any distribution of Notes
and liquidation of the Trust: (i) the Securities will no longer be deemed to be outstanding, (ii)
the Clearing Agency or its nominee (or any successor Clearing Agency or its nominee), as the Holder
of the Capital Securities, will receive a registered global certificate or certificates
representing the Notes to be delivered upon such distribution and any certificates representing
Securities not held by the Clearing Agency or its nominee (or any successor Clearing Agency or its
nominee) will be deemed to represent beneficial interests in a Like Amount of Notes until such
certificates are presented to the Note Issuer or its agent for transfer or reissue.



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



          (f) The procedure with respect to redemptions or distributions of Securities shall be as
follows:




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



64









 






respect to any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.




          (ii) In the event that fewer than all the outstanding Securities are to be
redeemed, the Securities to be redeemed shall be redeemed Pro Rata from each Holder,
it being understood that, in respect of Capital Securities registered in the name of
and held of record by the Clearing Agency or its nominee (or any successor Clearing
Agency or its nominee) or any nominee, the distribution of the proceeds of such
redemption will be made to the Clearing Agency and disbursed by such Clearing Agency
in accordance with the procedures applied by such agency or nominee.




          (iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, (which notice will be irrevocable), then (A) with
respect to Capital Securities issued in book-entry form, by 12:00 noon, New York
City time, on the redemption date, provided that the Note Issuer has paid the
Property Trustee a sufficient amount of cash in connection with the related
redemption or maturity of the Notes by 10:00 a.m., New York City time, on the
maturity date or the date of redemption, as the case requires, the Property Trustee
will deposit irrevocably with the Clearing Agency or its nominee (or successor
Clearing Agency or its nominee) funds sufficient to pay the applicable Redemption
Price with respect to such Capital Securities and will give the Clearing Agency
irrevocable instructions and authority to pay the Redemption Price to the relevant
Clearing Agency Participants, and (B) with respect to Capital Securities issued in
certificated form and Common Securities, provided that the Note Issuer has paid the
Property Trustee a sufficient amount of cash in connection with the related
redemption or maturity of the Notes, the Property Trustee will pay the relevant
Redemption Price to the Holders by check mailed to the address of the relevant
Holder appearing on the books and records of the Trust on the redemption date. If a
Redemption/Distribution Notice shall have been given and funds deposited as
required, if applicable, then immediately prior to the close of business on the date
of such deposit, or on the redemption date, as applicable, Distributions will cease
to accumulate on the Securities so called for redemption and all rights of Holders
so called for redemption will cease, except the right of the Holders of such
Securities to receive the Redemption Price, but without interest on such Redemption
Price, and such Securities shall cease to be outstanding.




          (iv) Payment of accumulated and unpaid Distributions on the Redemption Date of
the Securities will be subject to the rights of Holders on the close of business on
a regular record date in respect of a Distribution Date occurring on or prior to
such Redemption Date.




          Neither the Administrative Trustees nor the Trust shall be required to register
or cause to be registered the transfer of (i) any Securities beginning on the
opening of business 15 days before the day of mailing of a notice of redemption or
any notice of selection of Securities for redemption and ending at



65









 







the close of Business on the day of mailing of such notice of redemption or
selection or (ii) any Securities selected for redemption except the unredeemed
portion of any Security being redeemed. If any date fixed for redemption of
Securities is not a Business Day, then payment of the Redemption Price payable on
such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) except that, if
such next succeeding Business Day falls in the next calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date fixed for redemption. If payment of the
Redemption Price in respect of any Securities is improperly withheld or refused and
not paid either by the Property Trustee or by the Sponsor as guarantor pursuant to
the relevant Securities Guarantee, Distributions on such Securities will continue to
accumulate from the original redemption date to the actual date of payment, in which
case the actual payment date will be considered the date fixed for redemption for
purposes of calculating the Redemption Price.




          (v) Redemption/Distribution Notices shall be sent by the Property Trustee on
behalf of the Trust to (A) in respect of the Capital Securities, the Clearing Agency
or its nominee (or any successor Clearing Agency or its nominee) if the Global
Certificates have been issued or, if Definitive Capital Security Certificates have
been issued, to the Holder thereof, and (B) in respect of the Common Securities to
the Holder thereof.




          (vi) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws and banking laws), the Sponsor or
any of its subsidiaries may at any time and from time to time purchase outstanding
Capital Securities by tender, in the open market or by private agreement.



     5. Voting Rights — Capital Securities.



          (a) Except as provided under Sections 5(b) and 7 and as otherwise required by law and the
Trust Agreement, the Holders of the Capital Securities will have no voting rights.




          (b) So long as any Notes are held by the Property Trustee, the Trustees shall not (i) direct
the time, method and place of conducting any proceeding for any remedy available to the Note
Trustee, or executing any trust or power conferred on such Note Trustee with respect to the Notes,
(ii) waive any past default that is waivable under Section 5.07 of the Indenture, (iii) exercise
any right to rescind or annul a declaration of acceleration of the maturity of the principal of the
Notes or (iv) consent to any amendment, modification or termination of the Indenture or the Notes,
where such consent shall be required, without, in each case, obtaining the prior approval of the
Holders of a Majority in liquidation amount of all outstanding Capital Securities;
provided, however, that where a consent under the Indenture would require the
consent of each holder of Notes affected thereby, no such consent shall be given by the Property
Trustee without the prior approval of each Holder of the Capital Securities. The Trustees shall
not revoke any action previously authorized or approved by a vote of the Holders of the Capital

66









 








Securities except by subsequent vote of such Holders. The Property Trustee shall notify each
Holder of Capital Securities of any notice of default with respect to the Notes. In addition to
obtaining the foregoing approvals of such Holders of the Capital Securities, prior to taking any of
the foregoing actions, the Trustees shall obtain an opinion of counsel experienced in such matters
to the effect that the Trust will not be classified as an association taxable as a corporation for
United States federal income tax purposes on account of such action.




     If an Event of Default under the Trust Agreement has occurred and is continuing and such event
is attributable to the failure of the Note Issuer to pay principal of or premium, if any, or
interest on the Notes on the due date (or in the case of redemption, on the redemption date), then
a Holder of Capital Securities may directly institute a proceeding against the Note Issuer for
enforcement of payment to such Holder of the principal of or premium, if any, or interest on a Like
Amount of Notes (a “Direct Action”) on or after the respective due date specified in the Notes. In
connection with such Direct Action, the rights of the Common Securities Holder will be subrogated
to the rights of such Holder of Capital Securities to the extent of any payment made by the Note
Issuer to such Holder of Capital Securities in such Direct Action. Except as provided in the
second preceding sentence, the Holders of Capital Securities will not be able to exercise directly
any other remedy available to the holders of the Notes.



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



     No vote or consent of the Holders of the Capital Securities will be required for the Trust to
redeem and cancel Capital Securities or to distribute the Notes in accordance with the Trust
Agreement and the terms of the Securities.



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



     6. Voting Rights — Common Securities.



          (a) Except as provided under Sections 6(b), 6(c), and 7 and as otherwise required by law and
the Trust Agreement, the Holders of the Common Securities will have no voting rights.




          (b) Unless an Event of Default shall have occurred and be continuing, any Trustee may be
removed at any time by the holder of the Common Securities. If an Event of

67









 








Default has occurred and is continuing, the Property Trustee and the Delaware Trustee may be
removed at such time by the holders of a Majority in liquidation amount of the outstanding Capital
Securities. In no event will the holders of the Capital Securities have the right to vote to
appoint, remove or replace the Administrative Trustees, which voting rights are vested exclusively
in the Sponsor as the holder of the Common Securities. No resignation or removal of a Trustee and
no appointment of a successor trustee shall be effective until the acceptance of appointment by the
successor trustee in accordance with the provisions of the Trust Agreement.




          (c) So long as any Notes are held by the Property Trustee, the Trustees shall not (i) direct
the time, method and place of conducting any proceeding for any remedy available to the Note
Trustee, or executing any trust or power conferred on such Note Trustee with respect to the Notes,
(ii) waive any past default that is waivable under Section 5.07 of the Indenture, (iii) exercise
any right to rescind or annul a declaration of acceleration of the maturity of the principal of the
Notes or (iv) consent to any amendment, modification or termination of the Indenture or the Notes,
where such consent shall be required, without, in each case, obtaining the prior approval of the
Holders of a Majority in liquidation amount of all outstanding Common Securities; provided,
however, that where a consent under the Indenture would require the consent of each holder
of Notes affected thereby, no such consent shall be given by the Property Trustee without the prior
approval of each Holder of the Common Securities. The Trustees shall not revoke any action
previously authorized or approved by a vote of the Holders of the Common Securities except by
subsequent vote of such Holders. The Property Trustee shall notify each Holder of Common
Securities of any notice of default with respect to the Notes. In addition to obtaining the
foregoing approvals of such Holders of the Common Securities, prior to taking any of the foregoing
actions, the Trustees shall obtain an opinion of counsel experienced in such matters to the effect
that the Trust will not be classified as an association taxable as a corporation for United States
federal income tax purposes on account of such action.




     If an Event of Default under the Trust Agreement has occurred and is continuing and such event
is attributable to the failure of the Note Issuer to pay principal of or premium, if any, or
interest on the Notes on the due date (or in the case of redemption, on the redemption date), then
a Holder of Common Securities may institute a Direct Action for enforcement of payment to such
Holder of the principal of or premium, if any, or interest on a Like Amount of Notes on or after
the respective due date specified in the Notes. In connection with such Direct Action, the rights
of the Common Securities Holder will be subordinated to the rights of such Holder of Capital
Securities. Except as provided in the second preceding sentence, the Holders of Common Securities
will not be able to exercise directly any other remedy available to the holders of the Notes.



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



68









 





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



     7. Amendments to Trust Agreement and Indenture.



     In addition to the requirements set out in Section 12.1 of the Trust Agreement, the Trust
Agreement may be amended from time to time by the Sponsor, the Property Trustee and the
Administrative Trustees, without the consent of the Holders (i) to cure any ambiguity, correct or
supplement any provisions in the Trust Agreement that may be inconsistent with any other
provisions, or to make any other provisions with respect to matters or questions arising under the
Trust Agreement which shall not be inconsistent with the other provisions of the Trust Agreement,
or (ii) to modify, eliminate or add to any provisions of the Trust Agreement to such extent as
shall be necessary to ensure that the Trust will be classified for United States federal income tax
purposes as a grantor trust at all times that any Securities are outstanding or to ensure that the
Trust will not be required to register as an “Investment Company” under the Investment Company Act;
provided, however, that in the case of clause (i), such action shall not adversely
affect in any material respect the interests of any Holder. Any amendments of the Trust Agreement
shall become effective when notice thereof is given to the Holders. The Trust Agreement may also
be amended by the Trustees and the Sponsor with (i) the consent of Holders representing a Majority
in liquidation amount of all outstanding Securities, and (ii) receipt by the Trustees of an Opinion
of Counsel to the effect that such amendment or the exercise of any power granted to the Trustees
in accordance with such amendment will not affect the Trust’s status as a grantor trust for United
States federal income tax purposes or the Trust’s exemption from status as an Investment Company
under the Investment Company Act, provided that, without the consent of each Holder
of Trust Securities, the Trust Agreement may not be amended to (i) change the amount or timing of
any Distribution on the Trust Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the Trust Securities as of a specified date or (ii)
restrict the right of a holder of Trust Securities to institute suit for the enforcement of any
such payment on or after such date.



     8. Pro Rata.



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



69









 





     9. Ranking.



     The Capital Securities rank pari passu with the Common Securities and payment
thereon shall be made Pro Rata with the Common Securities, except that, if an Event of Default
under the Trust Agreement occurs and is continuing, no payments in respect of Distributions on, or
payments upon liquidation, redemption or otherwise with respect to, the Common Securities shall be
made until the Holders of the Capital Securities shall be paid in full the Distributions,
Redemption Price, Liquidation Distribution and other payments to which they are entitled at such
time.



     10. Acceptance of Securities Guarantee and Indenture.



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



     11. No Preemptive Rights.



     The Holders shall have no preemptive rights to subscribe for any additional securities.



     12. Miscellaneous.



     These terms constitute a part of the Trust Agreement.



     The Sponsor will provide a copy of the Trust Agreement, the Capital Securities Guarantee, and the
Indenture (including any supplemental indenture) to a Holder without charge upon written request to
the Sponsor at its principal place of business.




70









 








EXHIBIT A-1




FORM OF CAPITAL SECURITY CERTIFICATE




[FORM OF FACE OF SECURITY]




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



     THE CAPITAL SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING A
LIQUIDATION AMOUNT OF NOT LESS THAN $25. ANY SUCH TRANSFER OF CAPITAL SECURITIES IN A BLOCK HAVING
A LIQUIDATION AMOUNT OF LESS THAN $25 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER.
ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH CAPITAL SECURITIES FOR ANY
PURPOSE, INCLUDING BUT NOT LIMITED TO THE RECEIPT OF DISTRIBUTIONS OF SUCH CAPITAL SECURITIES, AND
SUCH TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH CAPITAL SECURITIES.



     THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES, REPRESENTS AND
WARRANTS THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”) OR (ii) THE ACQUISITION AND HOLDING OF THIS
CAPITAL SECURITY BY IT IS NOT PROHIBITED BY EITHER SECTION 406 OF ERISA OR SECTION 4975 OF THE U.S.
INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR IS EXEMPT FROM ANY SUCH PROHIBITION.



71









 





			
	Certificate Number
	 	Aggregate Liquidation Amount $                    






CUSIP NO.                      




Certificate Evidencing Capital Securities




of




Sovereign Capital Trust V




7.75% Capital Securities

(liquidation amount $25.00 per Capital Security)




     Sovereign Capital Trust V, a statutory trust created under the laws of the State of Delaware
(the “Trust”), hereby certifies that                                          (the “Holder”) is the registered owner of the
aggregate liquidation amount of Capital Securities of the Trust specified in Schedule A hereto
representing undivided beneficial interests in the assets of the Trust designated the 7.75% Capital
Securities (liquidation amount $25.00 per Capital Security) (the “Capital Securities”). The
Capital Securities are transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in proper form for
transfer. The designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Capital Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust of the Trust dated as of
May 22, 2006, as the same may be amended from time to time (the “Trust Agreement”), including the
designation of the terms of the Capital Securities as set forth in Annex I to the Trust Agreement.
Capitalized terms used but not defined herein shall have the meaning given them in the Trust
Agreement. The Sponsor will provide a copy of the Trust Agreement, the Capital Securities
Guarantee, and the Indenture (including any supplemental indenture) to a Holder without charge upon
written request to the Trust at its principal place of business.



     Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled
to the benefits thereunder and to the benefits of the Capital Securities Guarantee to the extent
provided therein.



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



[SIGNATURES ON FOLLOWING PAGE]




72









 








     IN
WITNESS WHEREOF, the Trust has executed this certificate this ___ day of May, 2006.



	 	 	 	 	 
	 	SOVEREIGN CAPITAL TRUST V

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Administrative Trustee 	 
	 



PROPERTY TRUSTEE’S CERTIFICATE OF AUTHENTICATION





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



Dated: May     , 2006




	 	 	 	 	 	 	 
	 	 	THE BANK OF NEW YORK, as Property Trustee	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Authorized Signatory
	 	 






73









 





[FORM OF REVERSE OF SECURITY]




     Distributions payable on each Capital Security will be fixed at a rate per annum of 7.75% (the
“Coupon Rate”) of the liquidation amount of $25.00 per Capital Security, such rate being the rate
of interest payable on the Notes to be held by the Property Trustee. Distributions in arrears for
more than one quarter will bear interest thereon compounded quarterly at the Coupon Rate (to the
extent permitted by applicable law). The term “Distributions”, as used herein, includes such cash
distributions and any such interest unless otherwise stated. A Distribution is payable only to the
extent that payments are made in respect of the Notes held by the Property Trustee and to the
extent the Property Trustee has funds on hand legally available therefor.



     Distributions on the Capital Securities will be cumulative, will accumulate from the most
recent date to which Distributions have been paid or, if no Distributions have been paid, from May
22, 2006 and will be payable quarterly in arrears, on February 15, May 15, August 15, and November
15 of each year, commencing on August 15, 2006, except as otherwise described below. Distributions
will be computed on the basis of a 360-day year consisting of twelve 30-day months and, for any
period less than a full calendar month, the number of days elapsed in such month. The Note Issuer
has the right under the Indenture to defer payments of interest by extending the interest payment
period at any time and from time to time on the Notes for a period not exceeding 20 consecutive
quarterly periods, including the first such quarter during such extension period (each an
“Extension Period”), provided that no Extension Period shall end on a date other
than an Interest Payment Date for the Notes or extend beyond the Maturity Date of the Notes. As a
consequence of such deferral, Distributions will also be deferred. Despite such deferral,
quarterly Distributions will continue to accumulate with interest thereon (to the extent permitted
by applicable law, but not at a rate exceeding the rate of interest then accruing on the Notes) at
the Coupon Rate compounded quarterly during any such Extension Period. Prior to the termination of
any such Extension Period, the Note Issuer may further defer payments of interest by further
extending such Extension Period; provided that such Extension Period, together with
all such previous and further extensions within such Extension Period, may not exceed 20
consecutive quarters, including the first quarter during such Extension Period, end on a date other
than an Interest Payment Date for the Notes or extend beyond the Maturity Date of the Notes.
Payments of accumulated Distributions will be payable to Holders as they appear on the books and
records of the Trust on the first record date after the end of the Extension Period. Upon the
termination of any Extension Period and the payment of all amounts then due, the Note Issuer may
commence a new Extension Period, subject to the above requirements.



     Subject to receipt by the Sponsor of any required regulatory approval and to certain other
conditions set forth in the Trust Agreement and the Indenture, the Property Trustee may, at the
direction of the Sponsor, at any time liquidate the Trust and cause the Notes to be distributed to
the holders of the Securities in liquidation of the Trust or, simultaneous with any redemption of
the Notes, cause a Like Amount of the Securities to be redeemed by the Trust.



     The Capital Securities shall be redeemable as provided in the Trust Agreement.



74









 





_____________________




ASSIGNMENT



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




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






	 	 	 
	 
	 
	 	 
	 
	 
	 	 
	 
	(Insert address and zip code of assignee)





and irrevocably appoints




	 	 	 
	 
	 
	 	 
	 
	 
	 	 
	 

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






	 	 	 	 	 
	Date:
	 	 	 	 
	 

	 	 

	 	 






	 	 	 	 	 
	Signature:
	 	 	 	 
	 

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






	 	 	 
	Signature Guarantee***:
	 	 
	 

	 	 







 




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




75









 










EXHIBIT A-2




FORM OF COMMON SECURITY CERTIFICATE




     THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”) OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER
THIS COMMON SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.



     THE HOLDER OF THIS COMMON SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER THIS COMMON SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) WHICH
IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH THE
COMPANY OR ANY “AFFILIATE” OF THE COMPANY WAS THE OWNER OF THIS CAPITAL SECURITY (OR ANY
PREDECESSOR OF THIS CAPITAL SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS THIS COMMON
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A
PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A) THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES
TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER
THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF
SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS
COMMON SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED
INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH,
ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT TO THE RIGHT OF THE
TRUST AND THE COMPANY PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D), (E) OR
(F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (ii) PURSUANT TO CLAUSE (E), TO REQUIRE THAT A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THE REVERSE OF THIS COMMON SECURITY IS COMPLETED AND DELIVERED BY
THE TRANSFEREE TO THE TRUST. SUCH HOLDER FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS COMMON SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.



 









 





Certificate Evidencing Common Securities




of




Sovereign Capital Trust V




7.75% Common Securities




(liquidation amount $25 per Common Security)




     Sovereign Capital Trust V, a statutory trust formed under the laws of the State of Delaware
(the “Trust”), hereby certifies that Sovereign Bancorp, Inc. (the “Holder”) is the registered owner
of                                          common securities of the Trust representing undivided beneficial interests in the
assets of the Trust designated the 7.75% Common Securities (liquidation amount $25 per Common
Security) (the “Common Securities”). The Common Securities are transferable on the books and
records of the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Common Securities represented
hereby are issued and shall in all respects be subject to the provisions of the Amended and
Restated Declaration of Trust of the Trust dated as of May 22, 2006, as the same may be amended
from time to time (the “Trust Agreement”), including the designation of the terms of the Common
Securities as set forth in Annex I to the Trust Agreement. Capitalized terms used but not defined
herein shall have the meaning given them in the Trust Agreement. The Sponsor will provide a copy
of the Trust Agreement, the Capital Securities Guarantee and the Indenture (including any
supplemental indenture) to a Holder without charge upon written request to the Sponsor at its
principal place of business.



     Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled
to the benefits thereunder and to the benefit of the Common Securities Guarantee Agreement to the
extent provided therein.



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



[SIGNATURES ON FOLLOWING PAGE]




 









 








     IN
WITNESS WHEREOF, the Trust has executed this certificate this ___ day of May, 2006.



	 	 	 	 	 
	 	Sovereign Capital Trust V

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Administrative Trustee 	 
	 



PROPERTY TRUSTEE’S CERTIFICATE OF AUTHENTICATION





     This is one of the Common Securities referred to in the within-mentioned Trust Agreement.



	 	 	 	 	 	 	 
	Dated: May     , 2006	 	THE BANK OF NEW YORK, as Property Trustee
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	Authorized Signatory






 









 






[FORM OF REVERSE OF SECURITY]




     Distributions payable on each Common Security will be fixed at a rate per annum of 7.75% (the
“Coupon Rate”) of the liquidation amount of $25 per Common Security, such rate being the rate of
interest payable on the Notes to be held by the Property Trustee. Distributions in arrears for
more than one quarter will bear interest thereon compounded quarterly at the Coupon Rate (to the
extent permitted by applicable law). The term “Distributions”, as used herein, includes such cash
distributions and any such interest unless otherwise stated. A Distribution is payable only to the
extent that payments are made in respect of the Notes held by the Property Trustee and to the
extent the Property Trustee has funds available therefor.



     Distributions on the Common Securities will be cumulative, will accumulate from the most
recent date to which Distributions have been paid or, if no Distributions have been paid, from May
22, 2006 and will be payable quarterly in arrears, on February 15, May 15, August 15, and November
15 of each year, commencing on August 15, 2006, except as otherwise described below. Distributions
will be computed on the basis of a 360-day year consisting of twelve 30-day months and, for any
period less than a full calendar month, the number of days elapsed in such month. The Note Issuer
has the right under the Indenture to defer payments of interest by extending the interest payment
period at any time and from time to time on the Notes for a period not exceeding 20 consecutive
quarters, including the first quarter during such extension period (each an “Extension Period”),
provided that no Extension Period shall end on a date other than an Interest
Payment Date for the Notes or extend beyond the Maturity Date of the Notes. As a consequence of
such deferral, Distributions will also be deferred. Despite such deferral, Distributions will
continue to accumulate with interest thereon (to the extent permitted by applicable law, but not at
a rate exceeding the rate of interest then accruing on the Notes) at the Coupon Rate compounded
quarterly during any such Extension Period. Prior to the termination of any such Extension Period,
the Note Issuer may further defer payments of interest by further extending such Extension Period;
provided that such Extension Period, together with all such previous and further
extensions within such Extension Period, may not exceed 20 consecutive quarters, including the
first quarter during such Extension Period, or end on a date other than an Interest Payment Date
for the Notes or extend beyond the Maturity Date of the Notes. Payments of accrued Distributions
will be payable to Holders as they appear on the books and records of the Trust on the first record
date after the end of the Extension Period. Upon the termination of any Extension Period and the
payment of all amounts then due, the Note Issuer may commence a new Extension Period, subject to
the above requirements.



     Subject to receipt by the Sponsor of any required regulatory approval and to certain other
conditions set forth in the Trust Agreement and the Indenture, the Property Trustee may, at the
direction of the Sponsor, at any time liquidate the Trust and cause the Notes to be distributed to
the holders of the Securities in liquidation of the Trust or, simultaneous with any redemption of
the Notes, cause a Like Amount of the Securities to be redeemed by the Trust.



     Under certain circumstances, the right of the holders of the Common Securities shall be
subordinate to the rights of the holders of the Capital Securities (as defined in the Trust
Agreement), as provided in the Declaration.



     The Common Securities shall be redeemable as provided in the Trust Agreement.