Exhibit 4.6


 


 




 





 


AMENDED AND RESTATED DECLARATION


OF TRUST


 


by and among


 


U.S. BANK NATIONAL ASSOCIATION,


as Institutional Trustee,


 


FIRST REGIONAL BANCORP,


as Sponsor,


 


and


 


JACK A. SWEENEY, H. ANTHONY GARTSHORE and


THOMAS MCCULLOUGH,


as Administrators,


 


Dated as of March 17, 2004


 




 





 





















 


TABLE OF CONTENTS


 


	
  ARTICLE I INTERPRETATION AND
  DEFINITIONS

  	
   

  
	
  Section 1.1.

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II ORGANIZATION

  	
   

  
	
  Section 2.1.

  	
  Name

  	
   

  
	
  Section 2.2.

  	
  Office

  	
   

  
	
  Section 2.3.

  	
  Purpose

  	
   

  
	
  Section 2.4.

  	
  Authority

  	
   

  
	
  Section 2.5.

  	
  Title to Property of the
  Trust

  	
   

  
	
  Section 2.6.

  	
  Powers
  and Duties of the Institutional Trustee and the Administrators

  	
   

  
	
  Section 2.7.

  	
  Prohibition
  of Actions by the Trust and the Institutional Trustee

  	
   

  
	
  Section 2.8.

  	
  Powers
  and Duties of the Institutional Trustee

  	
   

  
	
  Section 2.9.

  	
  Certain
  Duties and Responsibilities of the Institutional Trustee and Administrators

  	
   

  
	
  Section 2.10.

  	
  Certain Rights
  of Institutional Trustee

  	
   

  
	
  Section 2.11.

  	
  Execution of Documents

  	
   

  
	
  Section 2.12.

  	
  Not
  Responsible for Recitals or Issuance of Securities

  	
   

  
	
  Section 2.13.

  	
  Duration of Trust

  	
   

  
	
  Section 2.14.

  	
  Mergers

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III SPONSOR

  	
   

  
	
  Section 3.1.

  	
  Sponsor’s
  Purchase of Common Securities

  	
   

  
	
  Section 3.2.

  	
  Responsibilities of the
  Sponsor

  	
   

  
	
  Section 3.3.

  	
  Expenses

  	
   

  
	
  Section 3.4.

  	
  Right to Proceed

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV INSTITUTIONAL TRUSTEE
  AND ADMINISTRATORS

  	
   

  
	
  Section 4.1.

  	
  Institutional
  Trustee; Eligibility

  	
   

  
	
  Section 4.2.

  	
  Administrators

  	
   

  
	
  Section 4.3.

  	
  Appointment,
  Removal and Resignation of Institutional Trustee and Administrators

  	
   

  
	
  Section 4.4.

  	
  Institutional Trustee
  Vacancies

  	
   

  
	
  Section 4.5.

  	
  Effect of Vacancies

  	
   

  
	
  Section 4.6.

  	
  Meetings
  of the Institutional Trustee and the Administrators

  	
   

  
	
  Section 4.7.

  	
  Delegation of Power

  	
   

  
	
  Section 4.8.

  	
  Conversion,
  Consolidation or Succession to Business

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V DISTRIBUTIONS

  	
   

  
	
  Section 5.1.

  	
  Distributions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI ISSUANCE OF SECURITIES

  	
   

  
	
  Section 6.1.

  	
  General
  Provisions Regarding Securities

  	
   

  
	
  Section 6.2.

  	
  Paying
  Agent, Transfer Agent and Registrar

  	
   

  
	
  Section 6.3.

  	
  Form and Dating

  	
   

  
	
  Section 6.4.

  	
  Mutilated,
  Destroyed, Lost or Stolen Certificates

  	
   

  
	
  Section 6.5.

  	
  Temporary Securities

  	
   

  
	
  Section 6.6.

  	
  Cancellation

  	
   

  



 


i





















 


	
  Section 6.7.

  	
  Rights of
  Holders; Waivers of Past Defaults

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII DISSOLUTION AND
  TERMINATION OF TRUST

  	
   

  
	
  Section 7.1.

  	
  Dissolution and
  Termination of Trust

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII TRANSFER OF
  INTERESTS

  	
   

  
	
  Section 8.1.

  	
  General

  	
   

  
	
  Section 8.2.

  	
  Transfer
  Procedures and Restrictions

  	
   

  
	
  Section 8.3.

  	
  Deemed Security Holders

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  
	
  Section 9.1.

  	
  Liability

  	
   

  
	
  Section 9.2.

  	
  Exculpation

  	
   

  
	
  Section 9.3.

  	
  Fiduciary Duty

  	
   

  
	
  Section 9.4.

  	
  Indemnification

  	
   

  
	
  Section 9.5.

  	
  Outside Businesses

  	
   

  
	
  Section 9.6.

  	
  Compensation; Fee

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X ACCOUNTING

  	
   

  
	
  Section 10.1.

  	
  Fiscal Year

  	
   

  
	
  Section 10.2.

  	
  Certain Accounting Matters

  	
   

  
	
  Section 10.3.

  	
  Banking

  	
   

  
	
  Section 10.4.

  	
  Withholding

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI AMENDMENTS AND MEETINGS

  	
   

  
	
  Section 11.1.

  	
  Amendments

  	
   

  
	
  Section 11.2.

  	
  Meetings
  of the Holders of Securities; Action by Written Consent

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII REPRESENTATIONS OF
  INSTITUTIONAL TRUSTEE

  	
   

  
	
  Section 12.1.

  	
  Representations
  and Warranties of Institutional Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII MISCELLANEOUS

  	
   

  
	
  Section 13.1.

  	
  Notices

  	
   

  
	
  Section 13.2.

  	
  Governing Law

  	
   

  
	
  Section 13.3.

  	
  Intention of the Parties

  	
   

  
	
  Section 13.4.

  	
  Headings

  	
   

  
	
  Section 13.5.

  	
  Successors and Assigns

  	
   

  
	
  Section 13.6.

  	
  Partial Enforceability

  	
   

  
	
  Section 13.7.

  	
  Counterparts

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Annex
  I

  	
  Terms
  of Securities

  	
   

  
	
  Exhibit A-1

  	
  Form of Capital Security Certificate

  	
   

  
	
  Exhibit A-2

  	
  Form of Common Security Certificate

  	
   

  
	
  Exhibit B

  	
  Specimen of Initial
  Debenture

  	
   

  
	
  Exhibit C

  	
  Placement Agreement

  	
   

  



 


ii





















 


AMENDED AND RESTATED


 


DECLARATION OF TRUST


 


OF


 


FIRST REGIONAL STATUTORY TRUST III


 


March 17, 2004


 


AMENDED AND RESTATED DECLARATION OF TRUST (“Declaration”)
dated and effective as of March 17, 2004, by the Institutional Trustee (as
defined herein), the Administrators (as defined herein), the Sponsor (as
defined herein) and by the holders, from time to time, of undivided beneficial
interests in the Trust (as defined herein) to be issued pursuant to this
Declaration;


 


WHEREAS, the Institutional Trustee, the Administrators
and the Sponsor established First Regional Statutory Trust III (the “Trust”),
a statutory trust under the Statutory Trust Act (as defined herein) pursuant to
a Declaration of Trust dated as of March 4, 2004 (the “Original
Declaration”), and a Certificate of Trust filed with the Secretary of State
of the State of Connecticut on March 4, 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 debentures of the Debenture Issuer (as defined herein);


 


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


 


WHEREAS, the Institutional Trustee, the Administrators
and the Sponsor, by this Declaration, amend and restate each and every term and
provision of the Original Declaration;


 


NOW, THEREFORE, it being the intention of the parties
hereto to continue the Trust as a statutory trust under the Statutory Trust Act
and that this Declaration constitutes the governing instrument of such
statutory trust, the Institutional Trustee declares that all assets contributed
to the Trust will be held in trust for the benefit of the holders, from time to
time, of the securities representing undivided beneficial interests in the
assets of the Trust issued hereunder, subject to the provisions of this
Declaration.  The parties hereto hereby
agree as follows:


 


ARTICLE I



INTERPRETATION AND DEFINITIONS


 


Section 1.1.                                Definitions.  Unless the context otherwise requires:


 


(a)                                  Capitalized
terms used in this Declaration but not defined in the preamble above have the
respective meanings assigned to them in this Section 1.1;


 


(b)                                 a
term defined anywhere in this Declaration has the same meaning throughout;


 


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


 


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


 


1





















 


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


 


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


 


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


 


“Administrators” means each of Jack A. Sweeney,
H. Anthony Gartshore and Thomas McCullough, solely in such Person’s capacity as
Administrator of the Trust created and continued hereunder and not in such
Person’s individual capacity, or such Administrator’s successor in interest in
such capacity, or any successor appointed as herein provided.


 


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


 


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


 


“Bankruptcy Event” means, with respect to any
Person:


 


(a)                                  a
court having jurisdiction in the premises shall enter a decree or order for
relief in respect of such Person in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its
property, or ordering the winding-up or liquidation of its affairs and such
decree or order shall remain unstayed and in effect for a period of 90 consecutive
days; or


 


(b)                                 such
Person shall commence a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, shall consent to
the entry of an order for relief in an involuntary case under any such law, or
shall consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) of such Person of any substantial part of its property, or shall make
any general assignment for the benefit of creditors, or shall fail generally to
pay its debts as they become due.


 


“Business Day” means any day other than
Saturday, Sunday or any other day on which banking institutions in New York
City or Hartford, Connecticut are permitted or required by any applicable law
or executive order to close.


 


“Capital Securities” has the meaning set forth
in paragraph 1(a) of Annex I.


 


“Capital Security Certificate” means a
definitive Certificate in fully registered form representing a Capital Security
substantially in the form of Exhibit A-1.


 


“Capital Treatment Event” has the meaning set
forth in paragraph 4(a) of Annex I.


 


“Certificate” means any certificate evidencing
Securities.


 


“Closing Date” has the meaning set forth in the
Placement Agreement.


 


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


 


“Common Securities” has the meaning set forth
in paragraph 1(b) of Annex I.


 


2





















 


“Common Security Certificate” means a
definitive Certificate in fully registered form representing a Common Security
substantially in the form of Exhibit A-2.


 


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


 


“Corporate Trust Office” means the office of
the Institutional Trustee at which the corporate trust business of the
Institutional Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this Declaration is
located at 225 Asylum Street, Goodwin Square, Hartford, Connecticut  06103.


 


“Coupon Rate” has the meaning set forth in
paragraph 2(a) of Annex I.


 


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


 


“Creditor” has the meaning set forth in Section 3.3.


 


“Debenture Issuer” means First Regional
Bancorp, a California corporation, in its capacity as issuer of the Debentures
under the Indenture.


 


“Debenture Trustee” means U.S. Bank National
Association, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.


 


“Debentures” means the Floating Rate Junior
Subordinated Deferrable Interest Debentures due 2034 to be issued by the
Debenture Issuer under the Indenture.


 


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


 


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


 


“Direct Action” has the meaning set forth in Section 2.8(d).


 


“Distribution” means a distribution payable to
Holders of Securities in accordance with Section 5.1.


 


“Distribution Payment Date” has the meaning set
forth in paragraph 2(b) of Annex I.


 


“Distribution Period” means (i) with
respect to the Distribution paid on the first Distribution Payment Date, the
period beginning on (and including) the date of original issuance and ending on
(but excluding) the Distribution Payment Date in June 2004 and (ii) thereafter,
with respect to a Distribution paid on each successive Distribution Payment
Date, the period beginning on (and including) the preceding Distribution
Payment Date and ending on (but excluding) such current Distribution Payment
Date.


 


“Distribution Rate” means, for the Distribution
Period beginning on (and including) the date of original issuance and ending on
(but excluding) the Distribution Payment Date in June 2004, the rate per
annum of 3.90%, and for each Distribution Period beginning on or after the
Distribution Payment Date in June 2004, the Coupon Rate for such
Distribution Period.


 


3





















 


“Event of Default” means any one of the
following events (whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):


 


(a)                                  the
occurrence of an Indenture Event of Default; or


 


(b)                                 default
by the Trust in the payment of any Redemption Price or Special Redemption Price
of any Security when it becomes due and payable; or


 


(c)                                  default
in the performance, or breach, in any material respect, of any covenant or
warranty of the Institutional Trustee in this Declaration (other than those
specified in clause (a) or (b) above) and continuation of such default or
breach for a period of 60 days after there has been given, by registered
or certified mail to the Institutional Trustee and to the Sponsor by the
Holders of at least 25% in aggregate liquidation amount of the outstanding
Capital Securities, a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a “Notice of
Default” hereunder; or


 


(d)                                 the
occurrence of a Bankruptcy Event with respect to the Institutional Trustee if a
successor Institutional Trustee has not been appointed within 90 days
thereof.


 


“Extension Period” has the meaning set forth in
paragraph 2(b) of Annex I.


 


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


 


“Fiduciary Indemnified Person” shall mean the Institutional
Trustee, any Affiliate of the Institutional Trustee and any officers,
directors, shareholders, members, partners, employees, representatives,
custodians, nominees or agents of the Institutional Trustee.


 


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


 


“Guarantee” means the guarantee agreement to be
dated as of the Closing Date, of the Sponsor in respect of the Capital
Securities.


 


“Holder” means a Person in whose name a
Certificate representing a Security is registered, such Person being a
beneficial owner within the meaning of the Statutory Trust Act.


 


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


 


“Indenture” means the Indenture dated as of the
Closing Date, between the Debenture Issuer and the Debenture Trustee, and any
indenture supplemental thereto pursuant to which the Debentures are to be
issued, as such Indenture and any supplemental indenture may be amended,
supplemented or otherwise modified from time to time.


 


“Indenture Event of Default” means an “Event of
Default” as defined in the Indenture.


 


“Institutional Trustee” means the Trustee
meeting the eligibility requirements set forth in Section 4.1.


 


“Interest” means any interest due on the
Debentures including any Additional Interest and Defaulted Interest.


 


4





















 


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


 


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


 


“Investment Company Event” has the meaning set
forth in paragraph 4(a) of Annex I.


 


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


 


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


 


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


 


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


 


“Officers’ Certificates” means, with respect to
any Person, a certificate signed by two Authorized Officers of such
Person.  Any Officers’ Certificate
delivered with respect to compliance with a condition or covenant providing for
it in this Declaration shall include:


 


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


 


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


 


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


 


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


 


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


 


“Paying Agent” has the meaning specified in Section 6.2.


 


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


 


“Placement Agreement” means the Placement
Agreement relating to the offering and sale of Capital Securities in the form
of Exhibit C.


 


“Property Account” has the meaning set forth in
Section 2.8(c).


 


“Pro Rata” has the meaning set forth in
paragraph 8 of Annex I.


 


5





















 


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


 


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


 


“Redemption/Distribution Notice” has the
meaning set forth in paragraph 4(e) of Annex I.


 


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


 


“Registrar” has the meaning set forth in Section 6.2.


 


“Responsible Officer” means, with respect to
the Institutional Trustee, any officer within the Corporate Trust Office of the
Institutional Trustee, including any vice-president, any assistant
vice-president, any assistant secretary, the treasurer, any assistant
treasurer, any trust officer or other officer of the Corporate Trust Office of
the Institutional Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter
is referred because of that officer’s knowledge of and familiarity with the
particular subject.


 


“Restricted Securities Legend” has the meaning
set forth in Section 8.2(b).


 


“Rule 3a-5” means Rule 3a-5 under the
Investment Company Act.


 


“Rule 3a-7” means Rule 3a-7 under the
Investment Company Act.


 


“Securities” means the Common Securities and
the Capital Securities.


 


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


 


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


 


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


 


“Special Redemption Price” has the meaning set
forth in paragraph 4(a) of Annex I.


 


“Sponsor” means First Regional Bancorp, a
California corporation, or any successor entity in a merger, consolidation or
amalgamation, in its capacity as sponsor of the Trust.


 


“Statutory Trust Act” means Chapter 615 of
Title 34 of the Connecticut General Statutes, Sections 500, et seq. as may be
amended from time to time.


 


“Successor Entity” has the meaning set forth in
Section 2.14(b).


 


“Successor Institutional Trustee” has the
meaning set forth in Section 4.3(a).


 


“Successor Securities” has the meaning set
forth in Section 2.14(b).


 


“Super Majority” has the meaning set forth in
paragraph 5(b) of Annex I.


 


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


 


6





















 


“10% in liquidation amount of the Securities”
means Holder(s) of outstanding Securities voting together as a single class or,
as the context may require, Holders of outstanding Capital Securities or
Holders of outstanding Common Securities voting separately as a class, who are
the record owners of 10% or more of the aggregate liquidation amount (including
the stated amount that would be paid on redemption, liquidation or otherwise,
plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined) of all outstanding Securities of the relevant
class.


 


“3-Month LIBOR” has the meaning set forth in
paragraph 4(a) of Annex I.


 


“Transfer Agent” has the meaning set forth in Section 6.2.


 


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


 


“Trust Property” means (a) the Debentures,
(b) any cash on deposit in, or owing to, the Property Account and (c) all
proceeds and rights in respect of the foregoing and any other property and
assets for the time being held or deemed to be held by the Institutional
Trustee pursuant to the trusts of this Declaration.


 


“U.S. Person” means a United States Person as
defined in Section 7701(a)(30) of the Code.


 


ARTICLE II



ORGANIZATION


 


Section 2.1.                                Name.  The Trust is named “First Regional
Statutory Trust III,” as such name may be modified from time to time by the
Administrators following written notice to the Holders of the Securities.  The Trust’s activities may be conducted under
the name of the Trust or any other name deemed advisable by the Administrators.


 


Section 2.2.                                Office.  The address of the principal office of
the Trust is c/o U.S. Bank National Association, 225 Asylum Street,
Goodwin Square, Hartford, Connecticut 
06103.  On at least 10 Business
Days written notice to the Holders of the Securities, the Administrators may
designate another principal office, which shall be in a state of the United
States or in the District of Columbia.


 


Section 2.3.                                Purpose.  The exclusive purposes and functions of
the Trust are (a) to issue and sell the Securities representing undivided
beneficial interests in the assets of the Trust, (b) to invest the gross
proceeds from such sale to acquire the Debentures, (c) to facilitate
direct investment in the assets of the Trust through issuance of the Common
Securities and the Capital Securities and (d) except as otherwise limited
herein, to engage in only those other activities necessary or incidental
thereto.  The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, pledge any of
its assets, or otherwise undertake (or permit to be undertaken) any activity
that would cause the Trust not to be classified for United States federal
income tax purposes as a grantor trust.


 


Section 2.4.                                Authority.  Except as specifically provided in this
Declaration, the Institutional Trustee shall have exclusive and complete
authority to carry out the purposes of the Trust.  An action taken by the Institutional Trustee
in accordance with its powers shall constitute the act of and serve to bind the
Trust.  In dealing with the Institutional
Trustee acting on behalf of the Trust, no Person shall be required to inquire
into the authority of the Institutional Trustee to bind the Trust.  Persons dealing with the Trust are entitled
to rely conclusively on the power and authority of the Institutional Trustee as
set forth in this Declaration.  The
Administrators shall have only those ministerial duties set forth herein with


 


7





















 


respect to accomplishing the purposes of the Trust and
are not intended to be trustees or fiduciaries with respect to the Trust or the
Holders.  The Institutional Trustee shall
have the right, but shall not be obligated except as provided in Section 2.6,
to perform those duties assigned to the Administrators.


 


Section 2.5.                                Title
to Property of the Trust.  Except
as provided in Section 2.8 with respect to the Debentures and the Property
Account or as otherwise provided in this Declaration, legal title to all assets
of the Trust shall be vested in the Trust. 
The Holders shall not have legal title to any part of the assets of the
Trust, but shall have an undivided beneficial interest in the assets of the
Trust.


 


Section 2.6.                                Powers
and Duties of the Institutional Trustee and the Administrators.


 


(a)                                  The
Institutional Trustee and the Administrators shall conduct the affairs of the
Trust in accordance with the terms of this Declaration.  Subject to the limitations set forth in
paragraph (b) of this Section, and in accordance with the following
provisions (i) and (ii), the Institutional Trustee and the Administrators
shall have the authority to enter into all transactions and agreements
determined by the Institutional Trustee to be appropriate in exercising the
authority, express or implied, otherwise granted to the Institutional Trustee
or the Administrators, as the case may be, under this Declaration, and to
perform all acts in furtherance thereof, including without limitation, the
following:


 


(i)                                     Each
Administrator shall have the power and authority to act on behalf of the Trust
with respect to the following matters:


 


(A)  the
issuance and sale of the Securities;


 


(B)  to
cause the Trust to enter into, and to execute and deliver on behalf of the
Trust, such agreements as may be necessary or desirable in connection with the
purposes and function of the Trust, including agreements with the Paying Agent;


 


(C)  ensuring
compliance with the Securities Act, applicable state securities or blue sky
laws;


 


(D)  the
sending of notices (other than notices of default), and other information
regarding the Securities and the Debentures to the Holders in accordance with
this Declaration;


 


(E)  the
consent to the appointment of a Paying Agent, Transfer Agent and Registrar in
accordance with this Declaration, which consent shall not be unreasonably
withheld or delayed;


 


(F)  execution
and delivery of the Securities in accordance with this Declaration;


 


(G)  execution
and delivery of closing certificates pursuant to the Placement Agreement and
the application for a taxpayer identification number;


 


(H)  unless
otherwise determined by the Holders of a Majority in liquidation amount of the
Securities or as otherwise required by the Statutory Trust Act, to execute on
behalf of the Trust (either acting alone or together with any or all of the
Administrators) any documents that the Administrators have the power to execute
pursuant to this Declaration;


 


(I)  the
taking of any action incidental to the foregoing as the Institutional Trustee
may from time to time determine is necessary or advisable to give effect to the
terms of


 


8





















 


this Declaration for the benefit of the Holders (without consideration
of the effect of any such action on any particular Holder);


 


(J)  to
establish a record date with respect to all actions to be taken hereunder that
require a record date be established, including Distributions, voting rights,
redemptions and exchanges, and to issue relevant notices to the Holders of
Capital Securities and Holders of Common Securities as to such actions and
applicable record dates; and


 


(K)  to
duly prepare and file all applicable tax returns and tax information reports
that are required to be filed with respect to the Trust on behalf of the Trust.


 


(ii)                                  As
among the Institutional Trustee and the Administrators, the Institutional
Trustee shall have the power, duty and authority to act on behalf of the Trust
with respect to the following matters:


 


(A)  the
establishment of the Property Account;


 


(B)  the
receipt of the Debentures;


 


(C)  the
collection of interest, principal and any other payments made in respect of the
Debentures in the Property Account;


 


(D)  the
distribution through the Paying Agent of amounts owed to the Holders in respect
of the Securities;


 


(E)  the
exercise of all of the rights, powers and privileges of a holder of the
Debentures;


 


(F)  the
sending of notices of default and other information regarding the Securities
and the Debentures to the Holders in accordance with this Declaration;


 


(G)  the
distribution of the Trust Property in accordance with the terms of this
Declaration;


 


(H)  to
the extent provided in this Declaration, the winding up of the affairs of and
liquidation of the Trust and the preparation, execution and filing of the
certificate of cancellation with the Secretary of State of the State of
Connecticut;


 


(I)  after
any Event of Default (provided that such Event of Default is not by or
with respect to the Institutional Trustee) the taking of any action incidental
to the foregoing as the Institutional Trustee may from time to time determine
is necessary or advisable to give effect to the terms of this Declaration and
protect and conserve the Trust Property for the benefit of the Holders (without
consideration of the effect of any such action on any particular Holder); and


 


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


 


(iii)                               The
Institutional Trustee shall have the power and authority to act on behalf of
the Trust with respect to any of the duties, liabilities, powers or the authority
of the


 


9





















 


Administrators set forth in Section 2.6(a)(i)(D), (E) and (F)
herein but shall not have a duty to do any such act unless specifically
requested to do so in writing by the Sponsor, and shall then be fully protected
in acting pursuant to such written request; and in the event of a conflict
between the action of the Administrators and the action of the Institutional
Trustee, the action of the Institutional Trustee shall prevail.


 


(b)                                 So
long as this Declaration remains in effect, the Trust (or the Institutional
Trustee or Administrators acting on behalf of the Trust) shall not undertake
any business, activities or transaction except as expressly provided herein or
contemplated hereby. In particular, neither the Institutional Trustee nor the
Administrators may cause the Trust to (i) acquire any investments or
engage in any activities not authorized by this Declaration, (ii) sell,
assign, transfer, exchange, mortgage, pledge, set-off or otherwise dispose of
any of the Trust Property or interests therein, including to Holders, except as
expressly provided herein, (iii) take any action that would reasonably be
expected (x) to cause the Trust to fail or cease to qualify as a “grantor trust”
for United States federal income tax purposes or (y) to require the trust to
register as an Investment Company under the Investment Company Act, (iv) incur
any indebtedness for borrowed money or issue any other debt or (v) take or
consent to any action that would result in the placement of a lien on any of
the Trust Property.  The Institutional
Trustee shall, at the sole cost and expense of the Trust, defend all claims and
demands of all Persons at any time claiming any lien on any of the Trust
Property adverse to the interest of the Trust or the Holders in their capacity
as Holders.


 


(c)                                  In
connection with the issuance and sale of the Capital Securities, the Sponsor
shall have the right and responsibility to assist the Trust with respect to, or
effect on behalf of the Trust, the following (and any actions taken by the
Sponsor in furtherance of the following prior to the date of this Declaration
are hereby ratified and confirmed in all respects):


 


(i)                                     the
taking of any action necessary to obtain an exemption from the Securities Act;


 


(ii)                                  the
determination of the States in which to take appropriate action to qualify or
register for sale all or part of the Capital Securities and the determination
of any and all such acts, other than actions which must be taken by or on
behalf of the Trust, and the advice to the Administrators of actions they must
take on behalf of the Trust, and the preparation for execution and filing of
any documents to be executed and filed by the Trust or on behalf of the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States in connection with the sale of the Capital
Securities;


 


(iii)                               the
negotiation of the terms of, and the execution and delivery of, the Placement
Agreement providing for the sale of the Capital Securities; and


 


(iv)                              the
taking of any other actions necessary or desirable to carry out any of the
foregoing activities.


 


(d)                                 Notwithstanding
anything herein to the contrary, the Administrators and the Holders of a
Majority in liquidation amount of the Common Securities are authorized and
directed to conduct the affairs of the Trust and to operate the Trust so that
the Trust will not (i) be deemed to be an Investment Company required to be
registered under the Investment Company Act, and (ii) fail to be
classified as a “grantor trust” for United States federal income tax
purposes.  The Administrators and the
Holders of a Majority in liquidation amount of the Common Securities shall not
take any action inconsistent with the treatment of the Debentures as
indebtedness of the Debenture Issuer for United States federal income tax
purposes.  In this connection, the
Administrators and the Holders of a Majority in liquidation amount of the
Common Securities are authorized to take any action, not inconsistent with
applicable laws, the


 


10





















 


Certificate of Trust or this Declaration, as amended
from time to time, that each of the Administrators and the Holders of a
Majority in liquidation amount of the Common Securities determines in their
discretion to be necessary or desirable for such purposes.


 


(e)                                  All
expenses incurred by the Administrators or the Institutional Trustee pursuant
to this Section 2.6 shall be reimbursed by the Sponsor, and the
Institutional Trustee and the Administrators shall have no obligations with
respect to such expenses.


 


(f)                                    The
assets of the Trust shall consist of the Trust Property.


 


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


 


(h)                                 If
the Institutional Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Declaration and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Institutional Trustee or to such Holder, then and in every such case the
Sponsor, the Institutional Trustee and the Holders shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Institutional Trustee and the Holders shall continue as though no such
proceeding had been instituted.


 


Section 2.7.                                Prohibition
of Actions by the Trust and the Institutional Trustee.


 


(a)                                  The
Trust shall not, and the Institutional Trustee shall cause the Trust not to,
engage in any activity other than as required or authorized by this
Declaration.  In particular, the Trust
shall not and the Institutional Trustee shall cause the Trust not to:


 


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


 


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


 


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


 


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


 


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


 


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


 


(vii)                           carry
on any “trade or business” as that phrase is used in the Code; or


 


(viii)                        other than
as provided in this Declaration (including Annex I), (A) direct the
time, method and place of exercising any trust or power conferred upon the
Debenture Trustee with respect to the Debentures, (B) waive any past
default that is waivable under the Indenture, (C) exercise any right to
rescind or annul any declaration that the principal of all the Debentures shall
be due and payable, or (D) consent to any amendment, modification or
termination of the Indenture or the Debentures where such consent shall be
required unless the Trust shall have


 


11





















 


received a written opinion of counsel to the effect that such
modification will not cause the Trust to cease to be classified as a “grantor
trust” for United States federal income tax purposes.


 


Section 2.8.                                Powers
and Duties of the Institutional Trustee.


 


(a)                                  The
legal title to the Debentures shall be owned by and held of record in the name
of the Institutional Trustee in trust for the benefit of the Trust and the
Holders of the Securities.  The right,
title and interest of the Institutional Trustee to the Debentures shall vest
automatically in each Person who may hereafter be appointed as Institutional
Trustee in accordance with Section 4.3. 
Such vesting and cessation of title shall be effective whether or not
conveyancing documents with regard to the Debentures have been executed and
delivered.


 


(b)                                 The
Institutional Trustee shall not transfer its right, title and interest in the
Debentures to the Administrators.


 


(c)                                  The
Institutional Trustee shall:


 


(i)                                     establish
and maintain a segregated non-interest bearing trust account (the “Property
Account”) in the name of and under the exclusive control of the
Institutional Trustee, and maintained in the Institutional Trustee’s trust
department, on behalf of the Holders of the Securities and, upon the receipt of
payments of funds made in respect of the Debentures held by the Institutional
Trustee, deposit such funds into the Property Account and make payments, or
cause the Paying Agent to make payments, to the Holders of the Capital
Securities and Holders of the Common Securities from the Property Account in
accordance with Section 5.1.  Funds
in the Property Account shall be held uninvested until disbursed in accordance
with this Declaration;


 


(ii)                                  engage
in such ministerial activities as shall be necessary or appropriate to effect
the redemption of the Capital Securities and the Common Securities to the
extent the Debentures are redeemed or mature; and


 


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


 


(d)                                 The
Institutional Trustee may bring or defend, pay, collect, compromise, arbitrate,
resort to legal action with respect to, or otherwise adjust claims or demands
of or against, the Trust which arises out of or in connection with an Event of
Default of which a Responsible Officer of the Institutional Trustee has actual
knowledge or arises out of the Institutional Trustee’s duties and obligations
under this Declaration; provided, however, that if an Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Debenture Issuer to pay interest or principal on the Debentures
on the date such interest or principal is otherwise payable (or in the case of
redemption, on the redemption date), then a Holder of the Capital Securities
may directly institute a proceeding for enforcement of payment to such Holder
of the principal of or interest on the Debentures having a principal amount
equal to the aggregate liquidation amount of the Capital Securities of such
Holder (a “Direct Action”) on or after the respective due date specified
in the Debentures.  In connection with
such Direct Action, the rights of the Holders of the Common Securities will be
subrogated to the rights of such Holder of the Capital Securities to the extent
of any payment made by the Debenture Issuer to such Holder of the Capital
Securities in such Direct Action; provided, however, that no
Holder of the Common Securities may exercise such right of subrogation so long
as an Event of Default with respect to the Capital Securities has occurred and
is continuing.


 


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(e)                                  The
Institutional Trustee shall continue to serve as a Trustee until either:


 


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


 


(ii)                                  a
Successor Institutional Trustee has been appointed and has accepted that
appointment in accordance with Section 4.3.


 


(f)                                    The
Institutional Trustee shall have the legal power to exercise all of the rights,
powers and privileges of a Holder of the Debentures under the Indenture and, if
an Event of Default occurs and is continuing, the Institutional Trustee may,
for the benefit of Holders of the Securities, enforce its rights as holder of
the Debentures subject to the rights of the Holders pursuant to this
Declaration (including Annex I) and the terms of the Securities.


 


The Institutional Trustee must exercise the powers set
forth in this Section 2.8 in a manner that is consistent with the purposes
and functions of the Trust set out in Section 2.3, and the Institutional
Trustee shall not take any action that is inconsistent with the purposes and
functions of the Trust set out in Section 2.3.


 


Section 2.9.                                Certain
Duties and Responsibilities of the Institutional Trustee and Administrators.


 


(a)                                  The
Institutional Trustee, before the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Institutional Trustee.  In
case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 6.7), the Institutional Trustee shall exercise such of
the rights and powers vested in it by this Declaration, and use the same degree
of care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.


 


(b)                                 The
duties and responsibilities of the Institutional Trustee and the Administrators
shall be as provided by this Declaration. 
Notwithstanding the foregoing, no provision of this Declaration shall
require the Institutional Trustee or Administrators to expend or risk their own
funds or otherwise incur any financial liability in the performance of any of
their duties hereunder, or in the exercise of any of their rights or powers if
it shall have reasonable grounds to believe that repayment of such funds or
adequate protection against such risk of liability is not reasonably assured to
it.  Whether or not therein expressly so
provided, every provision of this Declaration relating to the conduct or
affecting the liability of or affording protection to the Institutional Trustee
or Administrators shall be subject to the provisions of this Article.  Nothing in this Declaration shall be
construed to relieve an Administrator or the Institutional Trustee from
liability for its own negligent act, its own negligent failure to act, or its
own willful misconduct.  To the extent
that, at law or in equity, the Institutional Trustee or an Administrator has
duties and liabilities relating to the Trust or to the Holders, the
Institutional Trustee or such Administrator shall not be liable to the Trust or
to any Holder for the Institutional Trustee’s or such Administrator’s good
faith reliance on the provisions of this Declaration.  The provisions of this Declaration, to the
extent that they restrict the duties and liabilities of the Administrators or
the Institutional Trustee otherwise existing at law or in equity, are agreed by
the Sponsor and the Holders to replace such other duties and liabilities of the
Administrators or the Institutional Trustee.


 


(c)                                  All
payments made by the Institutional Trustee or a Paying Agent in respect of the
Securities shall be made only from the revenue and proceeds from the Trust
Property and only to the extent that there shall be sufficient revenue or
proceeds from the Trust Property to enable the Institutional


 


13





















 


Trustee or a Paying Agent to make payments in
accordance with the terms hereof.  Each
Holder, by its acceptance of a Security, agrees that it will look solely to the
revenue and proceeds from the Trust Property to the extent legally available
for distribution to it as herein provided and that the Institutional Trustee
and the Administrators are not personally liable to it for any amount
distributable in respect of any Security or for any other liability in respect
of any Security.  This Section 2.9(c)
does not limit the liability of the Institutional Trustee expressly set forth
elsewhere in this Declaration.


 


(d)                                 The
Institutional Trustee shall not be liable for its own acts or omissions
hereunder except as a result of its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:


 


(i)                                     the
Institutional Trustee shall not be liable for any error of judgment made in
good faith by an Authorized Officer of the Institutional Trustee, unless it
shall be proved that the Institutional Trustee was negligent in ascertaining
the pertinent facts;


 


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


 


(iii)                               the
Institutional Trustee’s sole duty with respect to the custody, safekeeping and
physical preservation of the Debentures and the Property Account shall be to
deal with such property in a similar manner as the Institutional Trustee deals
with similar property for its fiduciary accounts generally, subject to the
protections and limitations on liability afforded to the Institutional Trustee
under this Declaration;


 


(iv)                              the
Institutional Trustee shall not be liable for any interest on any money
received by it except as it may otherwise agree in writing with the Sponsor;
and money held by the Institutional Trustee need not be segregated from other
funds held by it except in relation to the Property Account maintained by the
Institutional Trustee pursuant to Section 2.8(c)(i) and except to the
extent otherwise required by law; and


 


(v)                                 the
Institutional Trustee shall not be responsible for monitoring the compliance by
the Administrators or the Sponsor with their respective duties under this
Declaration, nor shall the Institutional Trustee be liable for any default or
misconduct of the Administrators or the Sponsor.


 


Section 2.10.                         Certain
Rights of Institutional Trustee.  Subject
to the provisions of Section 2.9:


 


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


 


(b)                                 if
(i) in performing its duties under this Declaration, the Institutional
Trustee is required to decide between alternative courses of action, (ii) in
construing any of the provisions of this Declaration, the Institutional Trustee
finds the same ambiguous or inconsistent with any other provisions contained


 


14





















 


herein, or (iii) the Institutional Trustee is
unsure of the application of any provision of this Declaration, then, except as
to any matter as to which the Holders of Capital Securities are entitled to
vote under the terms of this Declaration, the Institutional Trustee may deliver
a notice to the Sponsor requesting the Sponsor’s written instructions as to the
course of action to be taken and the Institutional Trustee shall take such
action, or refrain from taking such action, as the Institutional Trustee shall
be instructed in writing, in which event the Institutional Trustee shall have
no liability except for its own negligence or willful misconduct;


 


(c)                                  any
direction or act of the Sponsor or the Administrators contemplated by this
Declaration shall be sufficiently evidenced by an Officers’ Certificate;


 


(d)                                 whenever
in the administration of this Declaration, the Institutional Trustee shall deem
it desirable that a matter be proved or established before undertaking,
suffering or omitting any action hereunder, the Institutional Trustee (unless
other evidence is herein specifically prescribed) may request and conclusively
rely upon an Officers’ Certificate as to factual matters which, upon receipt of
such request, shall be promptly delivered by the Sponsor or the Administrators;


 


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


 


(f)                                    the
Institutional Trustee may consult with counsel of its selection (which counsel
may be counsel to the Sponsor or any of its Affiliates) and the advice of such
counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon and in accordance with such advice; the Institutional Trustee
shall have the right at any time to seek instructions concerning the
administration of this Declaration from any court of competent jurisdiction;


 


(g)                                 the
Institutional Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Declaration at the request or direction of any
of the Holders pursuant to this Declaration, unless such Holders shall have
offered to the Institutional Trustee security or indemnity reasonably
satisfactory to it against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction; provided,
that nothing contained in this Section 2.10(g) shall be taken to relieve
the Institutional Trustee, subject to Section 2.9(b), upon the occurrence
of an Event of Default (that has not been cured or waived pursuant to Section 6.7),
to exercise such of the rights and powers vested in it by this Declaration, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs;


 


(h)                                 the
Institutional Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, debenture,
note or other evidence of indebtedness or other paper or document, unless
requested in writing to do so by one or more Holders, but the Institutional
Trustee may make such further inquiry or investigation into such facts or
matters as it may see fit;


 


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


 


(j)                                     whenever
in the administration of this Declaration the Institutional Trustee shall deem
it desirable to receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder the Institutional Trustee (i) may
request instructions from the Holders of the Capital Securities


 


15





















 


which instructions may only be given by the Holders of
the same proportion in liquidation amount of the Capital Securities as would be
entitled to direct the Institutional Trustee under the terms of the Capital
Securities in respect of such remedy, right or action, (ii) may refrain
from enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be fully protected in acting in
accordance with such instructions;


 


(k)                                  except
as otherwise expressly provided in this Declaration, the Institutional Trustee
shall not be under any obligation to take any action that is discretionary
under the provisions of this Declaration;


 


(l)                                     when
the Institutional Trustee incurs expenses or renders services in connection
with a Bankruptcy Event, such expenses (including the fees and expenses of its
counsel) and the compensation for such services are intended to constitute
expenses of administration under any bankruptcy law or law relating to creditors
rights generally;


 


(m)                               the
Institutional Trustee shall not be charged with knowledge of an Event of
Default unless a Responsible Officer of the Institutional Trustee obtains
actual knowledge of such event or the Institutional Trustee receives written
notice of such event from any Holder, the Sponsor or the Debenture Trustee;


 


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


 


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


 


Section 2.11.                         Execution
of Documents.  Unless otherwise
determined in writing by the Institutional Trustee, and except as otherwise
required by the Statutory Trust Act, the Institutional Trustee, or any one or
more of the Administrators, as the case may be, is authorized to execute on
behalf of the Trust any documents that the Institutional Trustee or the
Administrators, as the case may be, have the power and authority to execute
pursuant to Section 2.6.


 


Section 2.12.                         Not
Responsible for Recitals or Issuance of Securities.  The recitals contained in this
Declaration and the Securities shall be taken as the statements of the Sponsor,
and the Institutional Trustee does not assume any responsibility for their
correctness.  The Institutional Trustee
makes no representations as to the value or condition of the property of the Trust
or any part thereof.  The Institutional
Trustee makes no representations as to the validity or sufficiency of this
Declaration, the Debentures or the Securities.


 


Section 2.13.                         Duration
of Trust.  The Trust, unless
earlier dissolved pursuant to the provisions of Article VII hereof, shall
be in existence for 35 years from the Closing Date.


 


16





















 


Section 2.14.                         Mergers.


 


(a)                                  The
Trust may not consolidate, amalgamate, merge with or into, or be replaced by,
or convey, transfer or lease its properties and assets substantially as an
entirety to any corporation or other body, except as described in Section 2.14(b)
and (c) and except in connection with the liquidation of the Trust and the
distribution of the Debentures to Holders of Securities pursuant to Section 7.1(a)(iv)
of the Declaration or Section 4 of Annex I.


 


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


 


(i)                                     if
the Trust is not the surviving entity, such successor entity (the “Successor
Entity”) either:


 


(A)  expressly
assumes all of the obligations of the Trust under the Securities; or


 


(B)  substitutes
for the Securities other securities having substantially the same terms as the
Securities (the “Successor Securities”) so that the Successor Securities
rank the same as the Securities rank with respect to Distributions and payments
upon Liquidation, redemption and otherwise;


 


(ii)                                  the
Sponsor expressly appoints a trustee of the Successor Entity that possesses
substantially the same powers and duties as the Institutional Trustee as the
Holder of the Debentures;


 


(iii)                               such
merger, consolidation, amalgamation or replacement does not adversely affect
the rights, preferences and privileges of the Holders of the Securities
(including any Successor Securities) in any material respect;


 


(iv)                              the
Institutional Trustee receives written confirmation from Moody’s Investor
Services, Inc. and any other nationally recognized statistical rating
organization that rates securities issued by the initial purchaser of the
Capital Securities that it will not reduce or withdraw the rating of any such
securities because of such merger, conversion, consolidation, amalgamation or
replacement;


 


(v)                                 such
Successor Entity has a purpose substantially identical to that of the Trust;


 


(vi)                              prior
to such merger, consolidation, amalgamation or replacement, the Trust has
received an opinion of a nationally recognized independent counsel to the Trust
experienced in such matters to the effect that:


 


(A)  such
merger, consolidation, amalgamation or replacement does not adversely affect
the rights, preferences and privileges of the Holders of the Securities
(including any Successor Securities) in any material respect;


 


(B)  following
such merger, consolidation, amalgamation or replacement, neither the Trust nor
the Successor Entity will be required to register as an Investment Company; and


 


17





















 


(C)  following
such merger, consolidation, amalgamation or replacement, the Trust (or the
Successor Entity) will continue to be classified as a “grantor trust” for
United States federal income tax purposes;


 


(vii)                           the
Sponsor guarantees the obligations of such Successor Entity under the Successor
Securities at least to the extent provided by the Guarantee;


 


(viii)                        the
Sponsor owns 100% of the common securities of any Successor Entity; and


 


(ix)                                prior
to such merger, consolidation, amalgamation or replacement, the Institutional
Trustee shall have received an Officers’ Certificate of the Administrators and
an opinion of counsel, each to the effect that all conditions precedent under
this Section 2.14(b) to such transaction have been satisfied.


 


(c)                                  Notwithstanding
Section 2.14(b), the Trust shall not, except with the consent of Holders
of 100% in aggregate liquidation amount of the Securities, consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit
any other entity to consolidate, amalgamate, merge with or into, or replace it
if such consolidation, amalgamation, merger or replacement would cause the
Trust or Successor Entity to be classified as other than a grantor trust for
United States federal income tax purposes.


 


ARTICLE III



SPONSOR


 


Section 3.1.                                Sponsor’s
Purchase of Common Securities.  On
the Closing Date, the Sponsor will purchase all of the Common Securities issued
by the Trust in an amount at least equal to 3% of the capital of the Trust, at
the same time as the Capital Securities are sold.


 


Section 3.2.                                Responsibilities
of the Sponsor.  In connection
with the issue and sale of the Capital Securities, the Sponsor shall have the
exclusive right and responsibility to engage in, or direct the Administrators
to engage in, the following activities:


 


(a)                                  to
determine the States in which to take appropriate action to qualify 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; and


 


(b)                                 to
negotiate the terms of and/or execute on behalf of the Trust, the Placement
Agreement and other related agreements providing for the sale of the Capital
Securities.


 


Section 3.3.                                Expenses.  In connection with the offering, sale and
issuance of the Debentures to the Trust and in connection with the sale of the
Securities by the Trust, the Sponsor, in its capacity as Debenture Issuer,
shall:


 


(a)                                  pay
all reasonable costs and expenses owing to the Debenture Trustee pursuant to Section 6.6
of the Indenture;


 


(b)                                 be
responsible for and shall pay all debts and obligations (other than with
respect to the Securities) and all costs and expenses of the Trust, the
offering, sale and issuance of the Securities (including fees to the placement
agents in connection therewith), the costs and expenses (including


 


18





















 


reasonable counsel fees and expenses) of the Institutional Trustee and
the Administrators, the costs and expenses relating to the operation of the
Trust, including, without limitation, costs and expenses of accountants,
attorneys, statistical or bookkeeping services, expenses for printing and
engraving and computing or accounting equipment, Paying Agents, Registrars,
Transfer Agents, duplicating, travel and telephone and other telecommunications
expenses and costs and expenses incurred in connection with the acquisition,
financing, and disposition of Trust assets and the enforcement by the
Institutional Trustee of the rights of the Holders (for purposes of
clarification, this Section 3.3(b) does not contemplate the payment by the
Sponsor of acceptance or annual administration fees owing to the Institutional
Trustee pursuant to the services to be provided by the Institutional Trustee
under this Declaration or the fees and expenses of the Institutional Trustee’s
counsel in connection with the closing of the transactions contemplated by this
Declaration); and


 


(c)                                  pay
any and all taxes (other than United States withholding taxes attributable to
the Trust or its assets) and all liabilities, costs and expenses with respect
to such taxes of the Trust.


 


The Sponsor’s obligations under this Section 3.3
shall be for the benefit of, and shall be enforceable by, any Person to whom
such debts, obligations, costs, expenses and taxes are owed (a “Creditor”)
whether or not such Creditor has received notice hereof.  Any such Creditor may enforce the Sponsor’s
obligations under this Section 3.3 directly against the Sponsor and the
Sponsor irrevocably waives any right or remedy to require that any such
Creditor take any action against the Trust or any other Person before
proceeding against the Sponsor.  The
Sponsor agrees to execute such additional agreements as may be necessary or
desirable in order to give full effect to the provisions of this Section 3.3.


 


Section 3.4.                                Right
to Proceed.  The Sponsor
acknowledges the rights of Holders to institute a Direct Action as set forth in
Section 2.8(d) hereto.


 


ARTICLE IV



INSTITUTIONAL TRUSTEE AND ADMINISTRATORS


 


Section 4.1.                                Institutional
Trustee; Eligibility.


 


(a)                                  There
shall at all times be one Institutional Trustee which shall:


 


(i)                                     not
be an Affiliate of the Sponsor;


 


(ii)                                  not
offer or provide credit or credit enhancement to the Trust; and


 


(iii)                               be
a banking corporation or trust company organized and doing business under the
laws of the United States of America or any state thereof or the District of
Columbia, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000.00), and subject to supervision or examination by Federal, state,
or District of Columbia authority.  If
such corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority referred
to above, then for the purposes of this Section 4.1(a)(iii), the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.


 


(b)                                 If
at any time the Institutional Trustee shall cease to be eligible to so act
under Section 4.1(a), the Institutional Trustee shall immediately resign
in the manner and with the effect set forth in Section 4.3(a).


 


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(c)                                  If
the Institutional Trustee has or shall acquire any “conflicting interest”
within the meaning of Section 310(b) of the Trust Indenture Act of 1939,
as amended, the Institutional Trustee shall either eliminate such interest or
resign, to the extent and in the manner provided by, and subject to this
Declaration.


 


(d)                                 The
initial Institutional Trustee shall be U.S. Bank National Association.


 


Section 4.2.                                Administrators.  Each Administrator shall be a U.S.
Person, 21 years of age or older and authorized to bind the Sponsor.  The initial Administrators shall be Jack A.
Sweeney, H. Anthony Gartshore and Thomas McCullough.  There shall at all times be at least one
Administrator.  Except where a
requirement for action by a specific number of Administrators is expressly set
forth in this Declaration and except with respect to any action the taking of
which is the subject of a meeting of the Administrators, any action required or
permitted to be taken by the Administrators may be taken by, and any power of
the Administrators may be exercised by, or with the consent of, any one such
Administrator.


 


Section 4.3.                                Appointment,
Removal and Resignation of Institutional Trustee and Administrators.  


 


(a)                                  Notwithstanding
anything to the contrary in this Declaration, no resignation or removal of the
Institutional Trustee and no appointment of a Successor Institutional Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the Successor Institutional Trustee in accordance with the
applicable requirements of this Section 4.3.


 


Subject to the immediately preceding paragraph, the
Institutional Trustee may resign at any time by giving written notice thereof
to the Holders of the Securities and by appointing a Successor Institutional
Trustee.  Upon the resignation of the
Institutional Trustee, the Institutional Trustee shall appoint a successor by
requesting from at least three Persons meeting the eligibility requirements,
its expenses and charges to serve as the successor Institutional Trustee on a
form provided by the Administrators, and selecting the Person who agrees to the
lowest expense and charges (the “Successor Institutional Trustee”).  If the instrument of acceptance by the
Successor Institutional Trustee required by this Section 4.3 shall not
have been delivered to the Institutional Trustee within 60 days after the
giving of such notice of resignation or delivery of the instrument of removal,
the Institutional Trustee may petition, at the expense of the Trust, any
Federal, state or District of Columbia court of competent jurisdiction for the
appointment of a Successor Institutional Trustee.  Such court may thereupon, after prescribing
such notice, if any, as it may deem proper, appoint a Successor Institutional
Trustee.  The Institutional Trustee shall
have no liability for the selection of such successor pursuant to this Section 4.3.


 


The Institutional Trustee may be removed by the act of
the Holders of a Majority in liquidation amount of the Capital Securities,
delivered to the Institutional Trustee (in its individual capacity and on
behalf of the Trust) if an Event of Default shall have occurred and be
continuing.  If the Institutional Trustee
shall be so removed, the Holders of Capital Securities, by act of the Holders
of a Majority in liquidation amount of the Capital Securities then outstanding
delivered to the Institutional Trustee, shall promptly appoint a Successor Institutional
Trustee, and such Successor Institutional Trustee shall comply with the
applicable requirements of this Section 4.3.  If no Successor Institutional Trustee shall
have been so appointed by the Holders of a Majority in liquidation amount of
the Capital Securities and accepted appointment in the manner required by this Section 4.3,
within 30 days after delivery of an instrument of removal, any Holder who
has been a Holder of the Securities for at least 6 months may, on behalf
of himself and all others similarly situated, petition any Federal, state or
District of Columbia court of competent jurisdiction for the appointment of the
Successor Institutional Trustee.  Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Institutional Trustee.


 


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The Institutional Trustee shall give notice of its
resignation and removal and each appointment of a Successor Institutional
Trustee to all Holders in the manner provided in Section 13.1(d) and shall
give notice to the Sponsor.  Each notice
shall include the name of the Successor Institutional Trustee and the address
of its Corporate Trust Office.


 


(b)                                 In
case of the appointment hereunder of a Successor Institutional Trustee, the
retiring Institutional Trustee and the Successor Institutional Trustee shall execute
and deliver an amendment hereto wherein the Successor Institutional Trustee
shall accept such appointment and which (i) shall contain such provisions
as shall be necessary or desirable to transfer and confirm to, and to vest in,
the Successor Institutional Trustee all the rights, powers, trusts and duties
of the retiring Institutional Trustee with respect to the Securities and the
Trust and (ii) shall add to or change any of the provisions of this
Declaration as shall be necessary to provide for or facilitate the
administration of the Trust by more than one Institutional Trustee, it being
understood that nothing herein or in such amendment shall constitute such
Institutional Trustees co-trustees and upon the execution and delivery of such
amendment the resignation or removal of the retiring Institutional Trustee
shall become effective to the extent provided therein and each Successor
Institutional Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Institutional Trustee; but, on request of the Trust or any Successor
Institutional Trustee such retiring Institutional Trustee shall duly assign,
transfer and deliver to such Successor Institutional Trustee all Trust Property,
all proceeds thereof and money held by such retiring Institutional Trustee
hereunder with respect to the Securities and the Trust.


 


(c)                                  No
Institutional Trustee shall be liable for the acts or omissions to act of any
Successor Institutional Trustee.


 


(d)                                 The
Holders of the Capital Securities will have no right to vote to appoint, remove
or replace the Administrators, which voting rights are vested exclusively in
the Holder of the Common Securities.


 


Section 4.4.                                Institutional
Trustee Vacancies.  If the Institutional
Trustee ceases to hold office for any reason a vacancy shall occur.  A resolution certifying the existence of such
vacancy by the Institutional Trustee shall be conclusive evidence of the
existence of such vacancy.  The vacancy
shall be filled with a trustee appointed in accordance with Section 4.3.


 


Section 4.5.                                Effect
of Vacancies.  The death,
resignation, retirement, removal, bankruptcy, dissolution, liquidation,
incompetence or incapacity to perform the duties of the Institutional Trustee shall
not operate to dissolve, terminate or annul the Trust or terminate this
Declaration.


 


Section 4.6.                                Meetings
of the Institutional Trustee and the Administrators.  Meetings of the Administrators shall be
held from time to time upon the call of an Administrator.  Regular meetings of the Administrators may be
held in person in the United States or by telephone, at a place (if applicable)
and time fixed by resolution of the Administrators.  Notice of any in-person meetings of the
Institutional Trustee with the Administrators or meetings of the Administrators
shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 48 hours
before such meeting.  Notice of any
telephonic meetings of the Institutional Trustee with the Administrators or
meetings of the Administrators or any committee thereof shall be hand delivered
or otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 24 hours before a meeting.  Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting.  The presence (whether in person or by
telephone) of the Institutional Trustee or an Administrator, as the case may
be, at a meeting shall constitute a waiver of notice of such meeting except
where the Institutional Trustee or an Administrator, as the case may be,
attends a meeting for the express purpose of objecting to the transaction of
any activity on the grounds that the meeting has not


 


21





















 


been lawfully called or convened.  Unless provided otherwise in this
Declaration, any action of the Institutional Trustee or the Administrators, as
the case may be, may be taken at a meeting by vote of the Institutional Trustee
or a majority vote of the Administrators present (whether in person or by
telephone) and eligible to vote with respect to such matter, provided that a
Quorum is present, or without a meeting by the unanimous written consent of the
Institutional Trustee or the Administrators. 
Meetings of the Institutional Trustee and the Administrators together
shall be held from time to time upon the call of the Institutional Trustee or
an Administrator.


 


Section 4.7.                                Delegation
of Power.


 


(a)                                  Any
Administrator may, by power of attorney consistent with applicable law,
delegate to any other natural person over the age of 21 that is a U.S. Person
his or her power for the purpose of executing any documents contemplated in Section 2.6;
and


 


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


 


Section 4.8.                                Conversion,
Consolidation or Succession to Business. 
Any Person into which the Institutional Trustee may be merged or
converted or with which it may be consolidated, or any Person resulting from
any merger, conversion or consolidation to which the Institutional Trustee
shall be a party, or any Person succeeding to all or substantially all the corporate
trust business of the Institutional Trustee shall be the successor of the
Institutional Trustee 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.


 


ARTICLE V



DISTRIBUTIONS


 


Section 5.1.                                Distributions.  Holders shall receive Distributions in
accordance with the applicable terms of the relevant Holder’s Securities.
Distributions shall be made on the Capital Securities and the Common Securities
in accordance with the preferences set forth in their respective terms.  If and to the extent that the Debenture
Issuer makes a payment of Interest or any principal on the Debentures held by
the Institutional Trustee, the Institutional Trustee shall and is directed, to
the extent funds are available for that purpose, to make a distribution (a “Distribution”)
of such amounts to Holders.


 


ARTICLE VI



ISSUANCE OF SECURITIES


 


Section 6.1.                                General
Provisions Regarding Securities.


 


(a)                                  The
Administrators shall, on behalf of the Trust, issue one series of capital
securities substantially in the form of Exhibit A-1 representing undivided
beneficial interests in the assets of the Trust having such terms as are set
forth in Annex I and one series of common securities representing
undivided beneficial interests in the assets of the Trust having such terms as
are set forth in Annex I.  The Trust
shall issue no securities or other interests in the assets of the Trust other
than the Capital Securities and the Common Securities.  The Capital Securities rank pari passu to, and payment thereon shall be made Pro Rata
with, the Common Securities except that, where an Event of Default has occurred
and is


 


22





















 


continuing, the rights of Holders of the Common
Securities to payment in respect of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights to payment
of the Holders of the Capital Securities as set forth in Annex I.


 


(b)                                 The
Certificates shall be signed on behalf of the Trust by one or more
Administrators. Such signature shall be the facsimile or manual signature of
any Administrator.  In case any
Administrator of the Trust who shall have signed any of the Securities shall
cease to be such Administrator before the Certificates so signed shall be
delivered by the Trust, such Certificates nevertheless may be delivered as
though the person who signed such Certificates had not ceased to be such Administrator,
and any Certificate may be signed on behalf of the Trust by such persons who,
at the actual date of execution of such Security, shall be an Administrator of
the Trust, although at the date of the execution and delivery of the
Declaration any such person was not such an Administrator.  A Capital Security shall not be valid until
authenticated by the facsimile or manual signature of an Authorized Officer of
the Institutional Trustee.  Such
signature shall be conclusive evidence that the Capital Security has been
authenticated under this Declaration. 
Upon written order of the Trust signed by one Administrator, the
Institutional Trustee shall authenticate the Capital Securities for original
issue.  The Institutional Trustee may
appoint an authenticating agent that is a U.S. Person acceptable to the Trust
to authenticate the Capital Securities. 
A Common Security need not be so authenticated.


 


(c)                                  The
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.


 


(d)                                 Upon
issuance of the Securities as provided in this Declaration, the Securities so
issued shall be deemed to be validly issued, fully paid and, except as provided
in Section 9.1(b) with respect to the Common Securities, non-assessable.


 


(e)                                  Every
Person, by virtue of having become a Holder in accordance with the terms of
this Declaration, shall be deemed to have expressly assented and agreed to the
terms of, and shall be bound by, this Declaration and the Guarantee.


 


Section 6.2.                                Paying
Agent, Transfer Agent and Registrar. 
The Trust shall maintain in Hartford, Connecticut, an office or
agency where the Capital Securities may be presented for payment (“Paying
Agent”), and an office or agency where Securities may be presented for
registration of transfer or exchange (the “Transfer Agent”).  The Trust shall keep or cause to be kept at
such office or agency a register for the purpose of registering Securities,
transfers and exchanges of Securities, such register to be held by a registrar
(the “Registrar”).  The
Administrators may appoint the Paying Agent, the Registrar and the Transfer
Agent and may appoint one or more additional Paying Agents or one or more co-Registrars,
or one or more co-Transfer Agents in such other locations as it shall
determine.  The term “Paying Agent”
includes any additional paying agent, the term “Registrar” includes any
additional registrar or co-Registrar and the term “Transfer Agent”
includes any additional transfer agent. 
The Administrators may change any Paying Agent, Transfer Agent or
Registrar at any time without prior notice to any Holder.  The Administrators shall notify the Institutional
Trustee of the name and address of any Paying Agent, Transfer Agent and
Registrar not a party to this Declaration. 
The Administrators hereby initially appoint the Institutional Trustee to
act as Paying Agent, Transfer Agent and Registrar for the Capital Securities
and the Common Securities.  The
Institutional Trustee or any of its Affiliates in the United States may act as
Paying Agent, Transfer Agent or Registrar.


 


Section 6.3.                                Form
and Dating.  The Capital
Securities and the Institutional Trustee’s certificate of authentication
thereon shall be substantially in the form of Exhibit A-1, and the Common
Securities shall be substantially in the form of Exhibit A-2, each of
which is hereby incorporated in and expressly made a part of this
Declaration.  Certificates may be typed,
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Administrators, as conclusively 


 


23





















 


evidenced by their execution thereof.  The Securities may have letters, numbers,
notations or other marks of identification or designation and such legends or
endorsements required by law, stock exchange rule, agreements to which the
Trust is subject if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Sponsor).  The Trust at the direction of the Sponsor
shall furnish any such legend not contained in Exhibit A-1 to the
Institutional Trustee in writing.  Each
Capital Security shall be dated on or before the date of its
authentication.  The terms and provisions
of the Securities set forth in Annex I and the forms of Securities set forth in
Exhibits A-1 and A-2 are part of the terms of this Declaration and to the
extent applicable, the Institutional Trustee, the Administrators and the
Sponsor, by their execution and delivery of this Declaration, expressly agree
to such terms and provisions and to be bound thereby.  Capital Securities will be issued only in
blocks having a stated liquidation amount of not less than $100,000.00 and any
multiple of $1,000.00 in excess thereof.


 


The Capital Securities are being offered and sold by
the Trust pursuant to the Placement Agreement in definitive, registered form
without coupons and with the Restricted Securities Legend.


 


Section 6.4.                                Mutilated,
Destroyed, Lost or Stolen Certificates.


 


If:


 


(a)                                  any
mutilated Certificates should be surrendered to the Registrar, or if the
Registrar shall receive evidence to its satisfaction of the destruction, loss
or theft of any Certificate; and


 


(b)                                 there
shall be delivered to the Registrar, the Administrators and the Institutional
Trustee such security or indemnity as may be required by them to keep each of
them harmless;


 


then, in the absence of notice that such Certificate
shall have been acquired by a protected purchaser, an Administrator on behalf
of the Trust shall execute (and in the case of a Capital Security Certificate,
the Institutional Trustee shall authenticate) and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like denomination.  In
connection with the issuance of any new Certificate under this Section 6.4,
the Registrar or the Administrators may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
therewith.  Any duplicate Certificate
issued pursuant to this Section shall constitute conclusive evidence of an
ownership interest in the relevant Securities, as if originally issued, whether
or not the lost, stolen or destroyed Certificate shall be found at any time.


 


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


 


Section 6.6.                                Cancellation.  The Administrators at any time may
deliver Securities to the Institutional Trustee for cancellation.  The Registrar shall forward to the
Institutional Trustee any Securities surrendered to it for registration of
transfer, redemption or payment.  The
Institutional Trustee shall promptly cancel all Securities surrendered for
registration of transfer, payment, replacement or cancellation and shall
dispose of such canceled Securities as the Administrators direct.  The Administrators may not issue new
Securities to replace Securities that have been paid or that have been delivered
to the Institutional Trustee for cancellation.


 


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Section 6.7.                                Rights
of Holders; Waivers of Past Defaults.


 


(a)                                  The
legal title to the Trust Property is vested exclusively in the Institutional
Trustee (in its capacity as such) in accordance with Section 2.5, and the
Holders shall not have any right or title therein other than the undivided
beneficial interest in the assets of the Trust conferred by their Securities
and they shall have no right to call for any partition or division of property,
profits or rights of the Trust except as described below.  The Securities shall be personal property
giving only the rights specifically set forth therein and in this Declaration.  The Securities shall have no preemptive or
similar rights.


 


(b)                                 For
so long as any Capital Securities remain outstanding, if upon an Indenture
Event of Default, the Debenture Trustee fails or the holders of not less than
25% in principal amount of the outstanding Debentures fail to declare the
principal of all of the Debentures to be immediately due and payable, the
Holders of a Majority in liquidation amount of the Capital Securities then
outstanding shall have the right to make such declaration by a notice in
writing to the Institutional Trustee, the Sponsor and the Debenture Trustee.


 


At any time after a declaration of acceleration with
respect to the Debentures has been made and before a judgment or decree for
payment of the money due has been obtained by the Debenture Trustee as provided
in the Indenture, if the Institutional Trustee, subject to the provisions
hereof, fails to annul any such declaration and waive such default, the Holders
of a Majority in liquidation amount of the Capital Securities, by written
notice to the Institutional Trustee, the Sponsor and the Debenture Trustee, may
rescind and annul such declaration and its consequences if:


 


(i)                                     the
Debenture Issuer has paid or deposited with the Debenture Trustee a sum
sufficient to pay


 


(A)  all
overdue installments of interest on all of the Debentures,


 


(B)  any
accrued Additional Interest on all of the Debentures,


 


(C)  the
principal of (and premium, if any, on) any Debentures that have become due
otherwise than by such declaration of acceleration and interest and Additional
Interest thereon at the rate borne by the Debentures, and


 


(D)  all
sums paid or advanced by the Debenture Trustee under the Indenture and the
reasonable compensation, expenses, disbursements and advances of the Debenture
Trustee and the Institutional Trustee, their agents and counsel; and


 


(ii)                                  all
Events of Default with respect to the Debentures, other than the non-payment of
the principal of the Debentures that has become due solely by such
acceleration, have been cured or waived as provided in Section 5.7 of the
Indenture.


 


The Holders of at least a Majority in liquidation
amount of the Capital Securities may, on behalf of the Holders of all the
Capital Securities, waive any past default under the Indenture or any Indenture
Event of Default, except a default or Indenture Event of Default in the payment
of principal or interest on the Debentures (unless such default or Indenture
Event of Default has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration has
been deposited with the Debenture Trustee) or a default under the Indenture or
an Indenture Event of Default in respect of a covenant or provision that under
the Indenture cannot be modified or amended without the consent of the holder
of each outstanding Debenture.  No such
rescission shall affect any subsequent default or impair any right consequent
thereon.


 


25





















 


Upon receipt by the Institutional Trustee of written
notice declaring such an acceleration, or rescission and annulment thereof, by
Holders of any part of the Capital Securities, a record date shall be
established for determining Holders of outstanding Capital Securities entitled
to join in such notice, which record date shall be at the close of business on
the day the Institutional Trustee receives such notice.  The Holders on such record date, or their
duly designated proxies, and only such Persons, shall be entitled to join in
such notice, whether or not such Holders remain Holders after such record date;
provided, that unless such declaration of acceleration, or rescission
and annulment, as the case may be, shall have become effective by virtue of the
requisite percentage having joined in such notice prior to the day that is 90 days
after such record date, such notice of declaration of acceleration, or
rescission and annulment, as the case may be, shall automatically and without
further action by any Holder be canceled and of no further effect.  Nothing in this paragraph shall prevent a
Holder, or a proxy of a Holder, from giving, after expiration of such 90-day
period, a new written notice of declaration of acceleration, or rescission and
annulment thereof, as the case may be, that is identical to a written notice
that has been canceled pursuant to the proviso to the preceding sentence, in
which event a new record date shall be established pursuant to the provisions
of this Section 6.7.


 


(c)                                  Except
as otherwise provided in paragraphs (a) and (b) of this Section 6.7,
the Holders of at least a Majority in liquidation amount of the Capital
Securities may, on behalf of the Holders of all the Capital Securities, waive
any past default or Event of Default and its consequences.  Upon such waiver, any such default or Event
of Default shall cease to exist, and any default or Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Declaration, but no such waiver shall extend to any subsequent or other default
or Event of Default or impair any right consequent thereon.


 


ARTICLE VII



DISSOLUTION AND TERMINATION OF TRUST


 


Section 7.1.                                Dissolution
and Termination of Trust.


 


(a)                                  The
Trust shall dissolve on the first to occur of:


 


(i)                                     unless
earlier dissolved, on March 17, 2039, the expiration of the term of the
Trust;


 


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


 


(iii)                               upon
the filing of a certificate of dissolution or its equivalent with respect to
the Sponsor (other than in connection with a merger, consolidation or similar
transaction not prohibited by the Indenture, this Declaration or the Guarantee,
as the case may be) or upon the revocation of the charter of the Sponsor and
the expiration of 90 days after the date of revocation without a
reinstatement thereof;


 


(iv)                              upon
the distribution of the Debentures to the Holders of the Securities, upon
exercise of the right of the Holder of all of the outstanding Common Securities
to dissolve the Trust as provided in Annex I hereto;


 


(v)                                 upon
the entry of a decree of judicial dissolution of the Holder of the Common
Securities, the Sponsor, the Trust or the Debenture Issuer;


 


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


 


(vii)                           before
the issuance of any Securities, with the consent of the Institutional Trustee
and the Sponsor.


 


(b)                                 As
soon as is practicable after the occurrence of an event referred to in Section 7.1(a),
and after satisfaction of liabilities to creditors of the Trust as required by
applicable law, including of the Statutory Trust Act, and subject to the terms
set forth in Annex I, the Institutional Trustee shall terminate the Trust
by filing a certificate of cancellation with the Secretary of State of the
State of Connecticut.


 


(c)                                  The
provisions of Section 2.9 and Article IX shall survive the
termination of the Trust.


 


ARTICLE VIII



TRANSFER OF INTERESTS


 


Section 8.1.                                General.


 


(a)                                  Subject
to Section 8.1(c), where Capital Securities are presented to the Registrar
or a co-registrar with a request to register a transfer or to exchange them for
an equal number of Capital Securities represented by different certificates,
the Registrar shall register the transfer or make the exchange if its
requirements for such transactions are met. 
To permit registrations of transfer and exchanges, the Trust shall issue
and the Institutional Trustee shall authenticate Capital Securities at the
Registrar’s request.


 


(b)                                 Upon
issuance of the Common Securities, the Sponsor shall acquire and retain
beneficial and record ownership of the Common Securities and for so long as the
Securities remain outstanding, the Sponsor shall maintain 100% ownership of the
Common Securities; provided, however, that any permitted
successor of the Sponsor, in its capacity as Debenture Issuer, under the
Indenture that is a U.S. Person may succeed to the Sponsor’s ownership of the
Common Securities.


 


(c)                                  Capital
Securities may only be transferred, in whole or in part, in accordance with the
terms and conditions set forth in this Declaration and in the terms of the
Securities.  To the fullest extent
permitted by applicable law, any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void and will be
deemed to be of no legal effect whatsoever and any such transferee shall be
deemed not to be the holder of such Capital Securities for any purpose,
including but not limited to the receipt of Distributions on such Capital
Securities, and such transferee shall be deemed to have no interest whatsoever
in such Capital Securities.


 


(d)                                 The
Registrar shall provide for the registration of Securities and of transfers of
Securities, which will be effected without charge but only upon payment (with
such indemnity as the Registrar may require) in respect of any tax or other
governmental charges that may be imposed in relation to it.  Upon surrender for registration of transfer
of any Securities, the Registrar shall cause one or more new Securities of the
same tenor to be issued in the name of the designated transferee or
transferees.  Every Security surrendered
for registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Registrar duly executed by the Holder or
such Holder’s attorney duly authorized in writing.  Each Security surrendered for registration of
transfer shall be canceled by the Institutional Trustee pursuant to Section 6.6.  A transferee of a Security shall be entitled
to the rights and subject to the obligations of a Holder hereunder upon the
receipt by such transferee of a Security. 
By acceptance of a Security, each transferee shall be deemed to have
agreed to be bound by this Declaration.


 


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(e)                                  The
Trust shall not be required (i) to issue, register the transfer of, or
exchange any Securities during a period beginning at the opening of business 15 days
before the day of any selection of Securities for redemption and ending at the
close of business on the earliest date on which the relevant notice of
redemption is deemed to have been given to all Holders of the Securities to be
redeemed, or (ii) to register the transfer or exchange of any Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Security being redeemed in part.


 


Section 8.2.                                Transfer
Procedures and Restrictions.


 


(a)                                  The
Capital Securities shall bear the Restricted Securities Legend, which shall not
be removed unless there is delivered to the Trust such satisfactory evidence,
which may include an opinion of counsel satisfactory to the Trustee, as may be
reasonably required by the Trust, that neither the legend nor the restrictions
on transfer set forth therein are required to ensure that transfers thereof
comply with the provisions of the Securities Act.  Upon provision of such satisfactory evidence,
the Institutional Trustee, at the written direction of the Trust, shall
authenticate and deliver Capital Securities that do not bear the legend.


 


(b)                                 Except
as permitted by Section 8.2(a), each Capital Security shall bear a legend
(the “Restricted Securities Legend”) in substantially the following form
and a Capital Security shall not be transferred except in compliance with such
legend, unless otherwise determined by the Sponsor, upon the advice of counsel
expert in securities law, in accordance with applicable law:


 


THIS SECURITY HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW.  NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES
LAWS.  THE HOLDER OF THIS SECURITY BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY
ONLY (A) TO THE SPONSOR OR THE TRUST, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) TO
A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A SO LONG AS THIS
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A IN ACCORDANCE WITH
RULE 144A, (D) TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF REGULATION S
UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR”
WITHIN THE MEANING OF SUBPARAGRAPH (A) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THIS CAPITAL SECURITY FOR ITS OWN ACCOUNT, OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY
OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE SPONSOR’S AND THE TRUST’S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER


 


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TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR
OTHER INFORMATION SATISFACTORY TO EACH OF THEM IN ACCORDANCE WITH THE
DECLARATION OF TRUST, A COPY OF WHICH MAY BE OBTAINED FROM THE SPONSOR OR THE
TRUST.  HEDGING TRANSACTIONS INVOLVING
THIS SECURITY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES
ACT.


 


THE HOLDER OF THIS
SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT
IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR
ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED (“ERISA”), OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE “CODE”) (EACH A “PLAN”), OR AN ENTITY WHOSE
UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN
THE ENTITY, AND NO PERSON INVESTING “PLAN ASSETS” OF ANY PLAN MAY ACQUIRE OR
HOLD THE SECURITIES OR ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS
ELIGIBLE FOR EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR
PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14 OR
ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SECURITY IS
NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE
WITH RESPECT TO SUCH PURCHASE OR HOLDING. 
ANY PURCHASER OR HOLDER OF THE SECURITIES OR ANY INTEREST THEREIN WILL
BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER
(i) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3)
OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A
TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN,
OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR
PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE WILL NOT RESULT IN A
PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF
THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE
EXEMPTION.


 


THIS SECURITY WILL
BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF
NOT LESS THAN $100,000.00 (100 SECURITIES) AND MULTIPLES OF $1,000.00 IN EXCESS
THEREOF.  ANY ATTEMPTED TRANSFER OF
SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000.00
SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER.


 


THE HOLDER OF THIS
SECURITY AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.


 


(c)                                  To
permit registrations of transfers and exchanges, the Trust shall execute and
the Institutional Trustee shall authenticate Capital Securities at the
Registrar’s request.


 


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


 


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(e)                                  All
Capital Securities issued upon any registration of transfer or exchange
pursuant to the terms of this Declaration shall evidence the same security and
shall be entitled to the same benefits under this Declaration as the Capital
Securities surrendered upon such registration of transfer or exchange.


 


Section 8.3.                                Deemed
Security Holders.  The Trust, the
Administrators, the Institutional Trustee, the Paying Agent, the Transfer Agent
or the Registrar may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust, the
Administrators, the Institutional Trustee, the Paying Agent, the Transfer Agent
or the Registrar shall have actual or other notice thereof.


 


ARTICLE IX



LIMITATION OF LIABILITY OF

HOLDERS OF SECURITIES, INSTITUTIONAL TRUSTEE OR OTHERS


 


Section 9.1.                                Liability.


 


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


 


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


 


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


 


(b)                                 The
Holder of the Common Securities shall be liable for all of the debts and obligations
of the Trust (other than with respect to the Securities) to the extent not
satisfied out of the Trust’s assets.


 


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


 


Section 9.2.                                Exculpation.


 


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


 


(b)                                 An
Indemnified Person shall be fully protected in relying in good faith upon the
records of the Trust and upon such information, opinions, reports or statements
presented to the Trust by any Person as to matters the Indemnified Person
reasonably believes are within such other Person’s professional or expert
competence and, if selected by such Indemnified Person, has been selected by
such


 


30





















 


Indemnified Person with reasonable care by or on
behalf of the Trust, including information, opinions, reports or statements as
to the value and amount of the assets, liabilities, profits, losses, or any
other facts pertinent to the existence and amount of assets from which
Distributions to Holders of Securities might properly be paid.


 


Section 9.3.                                Fiduciary
Duty.


 


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


 


(b)                                 Whenever
in this Declaration an Indemnified Person is permitted or required to make a
decision:


 


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


 


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


 


Section 9.4.                                Indemnification.


 


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


 


(b)                                 The
Sponsor shall indemnify, to the full extent permitted by law, any Indemnified
Person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the Trust
to procure a judgment in its favor arising out of or in connection with the
acceptance or administration of this Declaration by reason of the fact that he
is or was an Indemnified Person against expenses (including reasonable
attorneys’ fees and expenses) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Trust; provided, however, that no such
indemnification shall be made in respect of any claim, issue or


 


31





















 


matter as to which such Indemnified Person shall have
been adjudged to be liable to the Trust unless and only to the extent that the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such court shall deem proper.


 


(c)                                  To
the extent that an Indemnified Person shall be successful on the merits or
otherwise (including dismissal of an action without prejudice or the settlement
of an action without admission of liability) in defense of any action, suit or
proceeding referred to in paragraphs (a) and (b) of this Section 9.4,
or in defense of any claim, issue or matter therein, he shall be indemnified,
to the full extent permitted by law, against expenses (including attorneys’
fees and expenses) actually and reasonably incurred by him in connection
therewith.


 


(d)                                 Any
indemnification of an Administrator under paragraphs (a) and (b) of this Section 9.4
(unless ordered by a court) shall be made by the Sponsor only as authorized in
the specific case upon a determination that indemnification of the Indemnified
Person is proper in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (a) and (b).  Such determination shall be made (i) by
the Administrators by a majority vote of a Quorum consisting of such
Administrators who were not parties to such action, suit or proceeding, (ii) if
such a Quorum is not obtainable, or, even if obtainable, if a Quorum of
disinterested Administrators so directs, by independent legal counsel in a
written opinion, or (iii) by the Common Security Holder of the Trust.


 


(e)                                  To
the fullest extent permitted by law, expenses (including reasonable attorneys’
fees and expenses) incurred by an Indemnified Person in defending a civil,
criminal, administrative or investigative action, suit or proceeding referred
to in paragraphs (a) and (b) of this Section 9.4 shall be paid by the
Sponsor in advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such Indemnified Person to
repay such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the Sponsor as authorized in this Section 9.4.  Notwithstanding the foregoing, no advance
shall be made by the Sponsor if a determination is reasonably and promptly made
(i) by the Administrators by a majority vote of a Quorum of disinterested
Administrators, (ii) if such a Quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Administrators so directs, by
independent legal counsel in a written opinion or (iii) by the Common
Security Holder of the Trust, that, based upon the facts known to the
Administrators, counsel or the Common Security Holder at the time such
determination is made, such Indemnified Person acted in bad faith or in a
manner that such Indemnified Person did not believe to be in the best interests
of the Trust, or, with respect to any criminal proceeding, that such
Indemnified Person believed or had reasonable cause to believe his conduct was
unlawful.  In no event shall any advance
be made in instances where the Administrators, independent legal counsel or the
Common Security Holder reasonably determine that such Indemnified Person
deliberately breached his duty to the Trust or its Common or Capital Security
Holders.


 


(f)                                    The
Institutional Trustee, at the sole cost and expense of the Sponsor, retains the
right to representation by counsel of its own choosing in any action, suit or
any other proceeding for which it is indemnified under paragraphs (a) and
(b) of this Section 9.4, without affecting its right to indemnification
hereunder or waiving any rights afforded to it under this Declaration or
applicable law.


 


(g)                                 The
indemnification and advancement of expenses provided by, or granted pursuant
to, the other paragraphs of this Section 9.4 shall not be deemed exclusive
of any other rights to which those seeking indemnification and advancement of
expenses may be entitled under any agreement, vote of stockholders or disinterested
directors of the Sponsor or Capital Security Holders of the Trust or otherwise,
both as to action in his official capacity and as to action in another capacity
while holding such office.  All rights to
indemnification under this Section 9.4 shall be deemed to be provided by a
contract


 


32





















 


between the Sponsor and each Indemnified Person who
serves in such capacity at any time while this Section 9.4 is in
effect.  Any repeal or modification of
this Section 9.4 shall not affect any rights or obligations then existing.


 


(h)                                 The
Sponsor or the Trust may purchase and maintain insurance on behalf of any
Person who is or was an Indemnified Person against any liability asserted
against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the Sponsor would have the power to indemnify
him against such liability under the provisions of this Section 9.4.


 


(i)                                     For
purposes of this Section 9.4, references to “the Trust” shall include, in
addition to the resulting or surviving entity, any constituent entity
(including any constituent of a constituent) absorbed in a consolidation or
merger, so that any Person who is or was a director, trustee, officer or
employee of such constituent entity, or is or was serving at the request of
such constituent entity as a director, trustee, officer, employee or agent of
another entity, shall stand in the same position under the provisions of this Section 9.4
with respect to the resulting or surviving entity as he would have with respect
to such constituent entity if its separate existence had continued.


 


(j)                                     The
indemnification and advancement of expenses provided by, or granted pursuant
to, this Section 9.4 shall, unless otherwise provided when authorized or
ratified, (i) continue as to a Person who has ceased to be an Indemnified
Person and shall inure to the benefit of the heirs, executors and
administrators of such a Person; and (ii) survive the termination or
expiration of this Declaration or the earlier removal or resignation of an
Indemnified Person.


 


Section 9.5.                                Outside
Businesses.  Any Covered Person,
the Sponsor and the Institutional Trustee may engage in or possess an interest
in other business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the Trust and
the Holders of Securities shall have no rights by virtue of this Declaration in
and to such independent ventures or the income or profits derived therefrom,
and the pursuit of any such venture, even if competitive with the business of
the Trust, shall not be deemed wrongful or improper.  None of any Covered Person, the Sponsor or
the Institutional Trustee shall be obligated to present any particular
investment or other opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the Trust, and any
Covered Person, the Sponsor and the Institutional Trustee shall have the right
to take for its own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment or other opportunity.  Any Covered Person and the Institutional
Trustee may engage or be interested in any financial or other transaction with
the Sponsor or any Affiliate of the Sponsor, or may act as depositary for,
trustee or agent for, or act on any committee or body of holders of, securities
or other obligations of the Sponsor or its Affiliates.


 


Section 9.6.                                Compensation;
Fee.  The Sponsor agrees:


 


(a)                                  to
pay to the Institutional Trustee from time to time such compensation for all
services rendered by it hereunder as the parties shall agree from time to time
(which compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust); and


 


(b)                                 except
as otherwise expressly provided herein, to reimburse the Institutional Trustee
upon request for all reasonable expenses, disbursements and advances incurred
or made by the Institutional Trustee in accordance with any provision of this
Declaration (including the reasonable compensation and the expenses and
disbursements of their respective agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence, bad faith or
willful misconduct.


 


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The provisions of this Section 9.6 shall survive
the dissolution of the Trust and the termination of this Declaration and the
removal or resignation of the Institutional Trustee.


 


No Institutional Trustee may claim any lien or charge
on any property of the Trust as a result of any amount due pursuant to this Section 9.6.


 


ARTICLE X



ACCOUNTING


 


Section 10.1.                         Fiscal
Year.  The fiscal year (“Fiscal
Year”) of the Trust shall be the calendar year, or such other year as is
required by the Code.


 


Section 10.2.                         Certain
Accounting Matters.  (a)               At all times during
the existence of the Trust, the Administrators shall keep, or cause to be kept
at the principal office of the Trust in the United States, as defined for
purposes of Treasury Regulations section 301.7701-7, full books of
account, records and supporting documents, which shall reflect in reasonable
detail each transaction of the Trust. 
The books of account shall be maintained, at the Sponsor’s expense, in
accordance with generally accepted accounting principles, consistently
applied.  The books of account and the
records of the Trust shall be examined by and reported upon (either separately
or as part of the Sponsor’s regularly prepared consolidated financial report)
as of the end of each Fiscal Year of the Trust by a firm of independent
certified public accountants selected by the Administrators.


 


(b)                                 The
Administrators shall cause to be duly prepared and delivered to each of the
Holders of Securities Form 1099 or such other annual United States federal
income tax information statement required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. 
Notwithstanding any right under the Code to deliver any such statement
at a later date, the Administrators shall endeavor to deliver all such
statements within 30 days after the end of each Fiscal Year of the Trust.


 


(c)                                  The
Administrators, at the Sponsor’s expense, shall cause to be duly prepared at
the principal office of the Sponsor in the United States, as ‘United States’ is
defined in Section 7701(a)(9) of the Code (or at the principal office of
the Trust if the Sponsor has no such principal office in the United States),
and filed an annual United States federal income tax return on a Form 1041 or
such other form required by United States federal income tax law, and any other
annual income tax returns required to be filed by the Administrators on behalf
of the Trust with any state or local taxing authority.


 


Section 10.3.                         Banking.  The Trust shall maintain in the United
States, as defined for purposes of Treasury Regulations section 301.7701-7,
one or more bank accounts in the name and for the sole benefit of the Trust; provided,
however, that all payments of funds in respect of the Debentures held by
the Institutional Trustee shall be made directly to the Property Account and no
other funds of the Trust shall be deposited in the Property Account.  The sole signatories for such accounts
(including the Property Account) shall be designated by the Institutional
Trustee.


 


Section 10.4.                         Withholding.  The Institutional Trustee or any Paying
Agent and the Administrators shall comply with all withholding requirements
under United States federal, state and local law.  The Institutional Trustee or any Paying Agent
shall request, and each Holder shall provide to the Institutional Trustee or
any Paying Agent, such forms or certificates as are necessary to establish an
exemption from withholding with respect to the Holder, and any representations
and forms as shall reasonably be requested by the Institutional Trustee or any
Paying Agent to assist it in determining the


 


34





















 


extent of, and in fulfilling, its withholding
obligations.  The Administrators shall
file required forms with applicable jurisdictions and, unless an exemption from
withholding is properly established by a Holder, shall remit amounts withheld
with respect to the Holder to applicable jurisdictions.  To the extent that the Institutional Trustee
or any Paying Agent is required to withhold and pay over any amounts to any
authority with respect to distributions or allocations to any Holder, the
amount withheld shall be deemed to be a Distribution in the amount of the
withholding to the Holder.  In the event
of any claimed overwithholding, Holders shall be limited to an action against
the applicable jurisdiction.  If the
amount required to be withheld was not withheld from actual Distributions made,
the Institutional Trustee or any Paying Agent may reduce subsequent
Distributions by the amount of such withholding.


 


ARTICLE XI



AMENDMENTS AND MEETINGS


 


Section 11.1.                         Amendments.


 


(a)                                  Except
as otherwise provided in this Declaration or by any applicable terms of the
Securities, this Declaration may only be amended by a written instrument
approved and executed by the Institutional Trustee.


 


(b)                                 Notwithstanding
any other provision of this Article XI, an amendment may be made, and any
such purported amendment shall be valid and effective only if:


 


(i)                                     the
Institutional Trustee shall have first received


 


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


 


(B)  an
opinion of counsel (who may be counsel to the Sponsor or the Trust) that such
amendment is permitted by, and conforms to, the terms of this Declaration
(including the terms of the Securities); and


 


(ii)                                  the
result of such amendment would not be to


 


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


 


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


 


(c)                                  Except
as provided in Section 11.1(d), (e) or (h), no amendment shall be made,
and any such purported amendment shall be void and ineffective, unless the
Holders of a Majority in liquidation amount of the Capital Securities shall
have consented to such amendment.


 


(d)                                 In
addition to and notwithstanding any other provision in this Declaration,
without the consent of each affected Holder, this Declaration may not be
amended to (i) change the amount or timing of any Distribution on the
Securities or otherwise adversely affect the amount of any Distribution
required to be made in respect of the Securities as of a specified date or
change any conversion or exchange provisions or (ii) restrict the right of
a Holder to institute suit for the enforcement of any such payment on or after
such date.


 


35





















 


(e)                                  Sections 9.1(b)
and 9.1(c) and this Section 11.1 shall not be amended without the consent
of all of the Holders of the Securities.


 


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


 


(g)                                 The
rights of the Holders of the Capital Securities under Article IV to
appoint and remove the Institutional Trustee shall not be amended without the
consent of the Holders of a Majority in liquidation amount of the Capital
Securities.


 


(h)                                 This
Declaration may be amended by the Institutional Trustee and the Holders of a
Majority in liquidation amount of the Common Securities without the consent of
the Holders of the Capital Securities to:


 


(i)                                     cure
any ambiguity;


 


(ii)                                  correct
or supplement any provision in this Declaration that may be defective or
inconsistent with any other provision of this Declaration;


 


(iii)                               add
to the covenants, restrictions or obligations of the Sponsor; or


 


(iv)                              modify,
eliminate or add to any provision of this Declaration to such extent as may be
necessary to ensure that the Trust will be classified for United States federal
income tax purposes at all times as a grantor trust and will not be required to
register as an Investment Company (including without limitation to conform to
any change in Rule 3a-5, Rule 3a-7 or any other applicable rule under
the Investment Company Act or written change in interpretation or application
thereof by any legislative body, court, government agency or regulatory
authority) which amendment does not have a material adverse effect on the
rights, preferences or privileges of the Holders of Securities;


 


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


 


Section 11.2.                         Meetings
of the Holders of Securities; Action by Written Consent.


 


(a)                                  Meetings
of the Holders of any class of Securities may be called at any time by the
Administrators (or as provided in the terms of the Securities) to consider and
act on any matter on which Holders of such class of Securities are entitled to
act under the terms of this Declaration or the terms of the Securities.  The Administrators shall call a meeting of
the Holders of such class if directed to do so by the Holders of at least 10%
in liquidation amount of such class of Securities.  Such direction shall be given by delivering
to the Administrators one or more calls in a writing stating that the signing
Holders of the Securities wish to call a meeting and indicating the general or
specific purpose for which the meeting is to be called.  Any Holders of the Securities calling a
meeting shall specify in writing the Certificates held by the Holders of the
Securities exercising the right to call a meeting and only those Securities
represented by such Certificates shall be counted for purposes of determining
whether the required percentage set forth in the second sentence of this
paragraph has been met.


 


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


 


36





















 


(i)                                     notice
of any such meeting shall be given to all the Holders of the Securities having
a right to vote thereat at least 7 days and not more than 60 days
before the date of such meeting. 
Whenever a vote, consent or approval of the Holders of the Securities is
permitted or required under this Declaration, such vote, consent or approval
may be given at a meeting of the Holders of the Securities.  Any action that may be taken at a meeting of
the Holders of the Securities may be taken without a meeting if a consent in
writing setting forth the action so taken is signed by the Holders of the
Securities owning not less than the minimum amount of Securities in liquidation
amount that would be necessary to authorize or take such action at a meeting at
which all Holders of the Securities having a right to vote thereon were present
and voting.  Prompt notice of the taking
of action without a meeting shall be given to the Holders of the Securities
entitled to vote who have not consented in writing.  The Administrators may specify that any
written ballot submitted to the Holders of the Securities for the purpose of
taking any action without a meeting shall be returned to the Trust within the
time specified by the Administrators;


 


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


 


(iii)                               unless
the Statutory Trust Act, this Declaration, or the terms of the Securities
otherwise provides, the Administrators, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of Securities,
including notice of the time, place or purpose of any meeting at which any
matter is to be voted on by any Holders of the Securities, waiver of any such
notice, action by consent without a meeting, the establishment of a record
date, quorum requirements, voting in person or by proxy or any other matter
with respect to the exercise of any such right to vote; provided, however,
that each meeting shall be conducted in the United States (as that term is
defined in Treasury Regulations section 301.7701-7).


 


ARTICLE XII



REPRESENTATIONS OF INSTITUTIONAL TRUSTEE


 


Section 12.1.                         Representations
and Warranties of Institutional Trustee. 
The initial Institutional Trustee represents and warrants to the
Trust and to the Sponsor at the date of this Declaration, and each Successor
Institutional Trustee represents and warrants to the Trust and the Sponsor at
the time of the Successor Institutional Trustee’s acceptance of its appointment
as Institutional Trustee, that:


 


(a)                                  the
Institutional Trustee is a national banking association with trust powers, duly
organized and validly existing under the laws of the United States of America
with trust power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, this Declaration;


 


37





















 


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


 


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


 


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


 


ARTICLE XIII



MISCELLANEOUS


 


Section 13.1.                         Notices.  All notices provided for in this
Declaration shall be in writing, duly signed by the party giving such notice,
and shall be delivered, telecopied (which telecopy shall be followed by notice
delivered or mailed by first class mail) or mailed by first class mail, as
follows:


 


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


 


First Regional Statutory Trust III


c/o First Regional Bancorp


1801 Century Park East, Suite 800


Los Angeles, California 90067-2302


Attention:  Thomas McCullough


Telecopy:  310-552-1772


 


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


 


U.S. Bank National Association


225 Asylum Street, Goodwin Square


Hartford, Connecticut  06103


Attention:  Vice President,
Corporate Trust Services Division


Telecopy:  860-241-6889


 


With a copy to:


 


U.S. Bank National
Association


1 Federal Street -
3rd Floor


Boston,
Massachusetts  02110


Attention:  Paul D. Allen, Corporate Trust Services
Division


Telecopy:  617-603-6665


 


38





















 


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


 


First Regional Bancorp


1801 Century Park East, Suite 800


Los Angeles, California 90067-2302


Attention:  Thomas McCullough


Telecopy:  310-552-1772


 


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


 


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


 


Section 13.2.                         Governing
Law.  This Declaration and the
rights of the parties hereunder shall be governed by and interpreted in
accordance with the law of the State of Connecticut and all rights and remedies
shall be governed by such laws without regard to the principles of conflict of
laws of the State of Connecticut or any other jurisdiction that would call for
the application of the law of any jurisdiction other than the State of Connecticut;
provided, however, that there shall not be applicable to the
Trust, the Institutional Trustee or this Declaration any provision of the laws
(statutory or common) of the State of Connecticut pertaining to trusts that
relate to or regulate, in a manner inconsistent with the terms hereof (a) the
filing with any court or governmental body or agency of trustee accounts or
schedules of trustee fees and charges, (b) affirmative requirements to
post bonds for trustees, officers, agents or employees of a trust, (c) the
necessity for obtaining court or other governmental approval concerning the
acquisition, holding or disposition of real or personal property, (d) fees
or other sums payable to trustees, officers, agents or employees of a trust,
(e) the allocation of receipts and expenditures to income or principal, or
(f) restrictions or limitations on the permissible nature, amount or
concentration of trust investments or requirements relating to the titling,
storage or other manner of holding or investing trust assets.


 


Section 13.3.                         Intention
of the Parties.  It is the
intention of the parties hereto that the Trust be classified for United States
federal income tax purposes as a grantor trust. The provisions of this
Declaration shall be interpreted to further this intention of the parties.


 


Section 13.4.                         Headings.  Headings contained in this Declaration
are inserted for convenience of reference only and do not affect the
interpretation of this Declaration or any provision hereof.


 


Section 13.5.                         Successors
and Assigns.  Whenever in this
Declaration any of the parties hereto is named or referred to, the successors
and assigns of such party shall be deemed to be included, and all covenants and
agreements in this Declaration by the Sponsor and the Institutional Trustee
shall bind and inure to the benefit of their respective successors and assigns,
whether or not so expressed.


 


Section 13.6.                         Partial
Enforceability.  If any provision
of this Declaration, or the application of such provision to any Person or
circumstance, shall be held invalid, the remainder of this Declaration, or the
application of such provision to persons or circumstances other than those to
which it is held invalid, shall not be affected thereby.


 


39





















 


Section 13.7.                         Counterparts.  This Declaration may contain more than
one counterpart of the signature page and this Declaration may be executed by
the affixing of the signature of each of the Institutional Trustee and
Administrators to any of such counterpart signature pages.  All of such counterpart signature pages shall
be read as though one, and they shall have the same force and effect as though
all of the signers had signed a single signature page.


 


Signatures
appear on the following page


 


40





















 


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


 


	
   

  	
  U.S. BANK NATIONAL ASSOCIATION,

  
	
   

  	
  as Institutional Trustee

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Paul D. Allen

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Paul D. Allen

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  FIRST REGIONAL BANCORP, as Sponsor

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Thomas McCullough

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Thomas McCullough

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Corporate Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  FIRST REGIONAL STATUTORY TRUST III

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jack A. Sweeney

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Administrator

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ H. Anthony Gartshore

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Administrator

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas McCullough

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Administrator

  	
   

  
										



 


41





















 


ANNEX I


 


TERMS OF SECURITIES


 


Pursuant to Section 6.1
of the Amended and Restated Declaration of Trust, dated as of March 17,
2004 (as amended from time to time, the “Declaration”), the designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Capital Securities and the Common Securities are set out below (each
capitalized term used but not defined herein has the meaning set forth in the
Declaration):


 


1.                                       Designation
and Number.


 


(a)                                  7,500
Floating Rate Capital Securities of First Regional Statutory Trust III
(the “Trust”), with an aggregate stated liquidation amount with respect to the
assets of the Trust of seven million five hundred thousand dollars
($7,500,000.00) and a stated liquidation amount with respect to the assets of
the Trust of $1,000.00 per Capital Security, are hereby designated for the
purposes of identification only as the “Capital Securities”.  The Capital Security Certificates evidencing
the Capital Securities shall be substantially in the form of Exhibit A-1
to the Declaration, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice.


 


(b)                                 232
Floating Rate Common Securities of the Trust (the “Common Securities”)
will be evidenced by Common Security Certificates substantially in the form of
Exhibit A-2 to the Declaration, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice.


 


2.                                       Distributions.


 


(a)                                  Distributions
will be payable on each Security for the Distribution Period beginning on (and
including) the date of original issuance and ending on (but excluding) the
Distribution Payment Date in June 2004 at a rate per annum of 3.90% and
shall bear interest for each successive Distribution Period beginning on (and
including) the Distribution Payment Date in June 2004, and each succeeding
Distribution Payment Date, and ending on (but excluding) the next succeeding
Distribution Payment Date at a rate per annum equal to the 3-Month LIBOR, determined
as described below, plus 2.79% (the “Coupon Rate”), applied to the
stated liquidation amount thereof, such rate being the rate of interest payable
on the Debentures to be held by the Institutional Trustee.  Distributions in arrears will bear interest
thereon compounded quarterly at the applicable Distribution Rate (to the extent
permitted by law).  Distributions, as
used herein, include cash distributions and any such compounded distributions
unless otherwise noted.  A Distribution
is payable only to the extent that payments are made in respect of the
Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee has funds available therefor.  The amount of the Distribution payable for
any Distribution Period will be calculated by applying the Distribution Rate to
the stated liquidation amount outstanding at the commencement of the
Distribution Period on the basis of the actual number of days in the
Distribution Period concerned divided by 360. 
All percentages resulting from any calculations on the Capital
Securities will be rounded, if necessary, to the nearest one hundred-thousandth
of a percentage point, with five one-millionths of a percentage point rounded
upward (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655),
and all dollar amounts used in or resulting from such calculation will be
rounded to the nearest cent (with one-half cent being rounded upward)).


 


(b)                                 Distributions
on the Securities will be cumulative, will accrue from the date of original
issuance, and will be payable, subject to extension of distribution payment
periods as described herein, quarterly in arrears on March 17, June 17,
September 17 and December 17 of each year, or if such day is not a
Business Day, then the next succeeding Business Day (each a “Distribution
Payment Date”),


 


I-1





















 


commencing on the Distribution Payment Date in June 2004
when, as and if available for payment. 
The Debenture Issuer has the right under the Indenture to defer payments
of interest on the Debentures, so long as no Indenture Event of Default has
occurred and is continuing, by deferring the payment of interest on the
Debentures for up to 20 consecutive quarterly periods (each an “Extension
Period”) at any time and from time to time, subject to the conditions
described below, during which Extension Period no interest shall be due and
payable.  During any Extension Period,
interest will continue to accrue on the Debentures, and interest on such
accrued interest will accrue at an annual rate equal to the Distribution Rate
in effect for each such Extension Period, compounded quarterly from the date
such interest would have been payable were it not for the Extension Period, to
the extent permitted by law (such interest referred to herein as “Additional
Interest”).  No Extension Period may
end on a date other than a Distribution Payment Date.  At the end of any such Extension Period, the
Debenture Issuer shall pay all interest then accrued and unpaid on the Debentures
(together with Additional Interest thereon); provided, however,
that no Extension Period may extend beyond the Maturity Date and provided
further, however, that during any such Extension Period, the
Debenture Issuer and its Affiliates shall not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Debenture Issuer’s or its
Affiliates’ capital stock (other than payments of dividends or distributions to
the Debenture Issuer) or make any guarantee payments with respect to the
foregoing, or (ii) make any payment of principal of or interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Debenture Issuer or any Affiliate that rank pari passu
in all respects with or junior in interest to the Debentures (other than, with
respect to clauses (i) and (ii) above, (a) repurchases, redemptions
or other acquisitions of shares of capital stock of the Debenture Issuer in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of one or more employees, officers,
directors or consultants, in connection with a dividend reinvestment or
stockholder stock purchase plan or in connection with the issuance of capital
stock of the Debenture Issuer (or securities convertible into or exercisable
for such capital stock) as consideration in an acquisition transaction entered
into prior to the applicable Extension Period, (b) as a result of any
exchange or conversion of any class or series of the Debenture Issuer’s capital
stock (or any capital stock of a subsidiary of the Debenture Issuer) for any
class or series of the Debenture Issuer’s capital stock or of any class or
series of the Debenture Issuer’s indebtedness for any class or series of the
Debenture Issuer’s capital stock, (c) the purchase of fractional interests
in shares of the Debenture Issuer’s capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, (d) any declaration of a dividend in connection with any
stockholders’ rights plan, or the issuance of rights, stock or other property
under any stockholders’ rights plan, or the redemption or repurchase of rights
pursuant thereto, (e) any dividend in the form of stock, warrants, options
or other rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with
or junior to such stock and any cash payments in lieu of fractional shares
issued in connection therewith, or (f)  payments under the Capital
Securities Guarantee).  Prior to the
termination of any Extension Period, the Debenture Issuer may further extend
such period, provided that such period together with all such previous and
further consecutive extensions thereof shall not exceed 20 consecutive
quarterly periods, or extend beyond the Maturity Date.  Upon the termination of any Extension Period
and upon the payment of all accrued and unpaid interest and Additional
Interest, the Debenture Issuer may commence a new Extension Period, subject to
the foregoing requirements.  No interest
or Additional Interest shall be due and payable during an Extension Period,
except at the end thereof, but each installment of interest that would
otherwise have been due and payable during such Extension Period shall bear
Additional Interest.  During any
Extension Period, Distributions on the Securities shall be deferred for a
period equal to the Extension Period.  If
Distributions are deferred, the Distributions due shall be paid on the date
that the related Extension Period terminates to Holders of the Securities as
they appear on the books and records of the Trust on the record date
immediately preceding such date. 
Distributions on the Securities must be paid on the dates payable (after
giving effect to any Extension Period) to the extent that the Trust has funds
available for the payment of such distributions in the Property Account of the
Trust.  The Trust’s 


 


I-2





















 


funds available for Distribution to the Holders of the
Securities will be limited to payments received from the Debenture Issuer.  The payment of Distributions out of moneys
held by the Trust is guaranteed by the Guarantor pursuant to the Guarantee.


 


(c)                                  Distributions
on the Securities will be payable to the Holders thereof as they appear on the
books and records of the Trust on the relevant record dates.  The relevant record dates shall be 15 days
before the relevant Distribution Payment Date. 
Distributions payable on any Securities that are not punctually paid on
any Distribution Payment Date, as a result of the Debenture Issuer having
failed to make a payment under the Debentures, as the case may be, when due
(taking into account any Extension Period), will cease to be payable to the
Person in whose name such Securities are registered on the relevant record
date, and such defaulted Distribution will instead be payable to the Person in
whose name such Securities are registered on the special record date or other
specified date determined in accordance with the Indenture.


 


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


 


3.                                       Liquidation
Distribution Upon Dissolution.  In
the event of the voluntary or involuntary liquidation, dissolution, winding-up
or termination of the Trust (each a “Liquidation”) other than in
connection with a redemption of the Debentures, the Holders of the Securities
will be entitled to receive out of the assets of the Trust available for
distribution to Holders of the Securities, after satisfaction of liabilities to
creditors of the Trust (to the extent not satisfied by the Debenture Issuer),
distributions equal to the aggregate of the stated liquidation amount of
$1,000.00 per Security plus accrued and unpaid Distributions thereon to the
date of payment (such amount being the “Liquidation Distribution”),
unless in connection with such Liquidation, the Debentures in an aggregate
stated principal amount equal to the aggregate stated liquidation amount of
such Securities, with an interest rate equal to the Distribution Rate of, and
bearing accrued and unpaid interest in an amount equal to the accrued and
unpaid Distributions on, and having the same record date as, such Securities,
after paying or making reasonable provision to pay all claims and obligations
of the Trust in accordance with the Statutory Trust Act, shall be distributed
on a Pro Rata basis to the Holders of the Securities in exchange for such
Securities.


 


The Sponsor, as the Holder of all of the Common
Securities, has the right at any time to dissolve the Trust (including, without
limitation, upon the occurrence of a Special Event), subject to the receipt by
the Debenture Issuer of prior approval from the Board of Governors of the
Federal Reserve System, or its designated district bank, as applicable, and any
successor federal agency that is primarily responsible for regulating the
activities of the Sponsor (the “Federal Reserve”), if the Sponsor is a
bank holding company, or from the Office of Thrift Supervision and any
successor federal agency that is primarily responsible for regulating the
activities of Sponsor, (the “OTS”) if the Sponsor is a savings and loan
holding company, in either case if then required under applicable capital
guidelines or policies of the Federal Reserve or OTS, as applicable, and, after
satisfaction of liabilities to creditors of the Trust, cause the Debentures to
be distributed to the Holders of the Securities on a Pro Rata basis in
accordance with the aggregate stated liquidation amount thereof.


 


If a Liquidation of the Trust occurs as described in
clause (i), (ii), (iii) or (v) in Section 7.1(a) of the Declaration,
the Trust shall be liquidated by the Institutional Trustee as expeditiously as
it determines to be possible by distributing, after satisfaction of liabilities
to creditors of the Trust, to the Holders of the Securities, the Debentures on
a Pro Rata basis to the extent not satisfied by the Debenture Issuer, unless
such distribution is determined by the Institutional Trustee not to be
practical, in which event such Holders will be entitled to receive out of the
assets of the Trust available for distribution to the Holders, after
satisfaction of liabilities of creditors of the Trust to the extent not
satisfied by the Debenture Issuer,


 


I-3





















 


an amount equal to the Liquidation Distribution.  An early Liquidation of the Trust pursuant to
clause (iv) of Section 7.1(a) of the Declaration shall occur if the
Institutional Trustee determines that such Liquidation is possible by
distributing, after satisfaction of liabilities to creditors of the Trust, to
the Holders of the Securities on a Pro Rata basis, the Debentures, and such
distribution occurs.


 


If, upon any such Liquidation the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on such Capital Securities shall be paid to the Holders
of the Trust Securities on a Pro Rata basis, except that if an Event of Default
has occurred and is continuing, the Capital Securities shall have a preference
over the Common Securities with regard to such distributions.


 


After the date for any distribution of the Debentures
upon dissolution of the Trust (i) the Securities of the Trust will be
deemed to be no longer outstanding, (ii) upon surrender of a Holder’s
Securities certificate, such Holder of the Securities will receive a
certificate representing the Debentures to be delivered upon such distribution,
(iii) any certificates representing the Securities still outstanding will
be deemed to represent undivided beneficial interests in such of the Debentures
as have an aggregate principal amount equal to the aggregate stated liquidation
amount with an interest rate identical to the Distribution Rate of, and bearing
accrued and unpaid interest equal to accrued and unpaid distributions on, the
Securities until such certificates are presented to the Debenture Issuer or its
agent for transfer or reissuance (and until such certificates are so
surrendered, no payments of interest or principal shall be made to Holders of
Securities in respect of any payments due and payable under the Debentures; provided,
however that such failure to pay shall not be deemed to be an Event of
Default and shall not entitle the Holder to the benefits of the Guarantee), and
(iv) all rights of Holders of Securities under the Declaration shall
cease, except the right of such Holders to receive Debentures upon surrender of
certificates representing such Securities.


 


4.                                       Redemption
and Distribution.


 


(a)                                  The
Debentures will mature on March 17, 2034. The Debentures may be redeemed
by the Debenture Issuer, in whole or in part, at any Distribution Payment Date
on or after the Distribution Payment Date in March 2009, at the Redemption
Price. In addition, the Debentures may be redeemed by the Debenture Issuer at
the Special Redemption Price, in whole but not in part, at any Distribution
Payment Date, upon the occurrence and continuation of a Special Event within
120 days following the occurrence of such Special Event at the Special
Redemption Price, upon not less than 30 nor more than 60 days’ notice
to holders of such Debentures so long as such Special Event is continuing. In
each case, the right of the Debenture Issuer to redeem the Debentures is
subject to the Debenture Issuer having received prior approval from the Federal
Reserve (if the Debenture Issuer is a bank holding company) or prior approval
from the OTS (if the Debenture Issuer is a savings and loan holding company),
in each case if then required under applicable capital guidelines or policies
of the applicable federal agency.


 


“3-Month LIBOR” means the London interbank
offered interest rate for three-month, U.S. dollar deposits determined by the
Debenture Trustee in the following order of priority:


 


(1)                                  the
rate (expressed as a percentage per annum) for U.S. dollar deposits having a
three-month maturity that appears on Telerate Page 3750 as of 11:00 a.m.
(London time) on the related Determination Date (as defined below).  “Telerate Page 3750” means the display
designated as “Page 3750” on the Dow Jones Telerate Service or such other
page as may replace Page 3750 on that service or such other service or
services as may be nominated by the British Bankers’ Association as the
information vendor for the purpose of displaying London interbank offered rates
for U.S. dollar deposits;


 


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(2)                                  if
such rate cannot be identified on the related Determination Date, the Debenture
Trustee will request the principal London offices of four leading banks in the
London interbank market to provide such banks’ offered quotations (expressed as
percentages per annum) to prime banks in the London interbank market for U.S.
dollar deposits having a three-month maturity as of 11:00 a.m. (London
time) on such Determination Date.  If at
least two quotations are provided, 3-Month LIBOR will be the arithmetic mean of
such quotations;


 


(3)                                  if
fewer than two such quotations are provided as requested in clause (2)
above, the Debenture Trustee will request four major New York City banks to
provide such banks’ offered quotations (expressed as percentages per annum) to leading
European banks for loans in U.S. dollars as of 11:00 a.m. (London time) on
such Determination Date.  If at least two
such quotations are provided, 3-Month LIBOR will be the arithmetic mean of such
quotations; and


 


(4)                                  if
fewer than two such quotations are provided as requested in clause (3)
above, 3-Month LIBOR will be a 3-Month LIBOR determined with respect to the
Distribution Period immediately preceding such current Distribution Period.


 


If the rate for U.S. dollar deposits having a
three-month maturity that initially appears on Telerate Page 3750 as of
11:00 a.m. (London time) on the related Determination Date is superseded
on the Telerate Page 3750 by a corrected rate by 12:00 noon (London
time) on such Determination Date, then the corrected rate as so substituted on
the applicable page will be the applicable 3-Month LIBOR for such Determination
Date.


 


The Distribution Rate for any Distribution Period will
at no time be higher than the maximum rate then permitted by New York law as
the same may be modified by United States law.


 


“Capital Treatment Event” means the receipt by
the Debenture Issuer and the Trust of an opinion of counsel experienced in such
matters to the effect that, as a result of the occurrence of any amendment to,
or change (including any announced prospective change) in, the laws, rules or
regulations of the United States or any political subdivision thereof or
therein, or as the result of any official or administrative pronouncement or
action or decision interpreting or applying such laws, rules or regulations,
which amendment or change is effective or which pronouncement, action or
decision is announced on or after the date of original issuance of the
Debentures, there is more than an insubstantial risk that the Sponsor will not,
within 90 days of the date of such opinion, be entitled to treat an amount
equal to the aggregate liquidation amount of the Capital Securities as “Tier 1
Capital” (or its then equivalent) for purposes of the capital adequacy
guidelines of the Federal Reserve, as then in effect and applicable to the
Sponsor (or if the Sponsor is not a bank holding company, such guidelines
applied to the Sponsor as if the Sponsor were subject to such guidelines); provided,
however, that the inability of the Sponsor to treat all or any portion
of the liquidation amount of the Capital Securities as Tier l Capital
shall not constitute the basis for a Capital Treatment Event, if such inability
results from the Sponsor having cumulative preferred stock, minority interests
in consolidated subsidiaries, or any other class of security or interest which
the Federal Reserve or OTS, as applicable, may now or hereafter accord Tier 1
Capital treatment in excess of the amount which may now or hereafter qualify
for treatment as Tier 1 Capital under applicable capital adequacy
guidelines; provided  further, however, that the
distribution of Debentures in connection with the Liquidation of the Trust
shall not in and of itself constitute a Capital Treatment Event unless such
Liquidation shall have occurred in connection with a Tax Event or an Investment
Company Event.


 


“Determination Date” means the date that is two
London Banking Days (i.e., a business day in which dealings in deposits in U.S.
dollars are transacted in the London interbank market) preceding the particular
Distribution Period for which a Coupon Rate is being determined.


 


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“Investment Company Event” means the receipt by
the Debenture Issuer and the Trust of an opinion of counsel experienced in such
matters to the effect that, as a result of the occurrence of a change in law or
regulation or written change (including any announced prospective change) in
interpretation or application of law or regulation by any legislative body, court,
governmental agency or regulatory authority, there is more than an
insubstantial risk that the Trust is or, within 90 days of the date of such
opinion, will be considered an Investment Company that is required to be
registered under the Investment Company Act which change or prospective change
becomes effective or would become effective, as the case may be, on or after
the date of the issuance of the Debentures.


 


“Maturity Date” means March 17, 2034.


 


“Redemption Date” shall mean the date fixed for
the redemption of Capital Securities, which shall be any Distribution Payment
Date on or after the Distribution Payment Date in March 2009.


 


“Redemption Price”
means 100% of the principal amount of the Debentures being redeemed, plus
accrued and unpaid Interest on such Debentures to the Redemption Date.


 


“Special Event” means a Tax Event, an
Investment Company Event or a Capital Treatment Event.


 


“Special Redemption Date” means a date on which
a Special Event redemption occurs, which shall be a Distribution Payment Date.


 


“Special Redemption Price” means the price set
forth in the following table for any Special Redemption Date that occurs on the
date indicated below (or if such day is not a Business Day, then the next
succeeding Business Day), expressed as the percentage of the principal amount
of the Debentures being redeemed:


 


	
  Month in which Special

  Redemption Date Occurs

  	
   

  	
  Special Redemption Price

  
	
   

  	
   

  	
   

  
	
  June 2004

  	
   

  	
  104.625%

  
	
   

  	
   

  	
   

  
	
  September 2004

  	
   

  	
  104.300%

  
	
   

  	
   

  	
   

  
	
  December 2004

  	
   

  	
  104.000%

  
	
   

  	
   

  	
   

  
	
  March 2005

  	
   

  	
  103.650%

  
	
   

  	
   

  	
   

  
	
  June 2005

  	
   

  	
  103.350%

  
	
   

  	
   

  	
   

  
	
  September 2005

  	
   

  	
  103.000%

  
	
   

  	
   

  	
   

  
	
  December 2005

  	
   

  	
  102.700%

  
	
   

  	
   

  	
   

  
	
  March 2006

  	
   

  	
  102.350%

  
	
   

  	
   

  	
   

  
	
  June 2006

  	
   

  	
  102.050%

  
	
   

  	
   

  	
   

  
	
  September 2006

  	
   

  	
  101.700%

  
	
   

  	
   

  	
   

  
	
  December 2006

  	
   

  	
  101.400%

  



 


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  March 2007

  	
   

  	
  101.050%

  
	
   

  	
   

  	
   

  
	
  June 2007

  	
   

  	
  100.750%

  
	
   

  	
   

  	
   

  
	
  September 2007

  	
   

  	
  100.450%

  
	
   

  	
   

  	
   

  
	
  December 2007

  	
   

  	
  100.200%

  
	
   

  	
   

  	
   

  
	
  March 2008
  and thereafter

  	
   

  	
  100.000%

  



 


plus, in each case, accrued and unpaid Interest on
such Debentures to the Special Redemption Date.


 


“Tax Event” means the receipt by the Debenture
Issuer and the Trust of an opinion of counsel experienced in such matters to
the effect that, as a result of any amendment to or change (including any
announced prospective change) in the laws or any regulations thereunder of the
United States or any political subdivision or taxing authority thereof or
therein, or as a result of any official administrative pronouncement (including
any private letter ruling, technical advice memorandum, field service advice,
regulatory procedure, notice or announcement including any notice or
announcement of intent to adopt such procedures or regulations) (an “Administrative
Action”) or judicial decision interpreting or applying such laws or
regulations, regardless of whether such Administrative Action or judicial
decision is issued to or in connection with a proceeding involving the
Debenture Issuer or the Trust and whether or not subject to review or appeal,
which amendment, clarification, change, Administrative Action or decision is
enacted, promulgated or announced, in each case on or after the date of
original issuance of the Debentures, there is more than an insubstantial risk
that: (i) the Trust is, or will be within 90 days of the date of such
opinion, subject to United States federal income tax with respect to income
received or accrued on the Debentures; (ii) interest payable by the
Debenture Issuer on the Debentures is not, or within 90 days of the date of
such opinion, will not be, deductible by the Debenture Issuer, in whole or in
part, for United States federal income tax purposes; or (iii) the Trust
is, or will be within 90 days of the date of such opinion, subject to more than
a de minimis amount of other taxes, duties or other governmental charges.


 


(b)                                 Upon
the repayment in full at maturity or redemption in whole or in part of the
Debentures (other than following the distribution of the Debentures to the
Holders of the Securities), the proceeds from such repayment or payment shall
concurrently be applied to redeem Pro Rata at the applicable Redemption Price
or Special Redemption Price, as applicable, Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Debentures so
repaid or redeemed; provided, however, that holders of such
Securities shall be given not less than 30 nor more than 60 days’ notice of
such redemption (other than at the scheduled maturity of the Debentures).


 


(c)                                  If
fewer than all the outstanding Securities are to be so redeemed, the Common
Securities and the Capital Securities will be redeemed Pro Rata and the Capital
Securities to be redeemed will be redeemed Pro Rata from each Holder of Capital
Securities.


 


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


 


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(e)                                  Redemption
or Distribution Procedures.


 


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


 


(ii)                                  If
the Securities are to be redeemed and the Trust gives a Redemption/
Distribution Notice, which notice may only be issued if the Debentures are
redeemed as set out in this paragraph 4 (which notice will be
irrevocable), then, provided that the Institutional Trustee has a
sufficient amount of cash in connection with the related redemption or maturity
of the Debentures, the Institutional Trustee will pay the relevant Redemption
Price or Special Redemption Price, as applicable, to the Holders of such
Securities by check mailed to the address of each such Holder appearing on the
books and records of the Trust on the Redemption Date.  If a Redemption/Distribution Notice shall
have been given and funds deposited as required then immediately prior to the
close of business on the date of such deposit Distributions will cease to
accrue on the Securities so called for redemption and all rights of Holders of
such Securities so called for redemption will cease, except the right of the
Holders of such Securities to receive the applicable Redemption Price or
Special Redemption Price specified in paragraph 4(a), but without interest
on such Redemption Price or Special Redemption Price.  If payment of the Redemption Price or Special
Redemption Price in respect of any Securities is improperly withheld or refused
and not paid either by the Trust or by the Debenture Issuer as guarantor
pursuant to the Guarantee, Distributions on such Securities will continue to
accrue at the Distribution Rate from the original Redemption Date to the actual
date of payment, in which case the actual payment date will be considered the
date fixed for redemption for purposes of calculating the Redemption Price or
Special Redemption Price.  In the event
of any redemption of the Capital Securities issued by the Trust in part, the
Trust shall not be required to (i) issue, register the transfer of or
exchange any Security during a period beginning at the opening of business 15
days before any selection for redemption of the Capital Securities and ending
at the close of business on the earliest date on which the relevant notice of
redemption is deemed to have been given to all Holders of the Capital
Securities to be so redeemed or (ii) register the transfer of or exchange
any Capital Securities so selected for redemption, in whole or in part, except
for the unredeemed portion of any Capital Securities being redeemed in part.


 


(iii)                               Redemption/Distribution
Notices shall be sent by the Administrators on behalf of the Trust to (A) in
respect of the Capital Securities, the Holders thereof and (B) in respect
of the Common Securities, the Holder thereof.


 


(iv)                              Subject
to the foregoing and applicable law (including, without limitation, United
States federal securities laws), and provided that the acquiror is not the
Holder of the Common Securities or the obligor under the Indenture, the Sponsor
or any of its


 


I-8





















 


subsidiaries may at any time and from time to time purchase outstanding
Capital Securities by tender, in the open market or by private agreement.


 


5.                                       Voting
Rights - Capital Securities.


 


(a)                                  Except
as provided under paragraphs 5(b) and 7 and as otherwise required by law
and the Declaration, the Holders of the Capital Securities will have no voting
rights. The Administrators are required to call a meeting of the Holders of the
Capital Securities if directed to do so by Holders of at least 10% in
liquidation amount of the Capital Securities.


 


(b)                                 Subject
to the requirements of obtaining a tax opinion by the Institutional Trustee in
certain circumstances set forth in the last sentence of this paragraph, the
Holders of a Majority in liquidation amount of the Capital Securities, voting
separately as a class, have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Institutional
Trustee, or exercising any trust or power conferred upon the Institutional
Trustee under the Declaration, including the right to direct the Institutional
Trustee, as holder of the Debentures, to (i) exercise the remedies
available under the Indenture as the holder of the Debentures, (ii) waive
any past default that is waivable under the Indenture, (iii) exercise any right
to rescind or annul a declaration that the principal of all the Debentures
shall be due and payable or (iv) consent on behalf of all the Holders of
the Capital Securities to any amendment, modification or termination of the
Indenture or the Debentures where such consent shall be required; provided,
however, that, where a consent or action under the Indenture would
require the consent or act of the holders of greater than a simple majority in
aggregate principal amount of Debentures (a “Super Majority”) affected
thereby, the Institutional Trustee may only give such consent or take such
action at the written direction of the Holders of at least the proportion in
liquidation amount of the Capital Securities outstanding which the relevant
Super Majority represents of the aggregate principal amount of the Debentures
outstanding. If the Institutional Trustee fails to enforce its rights under the
Debentures after the Holders of a Majority in liquidation amount of such
Capital Securities have so directed the Institutional Trustee, to the fullest
extent permitted by law, a Holder of the Capital Securities may institute a
legal proceeding directly against the Debenture Issuer to enforce the
Institutional Trustee’s rights under the Debentures without first instituting
any legal proceeding against the Institutional Trustee or any other person or
entity. Notwithstanding the foregoing, if an Event of Default has occurred and
is continuing and such event is attributable to the failure of the Debenture
Issuer to pay interest or principal on the Debentures on the date the interest
or principal is payable (or in the case of redemption, the Redemption Date or
the Special Redemption Date, as applicable), then a Holder of record of the
Capital Securities may directly institute a proceeding for enforcement of
payment, on or after the respective due dates specified in the Debentures, to
such Holder directly of the principal of or interest on the Debentures having
an aggregate principal amount equal to the aggregate liquidation amount of the
Capital Securities of such Holder. The Institutional Trustee shall notify all
Holders of the Capital Securities of any default actually known to the
Institutional Trustee with respect to the Debentures unless (x) such
default has been cured prior to the giving of such notice or (y) the
Institutional Trustee determines in good faith that the withholding of such
notice is in the interest of the Holders of such Capital Securities, except
where the default relates to the payment of principal of or interest on any of
the Debentures. Such notice shall state that such Indenture Event of Default
also constitutes an Event of Default hereunder. Except with respect to
directing the time, method and place of conducting a proceeding for a remedy,
the Institutional Trustee shall not take any of the actions described in
clauses (i), (ii) or (iii) above unless the Institutional Trustee has
obtained an opinion of tax counsel to the effect that, as a result of such
action, the Trust will not be classified as other than a grantor trust for
United States federal income tax purposes.


 


In the event the consent of the Institutional Trustee,
as the holder of the Debentures, is required under the Indenture with respect
to any amendment, modification or termination of the Indenture, the
Institutional Trustee shall request the direction of the Holders of the Securities
with respect to such


 


I-9





















 


amendment, modification or termination and shall vote
with respect to such amendment, modification or termination as directed by a
Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the
Indenture would require the consent of a Super-Majority, the Institutional Trustee
may only give such consent at the direction of the Holders of at least the
proportion in liquidation amount of the Securities outstanding which the
relevant Super-Majority represents of the aggregate principal amount of the
Debentures outstanding. The Institutional Trustee shall not take any such
action in accordance with the directions of the Holders of the Securities
unless the Institutional Trustee has obtained an opinion of tax counsel to the
effect that, as a result of such action, the Trust will not be classified as
other than a grantor trust for United States federal income tax purposes.


 


A waiver of an Indenture Event of Default will
constitute a waiver of the corresponding Event of Default hereunder. Any
required approval or direction of Holders of the Capital Securities may be
given at a separate meeting of Holders of the Capital Securities convened for
such purpose, at a meeting of all of the Holders of the Securities in the Trust
or pursuant to written consent. The Institutional Trustee will cause a notice
of any meeting at which Holders of the Capital Securities are entitled to vote,
or of any matter upon which action by written consent of such Holders is to be
taken, to be mailed to each Holder of record of the Capital Securities. Each such
notice will include a statement setting forth the following information (i) the
date of such meeting or the date by which such action is to be taken, (ii) a
description of any resolution proposed for adoption at such meeting on which
such Holders are entitled to vote or of such matter upon which written consent
is sought and (iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Capital Securities will be required
for the Trust to redeem and cancel Capital Securities or to distribute the
Debentures in accordance with the Declaration and the terms of the Securities.


 


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


 


In no event will Holders of the Capital Securities
have the right to vote to appoint, remove or replace the Administrators, which
voting rights are vested exclusively in the Sponsor as the Holder of all of the
Common Securities of the Trust.  Under
certain circumstances as more fully described in the Declaration, Holders of
Capital Securities have the right to vote to appoint, remove or replace the
Institutional Trustee.


 


6.                                       Voting
Rights - Common Securities.


 


(a)                                  Except
as provided under paragraphs 6(b), 6(c) and 7 and as otherwise required by
law and the Declaration, the Common Securities will have no voting rights.


 


(b)                                 The
Holders of the Common Securities are entitled, in accordance with Article IV
of the Declaration, to vote to appoint, remove or replace any Administrators.


 


(c)                                  Subject
to Section 6.7 of the Declaration and only after each Event of Default (if
any) with respect to the Capital Securities has been cured, waived, or
otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority in liquidation amount of
the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the
time, method, place of conducting any proceeding for any remedy available to
the Debenture Trustee, or exercising any trust or power conferred on the
Debenture Trustee with respect to the Debentures, (ii) waiving any past
default and its consequences that is waivable under the Indenture, or (iii) exercising


 


I-10





















 


any right to rescind or annul a declaration that the
principal of all the Debentures shall be due and payable; provided, however,
that, where a consent or action under the Indenture would require a Super
Majority, the Institutional Trustee may only give such consent or take such
action at the written direction of the Holders of at least the proportion in
liquidation amount of the Common Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding.
Notwithstanding this paragraph 6(c), the Institutional Trustee shall not
revoke any action previously authorized or approved by a vote or consent of the
Holders of the Capital Securities. Other than with respect to directing the
time, method and place of conducting any proceeding for any remedy available to
the Institutional Trustee or the Debenture Trustee as set forth above, the
Institutional Trustee shall not take any action described in (i), (ii) or
(iii) above, unless the Institutional Trustee has obtained an opinion of tax
counsel to the effect that for the purposes of United States federal income tax
the Trust will not be classified as other than a grantor trust on account of
such action. If the Institutional Trustee fails to enforce its rights under the
Declaration to the fullest extent permitted by law, any Holder of the Common
Securities may institute a legal proceeding directly against any Person to
enforce the Institutional Trustee’s rights under the Declaration, without first
instituting a legal proceeding against the Institutional Trustee or any other
Person.


 


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


 


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


 


7.                                       Amendments
to Declaration and Indenture.


 


(a)                                  In
addition to any requirements under Section 11.1 of the Declaration, if any
proposed amendment to the Declaration provides for, or the Institutional
Trustee, Sponsor or Administrators otherwise propose to effect, (i) any
action that would adversely affect the powers, preferences or special rights of
the Securities, whether by way of amendment to the Declaration or otherwise, or
(ii) the Liquidation of the Trust, other than as described in Section 7.1
of the Declaration, then the Holders of outstanding Securities, voting together
as a single class, will be entitled to vote on such amendment or proposal and
such amendment or proposal shall not be effective except with the approval of
the Holders of at least a Majority in liquidation amount of the Securities,
affected thereby; provided, however, if any amendment or proposal
referred to in clause (i) above would adversely affect only the Capital
Securities or only the Common Securities, then only the affected class will be
entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of a Majority in liquidation
amount of such class of Securities.


 


(b)                                 In
the event the consent of the Institutional Trustee as the holder of the
Debentures is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and
shall vote with respect to such amendment, modification, or termination as
directed by a Majority in liquidation amount of the 


 


I-11





















 


Securities voting together as a single class; provided,
however, that where a consent under the Indenture would require a Super
Majority, the Institutional Trustee may only give such consent at the direction
of the Holders of at least the proportion in liquidation amount of the
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding.


 


(c)                                  Notwithstanding
the foregoing, no amendment or modification may be made to the Declaration if
such amendment or modification would (i) cause the Trust to be classified
for purposes of United States federal income taxation as other than a grantor
trust, (ii) reduce or otherwise adversely affect the powers of the
Institutional Trustee or (iii) cause the Trust to be deemed an Investment
Company which is required to be registered under the Investment Company Act.


 


(d)                                 Notwithstanding
any provision of the Declaration, the right of any Holder of the Capital
Securities to receive payment of distributions and other payments upon
redemption or otherwise, on or after their respective due dates, or to
institute a suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder. For the protection and enforcement of the foregoing provision, each and
every Holder of the Capital Securities shall be entitled to such relief as can
be given either at law or equity.


 


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


 


9.                                       Ranking.  The Capital Securities rank pari passu with and payment thereon shall be made Pro Rata
with the Common Securities except that, where an Event of Default has occurred
and is continuing, the rights of Holders of the Common Securities to receive
payment of Distributions and payments upon liquidation, redemption and
otherwise are subordinated to the rights of the Holders of the Capital
Securities with the result that no payment of any Distribution on, or
Redemption Price (or Special Redemption Price) of, any Common Security, and no
other payment on account of redemption, liquidation or other acquisition of
Common Securities, shall be made unless payment in full in cash of all
accumulated and unpaid Distributions on all outstanding Capital Securities for
all distribution periods terminating on or prior thereto, or in the case of
payment of the Redemption Price (or Special Redemption Price) the full amount
of such Redemption Price (or Special Redemption Price) on all outstanding
Capital Securities then called for redemption, shall have been made or provided
for, and all funds immediately available to the Institutional Trustee shall
first be applied to the payment in full in cash of all Distributions on, or the
Redemption Price (or Special Redemption Price) of, the Capital Securities then
due and payable.


 


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


 


11.                                 No
Preemptive Rights. The Holders of the Securities shall have no preemptive
or similar rights to subscribe for any additional securities.


 


I-12





















 


12.                                 Miscellaneous.
These terms constitute a part of the Declaration. The Sponsor will provide a
copy of the Declaration, the Guarantee, and the Indenture to a Holder without
charge on written request to the Sponsor at its principal place of business.


 


I-13





















 


EXHIBIT A-1


 


FORM OF CAPITAL SECURITY CERTIFICATE


 


[FORM OF FACE OF
SECURITY]


 


THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), ANY STATE SECURITIES
LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. 
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND ANY APPLICABLE STATE SECURITIES LAWS. 
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER THIS SECURITY ONLY (A) TO THE SPONSOR OR THE
TRUST, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A SO LONG AS THIS SECURITY IS ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A IN ACCORDANCE WITH RULE 144A, (D) TO
A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903
OR RULE 904 (AS APPLICABLE) OF REGULATION S UNDER THE SECURITIES ACT,
(E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF
SUBPARAGRAPH (A) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THIS CAPITAL SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH
AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION
OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
SPONSOR’S AND THE TRUST’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM IN ACCORDANCE WITH THE DECLARATION OF
TRUST, A COPY OF WHICH MAY BE OBTAINED FROM THE SPONSOR OR THE TRUST.  HEDGING TRANSACTIONS INVOLVING THIS SECURITY
MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.


 


THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT,
INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I
OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”),
OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”)
(EACH A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY
REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING “PLAN
ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THE SECURITIES OR ANY INTEREST THEREIN,
UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR EXEMPTIVE RELIEF AVAILABLE
UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23,
95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND
HOLDING OF THIS SECURITY IS NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975
OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING.  ANY PURCHASER OR HOLDER OF THE SECURITIES OR
ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND
HOLDING THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE


 


A-1-1























 


MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO
WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON
ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR
ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH
PURCHASE, OR (ii) SUCH PURCHASE WILL NOT RESULT IN A PROHIBITED TRANSACTION
UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH
THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.


 


THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED
ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000.00 (100
SECURITIES) AND MULTIPLES OF $1,000.00 IN EXCESS THEREOF.  ANY ATTEMPTED TRANSFER OF SECURITIES IN A
BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000.00 SHALL BE DEEMED TO
BE VOID AND OF NO LEGAL EFFECT WHATSOEVER.


 


THE HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY
WITH THE FOREGOING RESTRICTIONS.


 


IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL
DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS MAY BE REQUIRED BY THE DECLARATION TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.


 




	
  Certificate Number P-1

  	
   

  	
  7,500 Capital
  Securities

  






 


March 17,
2004


 


Certificate
Evidencing Floating Rate Capital Securities


 


of


 


First Regional
Statutory Trust III


 


(liquidation
amount $1,000.00 per Capital Security)


 


First Regional Statutory Trust III, a statutory
trust created under the laws of the State of Connecticut (the “Trust”), hereby
certifies that Hare & Co. (the “Holder”), as the nominee of The Bank of New
York, indenture trustee under the Indenture dated as of March 17, 2004
among Preferred Term Securities XIII, Ltd., Preferred Term Securities XIII,
Inc. and The Bank of New York, is the registered owner of capital securities of
the Trust representing undivided beneficial interests in the assets of the
Trust, (liquidation amount $1,000.00 per capital security) (the “Capital
Securities”). Subject to the Declaration (as defined below), the Capital
Securities are transferable on the books and records of the Trust in person or
by a duly authorized attorney, upon surrender of this Certificate duly endorsed
and in proper form for transfer.  The
Capital Securities represented hereby are issued pursuant to, and the designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Capital Securities shall in all respects be subject to, the provisions of
the Amended and Restated Declaration of Trust of the Trust dated as of March 17,
2004, among Jack A. Sweeney, H. Anthony Gartshore and Thomas McCullough, as
Administrators, U.S. Bank National Association, as Institutional Trustee, First
Regional Bancorp, as Sponsor, and the holders from time to time of undivided
beneficial interests in the assets of the Trust, including the designation of
the terms of the Capital Securities as set forth in Annex I to such
amended and restated declaration as the same may be amended from time to time
(the “Declaration”).  Capitalized terms
used herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Guarantee to the
extent provided therein. The Sponsor will provide a copy of the Declaration,
the Guarantee, and the Indenture to the Holder without charge upon written
request to the Sponsor at its principal place of business.


 


A-1-2





















 


Upon receipt of this Security, the Holder is bound by
the Declaration and is entitled to the benefits thereunder.


 


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


 


This Capital Security is governed by, and construed in
accordance with, the laws of the State of Connecticut, without regard to
principles of conflict of laws.


 


Signatures
appear on following page


 


A-1-3





















 


IN WITNESS WHEREOF, the Trust has duly executed this
certificate.


 


	
   

  	
  FIRST REGIONAL STATUTORY TRUST III

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title: Administrator

  



 


 


CERTIFICATE OF AUTHENTICATION


 


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


 


	
   

  	
  U.S. BANK NATIONAL ASSOCIATION,

  
	
   

  	
  as the Institutional Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Officer

  



 


A-1-4





















 


[FORM OF REVERSE
OF CAPITAL SECURITY]


 


Distributions payable on each Capital Security will be
payable at an annual rate equal to 3.90% beginning on (and including) the date
of original issuance and ending on (but excluding) the Distribution Payment
Date in June 2004 and at an annual rate for each successive period
beginning on (and including) the Distribution Payment Date in June 2004,
and each succeeding Distribution Payment Date, and ending on (but excluding)
the next succeeding Distribution Payment Date (each a “Distribution Period”),
equal to 3-Month LIBOR, determined as described below, plus 2.79% (the “Coupon
Rate”), applied to the stated liquidation amount of $1,000.00 per Capital
Security, such rate being the rate of interest payable on the Debentures to be
held by the Institutional Trustee. Distributions in arrears will bear interest
thereon compounded quarterly at the Distribution Rate (to the extent permitted
by applicable law).  The term “Distributions”
as used herein includes cash distributions and any such compounded
distributions unless otherwise noted.  A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee has funds available therefor.  As used herein, “Determination Date” means
the date that is two London Banking Days (i.e., a business day in which
dealings in deposits in U.S. dollars are transacted in the London interbank
market) preceding the commencement of the relevant Distribution Period.  The amount of the Distribution payable for
any Distribution Period will be calculated by applying the Distribution Rate to
the stated liquidation amount outstanding at the commencement of the
Distribution Period on the basis of the actual number of days in the
Distribution Period concerned divided by 360.


 


“3-Month LIBOR” as used herein, means the London
interbank offered interest rate for three-month U.S. dollar deposits determined
by the Debenture Trustee in the following order of priority:  (i) the rate (expressed as a percentage per
annum) for U.S. dollar deposits having a three-month maturity that appears on
Telerate Page 3750 as of 11:00 a.m. (London time) on the related Determination
Date (“Telerate Page 3750” means the display designated as “Page 3750” on the
Dow Jones Telerate Service or such other page as may replace Page 3750 on that
service or such other service or services as may be nominated by the British
Bankers’ Association as the information vendor for the purpose of displaying
London interbank offered rates for U.S. dollar deposits); (ii) if such rate
cannot be identified on the related Determination Date, the Debenture Trustee
will request the principal London offices of four leading banks in the London
interbank market to provide such banks’ offered quotations (expressed as
percentages per annum) to prime banks in the London interbank market for U.S.
dollar deposits having a three-month maturity as of 11:00 a.m. (London time) on
such Determination Date.  If at least two
quotations are provided, 3-Month LIBOR will be the arithmetic mean of such
quotations; (iii) if fewer than two such quotations are provided as
requested in clause (ii) above, the Debenture Trustee will request four major
New York City banks to provide such banks’ offered quotations (expressed as
percentages per annum) to leading European banks for loans in U.S. dollars as
of 11:00 a.m. (London time) on such Determination Date.  If at least two such quotations are provided,
3-Month LIBOR will be the arithmetic mean of such quotations; and (iv) if
fewer than two such quotations are provided as requested in clause (iii) above,
3-Month LIBOR will be a 3-Month LIBOR determined with respect to the
Distribution Period immediately preceding such current Distribution
Period.  If the rate for U.S. dollar
deposits having a three-month maturity that initially appears on Telerate Page
3750 as of 11:00 a.m. (London time) on the related Determination Date is
superseded on the Telerate Page 3750 by a corrected rate by 12:00 noon (London
time) on such Determination Date, then the corrected rate as so substituted on
the applicable page will be the applicable 3-Month LIBOR for such Determination
Date.


 


The Distribution Rate for any Distribution Period will
at no time be higher than the maximum rate then permitted by New York law as
the same may be modified by United States law.


 


All percentages resulting from any calculations on the
Capital Securities will be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point, with five one-millionths of a
percentage point rounded upward (e.g., 9.876545% (or .09876545) being rounded
to 9.87655% (or


 


A-1-5





















 


.0987655), and all dollar amounts used in or resulting
from such calculation will be rounded to the nearest cent (with one-half cent
being rounded upward)).


 


Except as otherwise described below, Distributions on
the Capital Securities will be cumulative, will accrue from the date of
original issuance and will be payable quarterly in arrears on March 17, June 17,
September 17 and December 17 of each year or if any such day is not a
Business Day, then the next succeeding Business Day (each such day, a “Distribution
Payment Date”), commencing on the Distribution Payment Date in June 2004.  The Debenture Issuer has the right under the
Indenture to defer payments of interest on the Debentures, so long as no
Indenture Event of Default has occurred and is continuing, by extending the
interest payment period for up to 20 consecutive quarterly periods (each an “Extension
Period”) at any time and from time to time on the Debentures, subject to the
conditions described below, during which Extension Period no interest shall be
due and payable.  During any Extension
Period, interest will continue to accrue on the Debentures, and interest on
such accrued interest will accrue at an annual rate equal to the Distribution
Rate in effect for each such Extension Period, compounded quarterly from the
date such interest would have been payable were it not for the Extension
Period, to the extent permitted by law (such interest referred to herein as “Additional
Interest”). No Extension Period may end on a date other than a Distribution
Payment Date. At the end of any such Extension Period, the Debenture Issuer
shall pay all interest then accrued and unpaid on the Debentures (together with
Additional Interest thereon); provided, however, that no
Extension Period may extend beyond the Maturity Date.  Prior to the termination of any Extension
Period, the Debenture Issuer may further extend such period, provided that such
period together with all such previous and further consecutive extensions
thereof shall not exceed 20 consecutive quarterly periods, or extend beyond the
Maturity Date. Upon the termination of any Extension Period and upon the
payment of all accrued and unpaid interest and Additional Interest, the
Debenture Issuer may commence a new Extension Period, subject to the foregoing
requirements.  No interest or Additional
Interest shall be due and payable during an Extension Period, except at the end
thereof, but each installment of interest that would otherwise have been due
and payable during such Extension Period shall bear Additional Interest.  During any Extension Period, Distributions on
the Capital Securities shall be deferred for a period equal to the Extension
Period.  If Distributions are deferred,
the Distributions due shall be paid on the date that the related Extension
Period terminates, to Holders of the Securities as they appear on the books and
records of the Trust on the record date immediately preceding such date.
Distributions on the Securities must be paid on the dates payable (after giving
effect to any Extension Period) to the extent that the Trust has funds
available for the payment of such distributions in the Property Account of the
Trust.  The Trust’s funds available for
Distribution to the Holders of the Securities will be limited to payments
received from the Debenture Issuer.  The
payment of Distributions out of moneys held by the Trust is guaranteed by the
Guarantor pursuant to the Guarantee.


 


The Capital Securities shall be redeemable as provided
in the Declaration.


 


A-1-6





















 


ASSIGNMENT


 


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

  
	
   

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Insert address and zip
  code of assignee) and irrevocably appoints

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
				



 


 


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


 


	
   

  	
  Date:

  	
   

  	
   

  
	
   

  
	
   

  	
  Signature:

  	
   

  	
   

  
					



 


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


 


Signature Guarantee:(1)


 


 










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


 


A-1-7





















 


EXHIBIT A-2


 


FORM OF COMMON
SECURITY CERTIFICATE


 


THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION.


 


THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT IN
COMPLIANCE WITH SECTION 8.1 OF THE DECLARATION.


 


	
  Certificate Number C-1

  	
   

  	
  232 Common
  Securities

  



 


March 17,
2004


 


Certificate
Evidencing Floating Rate Common Securities


 


of


 


First Regional
Statutory Trust III


 


First Regional Statutory Trust III, a statutory
trust created under the laws of the State of Connecticut (the “Trust”), hereby
certifies that First Regional Bancorp (the “Holder”) is the registered owner of
common securities of the Trust representing undivided beneficial interests in
the assets of the Trust (the “Common Securities”).  The Common Securities represented hereby are
issued pursuant to, and the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities shall in
all respects be subject to, the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of March 17, 2004, among Jack
A. Sweeney, H. Anthony Gartshore and Thomas McCullough, as Administrators, U.S.
Bank National Association, as Institutional Trustee, First Regional Bancorp, as
Sponsor, and the holders from time to time of undivided beneficial interest in
the assets of the Trust including the designation of the terms of the Common
Securities as set forth in Annex I to such amended and restated declaration, as
the same may be amended from time to time (the “Declaration”).  Capitalized terms used herein but not defined
shall have the meaning given them in the Declaration.  The Holder is entitled to the benefits of the
Guarantee to the extent provided therein. 
The Sponsor will provide a copy of the Declaration, the Guarantee and
the Indenture to the Holder without charge upon written request to the Sponsor
at its principal place of business.


 


As set forth in the Declaration, when an Event of
Default has occurred and is continuing, the rights of Holders of Common
Securities to payment in respect of Distributions and payments upon
Liquidation, redemption or otherwise are subordinated to the rights of payment
of Holders of the Capital Securities.


 


Upon receipt of this Certificate, the Holder is bound
by the Declaration and is entitled to the benefits thereunder.


 


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


 


This Common Security is governed by, and construed in
accordance with, the laws of the State of Connecticut, without regard to
principles of conflict of laws.


 


A-2-1





















 


IN WITNESS WHEREOF, the Trust has duly executed this
certificate.


 


	
   

  	
  FIRST REGIONAL STATUTORY TRUST III

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title: Administrator

  



 


A-2-2





















 


[FORM OF REVERSE
OF COMMON SECURITY]


 


Distributions payable on each Common Security will be
payable at an annual rate equal to 3.90% beginning on (and including) the date
of original issuance and ending on (but excluding) the Distribution Payment
Date in June 2004 and at an annual rate for each successive period
beginning on (and including) the Distribution Payment Date in June 2004,
and each succeeding Distribution Payment Date, and ending on (but excluding)
the next succeeding Distribution Payment Date (each a “Distribution Period”),
equal to 3-Month LIBOR, determined as described below, plus 2.79% (the “Coupon
Rate”), applied to the stated liquidation amount of $1,000.00 per Common
Security, such rate being the rate of interest payable on the Debentures to be
held by the Institutional Trustee. Distributions in arrears will bear interest
thereon compounded quarterly at the Distribution Rate (to the extent permitted
by applicable law).  The term “Distributions”
as used herein includes cash distributions and any such compounded
distributions unless otherwise noted.  A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee has funds available therefor.  As used herein, “Determination Date” means the
date that is two London Banking Days (i.e., a business day in which dealings in
deposits in U.S. dollars are transacted in the London interbank market)
preceding the commencement of the relevant Distribution Period.  The amount of the Distribution payable for
any Distribution Period will be calculated by applying the Distribution Rate to
the stated liquidation amount outstanding at the commencement of the
Distribution Period on the basis of the actual number of days in the
Distribution Period concerned divided by 360.


 


“3-Month LIBOR” as used herein, means the London
interbank offered interest rate for three-month U.S. dollar deposits determined
by the Debenture Trustee in the following order of priority:  (i) the rate (expressed as a percentage per
annum) for U.S. dollar deposits having a three-month maturity that appears on
Telerate Page 3750 as of 11:00 a.m. (London time) on the related Determination
Date (“Telerate Page 3750” means the display designated as “Page 3750” on the
Dow Jones Telerate Service or such other page as may replace Page 3750 on that
service or such other service or services as may be nominated by the British
Bankers’ Association as the information vendor for the purpose of displaying
London interbank offered rates for U.S. dollar deposits); (ii) if such rate
cannot be identified on the related Determination Date, the Debenture Trustee
will request the principal London offices of four leading banks in the London
interbank market to provide such banks’ offered quotations (expressed as percentages
per annum) to prime banks in the London interbank market for U.S. dollar
deposits having a three-month maturity as of 11:00 a.m. (London time) on such
Determination Date.  If at least two
quotations are provided, 3-Month LIBOR will be the arithmetic mean of such
quotations; (iii) if fewer than two such quotations are provided as requested
in clause (ii) above, the Debenture Trustee will request four major New York
City banks to provide such banks’ offered quotations (expressed as percentages
per annum) to leading European banks for loans in U.S. dollars as of 11:00 a.m.
(London time) on such Determination Date. 
If at least two such quotations are provided, 3-Month LIBOR will be the
arithmetic mean of such quotations; and (iv) if fewer than two such quotations
are provided as requested in clause (iii) above, 3-Month LIBOR will be a
3-Month LIBOR determined with respect to the Distribution Period immediately
preceding such current Distribution Period. 
If the rate for U.S. dollar deposits having a three-month maturity that
initially appears on Telerate Page 3750 as of 11:00 a.m. (London time) on the
related Determination Date is superseded on the Telerate Page 3750 by a
corrected rate by 12:00 noon (London time) on such Determination Date, then the
corrected rate as so substituted on the applicable page will be the applicable
3-Month LIBOR for such Determination Date.


 


The Distribution Rate for any Distribution Period will
at no time be higher than the maximum rate then permitted by New York law as the
same may be modified by United States law.


 


All percentages resulting from any calculations on the
Common Securities will be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point, with five one-millionths of a
percentage point rounded upward (e.g., 9.876545% (or .09876545) being rounded
to 9.87655% (or


 


A-2-3





















 


.0987655), and all dollar amounts used in or resulting
from such calculation will be rounded to the nearest cent (with one-half cent
being rounded upward)).


 


Except as otherwise described below, Distributions on
the Common Securities will be cumulative, will accrue from the date of original
issuance and will be payable quarterly in arrears on March 17, June 17,
September 17 and December 17 of each year or if any such day is not a
Business Day, then the next succeeding Business Day (each such day, a “Distribution
Payment Date”), commencing on the Distribution Payment Date in June 2004.
The Debenture Issuer has the right under the Indenture to defer payments of
interest on the Debentures, so long as no Indenture Event of Default has
occurred and is continuing, by extending the interest payment period for up to
20 consecutive quarterly periods (each an “Extension Period”) at any time
and from time to time on the Debentures, subject to the conditions described
below, during which Extension Period no interest shall be due and payable.  During any Extension Period, interest will
continue to accrue on the Debentures, and interest on such accrued interest
will accrue at an annual rate equal to the Distribution Rate in effect for each
such Extension Period, compounded quarterly from the date such interest would
have been payable were it not for the Extension Period, to the extent permitted
by law (such interest referred to herein as “Additional Interest”). No
Extension Period may end on a date other than a Distribution Payment Date.  At the end of any such Extension Period, the
Debenture Issuer shall pay all interest then accrued and unpaid on the
Debentures (together with Additional Interest thereon); provided, however,
that no Extension Period may extend beyond the Maturity Date.  Prior to the termination of any Extension
Period, the Debenture Issuer may further extend such period, provided that such
period together with all such previous and further consecutive extensions
thereof shall not exceed 20 consecutive quarterly periods, or extend beyond the
Maturity Date. Upon the termination of any Extension Period and upon the
payment of all accrued and unpaid interest and Additional Interest, the
Debenture Issuer may commence a new Extension Period, subject to the foregoing
requirements. No interest or Additional Interest shall be due and payable
during an Extension Period, except at the end thereof, but each installment of
interest that would otherwise have been due and payable during such Extension
Period shall bear Additional Interest. 
During any Extension Period, Distributions on the Common Securities
shall be deferred for a period equal to the Extension Period.  If Distributions are deferred, the
Distributions due shall be paid on the date that the related Extension Period
terminates, to Holders of the Securities as they appear on the books and records
of the Trust on the record date immediately preceding such date. Distributions
on the Securities must be paid on the dates payable (after giving effect to any
Extension Period) to the extent that the Trust has funds available for the
payment of such distributions in the Property Account of the Trust. The Trust’s
funds available for Distribution to the Holders of the Securities will be
limited to payments received from the Debenture Issuer.


 


The Common Securities shall be redeemable as provided
in the Declaration.


 


A-2-4





















 


ASSIGNMENT


 


 


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


 


	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

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

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Insert address and zip
  code of assignee) and irrevocably appoints

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
				



 


 


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


 


	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  Signature Guarantee(2)

  
						



 


 










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


 


A-2-5





















 


EXHIBIT B


 


SPECIMEN
OF INITIAL DEBENTURE


 


FLOATING
RATE JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE


 


THIS SECURITY IS NOT A SAVINGS ACCOUNT OR DEPOSIT AND
IT IS NOT INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED
STATES, INCLUDING THE FEDERAL DEPOSIT INSURANCE CORPORATION.


 


THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), ANY STATE SECURITIES LAWS OR
ANY OTHER APPLICABLE SECURITIES LAW. 
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND ANY APPLICABLE STATE SECURITIES LAWS. 
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER THIS SECURITY ONLY (A) TO THE COMPANY, (B) PURSUANT
TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A
SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A IN
ACCORDANCE WITH RULE 144A, (D) TO A NON-U.S. PERSON IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE)
OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED
INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (A) OF RULE 501 UNDER
THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT, OR FOR
THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY
OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE INDENTURE, A COPY OF
WHICH MAY BE OBTAINED FROM THE COMPANY.


 


THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT,
INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I
OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”),  OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE “CODE”) (EACH A “PLAN”), OR AN ENTITY WHOSE
UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN
THE ENTITY, AND NO PERSON INVESTING “PLAN ASSETS” OF ANY PLAN MAY ACQUIRE OR
HOLD THE SECURITIES OR ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS
ELIGIBLE FOR EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED
TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER
APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SECURITY IS NOT
PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH
RESPECT TO SUCH PURCHASE OR HOLDING.  ANY
PURCHASER OR HOLDER OF THE SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO
HAVE REPRESENTED BY ITS PURCHASE AND


 


B-1





















 


HOLDING THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE
BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO
WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON
ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR
ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH
PURCHASE, OR (ii) SUCH PURCHASE WILL NOT RESULT IN A PROHIBITED TRANSACTION
UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH
THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.


 


THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED
ONLY IN BLOCKS HAVING AN AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN
$100,000.00 AND MULTIPLES OF $1,000.00 IN EXCESS THEREOF.  ANY ATTEMPTED TRANSFER OF THIS SECURITY IN A
BLOCK HAVING AN AGGREGATE PRINCIPAL AMOUNT OF LESS THAN $100,000.00 SHALL BE
DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER.


 


THE HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY
WITH THE FOREGOING RESTRICTIONS.


 


IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL
DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS MAY BE REQUIRED BY THE INDENTURE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.


 


Floating Rate
Junior Subordinated Deferrable Interest Debenture


 


of


 


First Regional
Bancorp


 


March 17,
2004


 


First Regional Bancorp, a California corporation (the “Company”
which term includes any successor Person under the Indenture hereinafter
referred to), for value received promises to pay to U.S. Bank National
Association, not in its individual capacity but solely as Institutional Trustee
for First Regional Statutory Trust III (the “Holder”) or registered
assigns, the principal sum of seven million seven hundred thirty-two thousand
dollars ($7,732,000.00) on March 17, 2034, and to pay interest on said
principal sum from March 17, 2004, or from the most recent Interest
Payment Date (as defined below) to which interest has been paid or duly
provided for, quarterly (subject to deferral as set forth herein) in arrears on
March 17, June 17, September 17 and December 17 of each
year or if such day is not a Business Day, then the next succeeding Business
Day (each such date, an “Interest Payment Date”) (it being understood that
interest accrues for any such non-Business Day), commencing on the Interest
Payment Date in June 2004, at an annual rate equal to 3.90% beginning on
(and including) the date of original issuance and ending on (but excluding) the
Interest Payment Date in June 2004 and at an annual rate for each
successive period beginning on (and including) the Interest Payment Date in June 2004,
and each succeeding Interest Payment Date, and ending on (but excluding) the
next succeeding Interest Payment Date (each a “Distribution Period”), equal to
3-Month LIBOR, determined as described below, plus 2.79% (the “Coupon Rate”),
applied to the principal amount hereof, until the principal hereof is paid or
duly provided for or made available for payment, and on any overdue principal
and (without duplication and to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest
(including Additional Interest) at the Interest Rate in effect for each
applicable period, compounded quarterly, from the dates such amounts are due
until they are paid or made available for payment.  The amount of interest payable for any period
will be computed on the basis of the actual number of days in the Distribution
Period concerned divided by 360.  The
interest installment so


 


B-2





















 


payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Debenture (or one or more Predecessor Securities) is
registered at the close of business on the regular record date for such
interest installment, which shall be fifteen days prior to the day on which the
relevant Interest Payment Date occurs. 
Any such interest installment not so punctually paid or duly provided
for shall forthwith cease to be payable to the Holder on such regular record
date and may be paid to the Person in whose name this Debenture (or one or more
Predecessor Securities) is registered at the close of business on a special
record date.


 


“3-Month LIBOR” as used herein, means the London
interbank offered interest rate for three-month U.S. dollar deposits determined
by the Trustee in the following order of priority:  (i) the rate (expressed as a percentage per
annum) for U.S. dollar deposits having a three-month maturity that appears on
Telerate Page 3750 as of 11:00 a.m. (London time) on the related Determination
Date (“Telerate Page 3750” means the display designated as “Page 3750” on the
Dow Jones Telerate Service or such other page as may replace Page 3750 on that
service or such other service or services as may be nominated by the British
Bankers’ Association as the information vendor for the purpose of displaying
London interbank offered rates for U.S. dollar deposits); (ii) if such rate
cannot be identified on the related Determination Date, the Trustee will
request the principal London offices of four leading banks in the London
interbank market to provide such banks’ offered quotations (expressed as
percentages per annum) to prime banks in the London interbank market for U.S.
dollar deposits having a three-month maturity as of 11:00 a.m. (London time) on
such Determination Date.  If at least two
quotations are provided, 3-Month LIBOR will be the arithmetic mean of such
quotations; (iii) if fewer than two such quotations are provided as
requested in clause (ii) above, the Trustee will request four major New York
City banks to provide such banks’ offered quotations (expressed as percentages
per annum) to leading European banks for loans in U.S. dollars as of 11:00 a.m.
(London time) on such Determination Date. 
If at least two such quotations are provided, 3-Month LIBOR will be the
arithmetic mean of such quotations; and (iv) if fewer than two such
quotations are provided as requested in clause (iii) above, 3-Month LIBOR will
be a 3-Month LIBOR determined with respect to the Distribution Period
immediately preceding such current Distribution Period.  If the rate for U.S. dollar deposits having a
three-month maturity that initially appears on Telerate Page 3750 as of 11:00
a.m. (London time) on the related Determination Date is superseded on the
Telerate Page 3750 by a corrected rate by 12:00 noon (London time) on such
Determination Date, then the corrected rate as so substituted on the applicable
page will be the applicable 3-Month LIBOR for such Determination Date.  As used herein, “Determination Date” means
the date that is two London Banking Days (i.e., a business day in which
dealings in deposits in U.S. dollars are transacted in the London interbank
market) preceding the commencement of the relevant Distribution Period.


 


The Interest Rate for any Distribution Period will at
no time be higher than the maximum rate then permitted by New York law as the
same may be modified by United States law.


 


All percentages resulting from any calculations on the
Debentures will be rounded, if necessary, to the nearest one hundred-thousandth
of a percentage point, with five one-millionths of a percentage point rounded
upward (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655),
and all dollar amounts used in or resulting from such calculation will be
rounded to the nearest cent (with one-half cent being rounded upward)).


 


The principal of and interest on this Debenture shall
be payable at the office or agency of the Trustee (or other paying agent appointed
by the Company) maintained for that purpose in any coin or currency of the
United States of America that at the time of payment is legal tender for
payment of public and private debts; provided, however, that
payment of interest may be made by check mailed to the registered holder at
such address as shall appear in the Debenture Register if a request for a wire
transfer by such holder has not been received by the Company or by wire
transfer to an account appropriately designated by the holder hereof.  Notwithstanding the foregoing, so long as the
holder of this Debenture is


 


B-3





















 


the Institutional Trustee, the payment of the
principal of and interest on this Debenture will be made in immediately available
funds at such place and to such account as may be designated by the Trustee.


 


So long as no Event of Default has occurred and is
continuing, the Company shall have the right, from time to time, and without
causing an Event of Default, to defer payments of interest on the Debentures by
extending the interest payment period on the Debentures at any time and from
time to time during the term of the Debentures, for up to 20 consecutive
quarterly periods (each such extended interest payment period, an “Extension
Period”), during which Extension Period no interest (including Additional
Interest) shall be due and payable (except any Additional Sums that may be due
and payable).  No Extension Period may
end on a date other than an Interest Payment Date.  During an Extension Period, interest will
continue to accrue on the Debentures, and interest on such accrued interest
will accrue at an annual rate equal to the Interest Rate in effect for such
Extension Period, compounded quarterly from the date such interest would have
been payable were it not for the Extension Period, to the extent permitted by
law (such interest referred to herein as “Additional Interest”).  At the end of any such Extension Period the
Company shall pay all interest then accrued and unpaid on the Debentures
(together with Additional Interest thereon); provided, however,
that no Extension Period may extend beyond the Maturity Date; provided  further,
however, that during any such Extension Period, the Company shall not
and shall not permit any Affiliate to engage in any of the activities or
transactions described on the reverse side hereof and in the Indenture.  Prior to the termination of any Extension
Period, the Company may further extend such period, provided that such period
together with all such previous and further consecutive extensions thereof
shall not exceed 20 consecutive quarterly periods, or extend beyond the
Maturity Date.  Upon the termination of
any Extension Period and upon the payment of all accrued and unpaid interest
and Additional Interest, the Company may commence a new Extension Period,
subject to the foregoing requirements. 
No interest or Additional Interest shall be due and payable during an
Extension Period, except at the end thereof, but each installment of interest
that would otherwise have been due and payable during such Extension Period
shall bear Additional Interest.  The
Company must give the Trustee notice of its election to begin or extend an
Extension Period at least 5 Business Days prior to the regular record date (as
such term is used in Section 2.8 of the Indenture) immediately preceding
the Interest Payment Date with respect to which interest on the Debentures
would have been payable except for the election to begin or extend such
Extension Period.


 


The indebtedness evidenced by this Debenture is, to
the extent provided in the Indenture, subordinate and junior in right of
payment to the prior payment in full of all Senior Indebtedness, and this
Debenture is issued subject to the provisions of the Indenture with respect
thereto.  Each holder of this Debenture,
by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to
take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination so provided and (c) appoints the Trustee his
or her attorney-in-fact for any and all such purposes.  Each holder hereof, by his or her acceptance
hereof, hereby waives all notice of the acceptance of the subordination provisions
contained herein and in the Indenture by each holder of Senior Indebtedness,
whether now outstanding or hereafter incurred, and waives reliance by each such
holder upon said provisions.


 


This Debenture shall not be entitled to any benefit
under the Indenture hereinafter referred to, be valid or become obligatory for
any purpose until the certificate of authentication hereon shall have been
signed by or on behalf of the Trustee.


 


The provisions of this Debenture are continued on the
reverse side hereof and such provisions shall for all purposes have the same
effect as though fully set forth at this place.


 


Signatures
appear on the following page


 


B-4





















 


IN WITNESS WHEREOF, the Company has duly executed this
certificate.


 


	
   

  	
  FIRST REGIONAL BANCORP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
    Name:

  
	
   

  	
   

  	
    Title:

  



 


 


CERTIFICATE OF
AUTHENTICATION


 


This is one of the Debentures referred to in the
within-mentioned Indenture.


 


	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   Authorized Officer

  



 


B-5





















 


REVERSE OF DEBENTURE


 


This Debenture is one of the floating rate junior
subordinated deferrable interest debentures of the Company, all issued or to be
issued under and pursuant to the Indenture dated as of March 17, 2004 (the
“Indenture”), duly executed and delivered between the Company and the Trustee,
to which Indenture reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Debentures.  The Debentures are limited in aggregate
principal amount as specified in the Indenture.


 


Upon the occurrence and continuation of a Special
Event prior to the Interest Payment Date in March 2009, the Company shall
have the right to redeem the Debentures in whole, but not in part, at any
Interest Payment Date, within 120 days following the occurrence of such Special
Event, at the Special Redemption Price.


 


In addition, the Company shall have the right to
redeem the Debentures, in whole or in part, but in all cases in a principal
amount with integral multiples of $1,000.00, on any Interest Payment Date on or
after the Interest Payment Date in March 2009, at the Redemption Price.


 


Prior to 10:00 a.m. New York City time on the
Redemption Date or Special Redemption Date, as applicable, the Company will
deposit with the Trustee or with one or more paying agents an amount of money
sufficient to redeem on the Redemption Date or the Special Redemption Date, as
applicable, all the Debentures so called for redemption at the appropriate
Redemption Price or Special Redemption Price.


 


If all, or less than all, the Debentures are to be
redeemed, the Company will give the Trustee notice not less than 45 nor more
than 60 days, respectively, prior to the Redemption Date or Special
Redemption Date, as applicable, as to the aggregate principal amount of
Debentures to be redeemed and the Trustee shall select, in such manner as in
its sole discretion it shall deem appropriate and fair, the Debentures or
portions thereof (in integral multiples of $1,000.00) to be redeemed.


 


Notwithstanding the foregoing, any redemption of
Debentures by the Company shall be subject to the receipt of any and all
required regulatory approvals.


 


In case an Event of Default shall have occurred and be
continuing, upon demand of the Trustee, the principal of all of the Debentures
shall become due and payable in the manner, with the effect and subject to the
conditions provided in the Indenture.


 


The Indenture contains provisions permitting the
Company and the Trustee, with the consent of the holders of not less than a
majority in aggregate principal amount of the Debentures at the time
outstanding, to execute supplemental indentures for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of any supplemental indenture or of modifying in any manner
the rights of the holders of the Debentures; provided, however,
that no such supplemental indenture shall without the consent of the holders of
each Debenture then outstanding and affected thereby (i) change the fixed
maturity of any Debenture, or reduce the principal amount thereof or any
premium thereon, or reduce the rate or extend the time of payment of interest
thereon, or reduce any amount payable on redemption thereof or make the
principal thereof or any interest or premium thereon payable in any coin or
currency other than that provided in the Debentures, or impair or affect the
right of any Securityholder to institute suit for payment thereof or impair the
right of repayment, if any, at the option of the holder, or (ii) reduce
the aforesaid percentage of Debentures the holders of which are required to
consent to any such supplemental indenture.


 


The Indenture also contains provisions permitting the
holders of a majority in aggregate principal amount of the Debentures at the
time outstanding on behalf of the holders of all of the Debentures to waive (or
modify any previously granted waiver of) any past default or Event of Default,
and its consequences, except a default (a) in the payment of principal of,
premium, if any, or interest on any of the Debentures, (b) in respect of
covenants or provisions hereof or of the Indenture which cannot be modified or
amended without the consent of the holder of each Debenture affected, or (c) in
respect of the covenants contained in Section 3.9 of the Indenture; provided,
however, that if the Debentures are held by the Trust or a trustee of
such trust, such waiver or modification to such waiver shall not be effective
until the holders of a majority in Liquidation Amount of Trust Securities of
the Trust shall have consented to such waiver or modification to such waiver, provided,
further, that if the consent of the holder of each outstanding Debenture
is required, such waiver shall not be effective until each holder of the Trust
Securities of the Trust shall have consented to such waiver.  Upon any such waiver, the default covered
thereby shall be deemed to be cured for all purposes of the Indenture and the
Company, the Trustee and the holders of the Debentures shall be restored to
their former positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other default or Event of Default or impair
any right consequent thereon.  Whenever
any default or Event of Default hereunder shall have been waived as permitted
by the Indenture, said default or Event of Default shall for all purposes of
the Debentures and the Indenture be deemed to have been cured and to be not
continuing.


 


No reference herein to the Indenture and no provision
of this Debenture or of the Indenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest, including Additional Interest, on this Debenture
at the time and place and at the rate and in the money herein prescribed.


 


The Company has agreed that if Debentures are
initially issued to the Trust or a trustee of such Trust in connection with the
issuance of Trust Securities by the Trust (regardless of whether Debentures
continue to be held by such Trust) and (i) there shall have occurred and
be continuing an Event of Default, (ii) the Company shall be in default
with respect to its payment of any obligations under the Capital Securities
Guarantee, or (iii) the Company shall have given notice of its election to
defer payments of interest on the Debentures by extending the interest payment
period as provided herein and such Extension Period, or any extension thereof,
shall be continuing, then the Company shall not, and shall not allow any
Affiliate of the Company to, (x) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company’s capital stock or its Affiliates’ capital
stock (other than payments of dividends or distributions to the Company) or
make any guarantee payments with respect to the foregoing or (y) make any
payment of principal of or interest or premium, if any, on or repay, repurchase
or redeem any debt securities of the Company or any Affiliate that rank pari passu in all respects with or junior in interest to the
Debentures (other than, with respect to clauses (x) and (y) above,  (1) repurchases, redemptions or other
acquisitions of shares of capital stock of the Company in connection with any
employment contract, benefit plan or other similar arrangement with or for the
benefit of one or more employees, officers, directors or consultants, in
connection with a dividend reinvestment or stockholder stock purchase


 


B-6





















 


plan or in connection with the issuance of capital stock of the Company
(or securities convertible into or exercisable for such capital stock) as
consideration in an acquisition transaction entered into prior to the
applicable Extension Period, if any, (2) as a result of any exchange or
conversion of any class or series of the Company’s capital stock (or any
capital stock of a subsidiary of the Company) for any class or series of the
Company’s capital stock or of any class or series of the Company’s indebtedness
for any class or series of the Company’s capital stock, (3) the purchase
of fractional interests in shares of the Company’s capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged, (4) any declaration of a dividend in
connection with any stockholders’ rights plan, or the issuance of rights, stock
or other property under any stockholders’ rights plan, or the redemption or
repurchase of rights pursuant thereto, (5) any dividend in the form of
stock, warrants, options or other rights where the dividend stock or the stock
issuable upon exercise of such warrants, options or other rights is the same
stock as that on which the dividend is being paid or ranks pari passu
with or junior to such stock and any cash payments in lieu of fractional shares
issued in connection therewith, or (6) payments under the Capital
Securities Guarantee).


 


The Debentures are issuable only in registered,
certificated form without coupons and in minimum denominations of $100,000.00
and any multiple of $1,000.00 in excess thereof.  As provided in the Indenture and subject to
the transfer restrictions and limitations as may be contained herein and
therein from time to time, this Debenture is transferable by the holder hereof
on the Debenture Register of the Company. 
Upon due presentment for registration of transfer of any Debenture at
the Principal Office of the Trustee or at any office or agency of the Company
maintained for such purpose as provided in Section 3.2 of the Indenture,
the Company shall execute, the Company or the Trustee shall register and the Trustee
or the Authenticating Agent shall authenticate and make available for delivery
in the name of the transferee or transferees a new Debenture for a like
aggregate principal amount.  All
Debentures presented for registration of transfer or for exchange or payment
shall (if so required by the Company or the Trustee or the Authenticating
Agent) be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to, the Company and the Trustee or
the Authenticating Agent duly executed by the holder or his attorney duly
authorized in writing.  No service charge
shall be made for any exchange or registration of transfer of Debentures, but
the Company or the Trustee may require payment of a sum sufficient to cover any
tax, fee or other governmental charge that may be imposed in connection
therewith.


 


Prior to due presentment for registration of transfer
of any Debenture, the Company, the Trustee, any Authenticating Agent, any
paying agent, any transfer agent and any Debenture registrar may deem the
Person in whose name such Debenture shall be registered upon the Debenture
Register to be, and may treat him as, the absolute owner of such Debenture
(whether or not such Debenture shall be overdue) for the purpose of receiving
payment of or on account of the principal of, premium, if any, and interest on
such Debenture and for all other purposes; and neither the Company nor the
Trustee nor any Authenticating Agent nor any paying agent nor any transfer
agent nor any Debenture registrar shall be affected by any notice to the
contrary.  All such payments so made to
any holder for the time being or upon his order shall be valid, and, to the
extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for moneys payable upon any such Debenture.


 


No recourse for the payment of the principal of or
premium, if any, or interest on any Debenture, or for any claim based thereon
or otherwise in respect thereof, and no recourse under or upon any obligation,
covenant or agreement of the Company in the Indenture or in any supplemental
indenture, or in any such Debenture, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator,
stockholder, employee, officer or director, as such, past, present or future,
of the Company or of any successor Person of the Company, either directly or
through the Company or any successor Person of the Company, whether by virtue
of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of the Indenture and the issue of the
Debentures.


 


Capitalized terms used and not defined in this
Debenture shall have the meanings assigned in the Indenture dated as of the
date of original issuance of this Debenture between the Trustee and the
Company.


 


THE INDENTURE AND THE DEBENTURES SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO CONFLICT OF LAW PRINCIPLES THEREOF.


 


B-7





















 


EXHIBIT C


 


PLACEMENT
AGREEMENT


 


 


C-1