Amended and Restated Declaration of Trust of Sierra Statutory Trust II



 EXHIBIT 10.10 
  

  
 AMENDED AND RESTATED DECLARATION 
 OF TRUST 
  
 by and among 
  
 U.S. BANK NATIONAL ASSOCIATION, 
 as
Institutional Trustee, 
  
 SIERRA BANCORP, 

as Sponsor, 
  
 and 
  
 JAMES C. HOLLY AND KENNETH R. TAYLOR, 
 as Administrators, 
  
 Dated as of March 17, 2004 
  








 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page


	 ARTICLE I INTERPRETATION AND DEFINITIONS
	  	1
	 Section 1.1.
	  	 Definitions.
	  	1
		
	 ARTICLE II ORGANIZATION
	  	7
	 Section 2.1.
	  	 Name
	  	7
	 Section 2.2.
	  	 Office
	  	7
	 Section 2.3.
	  	 Purpose
	  	7
	 Section 2.4.
	  	 Authority
	  	7
	 Section 2.5.
	  	 Title to Property of the Trust
	  	7
	 Section 2.6.
	  	 Powers and Duties of the Institutional Trustee and the Administrators
	  	8
	 Section 2.7.
	  	 Prohibition of Actions by the Trust and the Institutional Trustee
	  	11
	 Section 2.8.
	  	 Powers and Duties of the Institutional Trustee
	  	12
	 Section 2.9.
	  	 Certain Duties and Responsibilities of the Institutional Trustee and Administrators
	  	13
	 Section 2.10.
	  	 Certain Rights of Institutional Trustee
	  	14
	 Section 2.11.
	  	 Execution of Documents
	  	16
	 Section 2.12.
	  	 Not Responsible for Recitals or Issuance of Securities
	  	16
	 Section 2.13.
	  	 Duration of Trust
	  	16
	 Section 2.14.
	  	 Mergers
	  	16
		
	 ARTICLE III SPONSOR
	  	18
	 Section 3.1.
	  	 Sponsor’s Purchase of Common Securities
	  	18
	 Section 3.2.
	  	 Responsibilities of the Sponsor
	  	18
	 Section 3.3.
	  	 Expenses
	  	18
	 Section 3.4.
	  	 Right to Proceed
	  	19
		
	 ARTICLE IV INSTITUTIONAL TRUSTEE AND ADMINISTRATORS
	  	19
	 Section 4.1.
	  	 Institutional Trustee; Eligibility
	  	19
	 Section 4.2.
	  	 Administrators
	  	20
	 Section 4.3.
	  	 Appointment, Removal and Resignation of Institutional Trustee and Administrators
	  	20
	 Section 4.4.
	  	 Institutional Trustee Vacancies
	  	21
	 Section 4.5.
	  	 Effect of Vacancies
	  	21
	 Section 4.6.
	  	 Meetings of the Institutional Trustee and the Administrators
	  	21
	 Section 4.7.
	  	 Delegation of Power
	  	22
	 Section 4.8.
	  	 Conversion, Consolidation or Succession to Business
	  	22
		
	 ARTICLE V DISTRIBUTIONS
	  	22
	 Section 5.1.
	  	 Distributions
	  	22
		
	 ARTICLE VI ISSUANCE OF SECURITIES
	  	22
	 Section 6.1.
	  	 General Provisions Regarding Securities
	  	22
	 Section 6.2.
	  	 Paying Agent, Transfer Agent and Registrar
	  	23
	 Section 6.3.
	  	 Form and Dating
	  	23
	 Section 6.4.
	  	 Mutilated, Destroyed, Lost or Stolen Certificates
	  	24
	 Section 6.5.
	  	 Temporary Securities
	  	24
	 Section 6.6.
	  	 Cancellation
	  	24

  

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	 Section 6.7.
	  	 Rights of Holders; Waivers of Past Defaults
	  	24
		
	 ARTICLE VII DISSOLUTION AND TERMINATION OF TRUST
	  	26
	 Section 7.1.
	  	 Dissolution and Termination of Trust
	  	26
		
	 ARTICLE VIII TRANSFER OF INTERESTS
	  	27
	 Section 8.1.
	  	 General
	  	27
	 Section 8.2.
	  	 Transfer Procedures and Restrictions
	  	28
	 Section 8.3.
	  	 Deemed Security Holders
	  	29
		
	 ARTICLE IX LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, INSTITUTIONAL TRUSTEE OR OTHERS
	  	30
	 Section 9.1.
	  	 Liability
	  	30
	 Section 9.2.
	  	 Exculpation
	  	30
	 Section 9.3.
	  	 Fiduciary Duty
	  	31
	 Section 9.4.
	  	 Indemnification
	  	31
	 Section 9.5.
	  	 Outside Businesses
	  	33
	 Section 9.6.
	  	 Compensation; Fee
	  	33
		
	 ARTICLE X ACCOUNTING
	  	34
	 Section 10.1.
	  	 Fiscal Year
	  	34
	 Section 10.2.
	  	 Certain Accounting Matters
	  	34
	 Section 10.3.
	  	 Banking
	  	34
	 Section 10.4.
	  	 Withholding
	  	34
		
	 ARTICLE XI AMENDMENTS AND MEETINGS
	  	35
	 Section 11.1.
	  	 Amendments
	  	35
	 Section 11.2.
	  	 Meetings of the Holders of Securities; Action by Written Consent
	  	36
		
	 ARTICLE XII REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
	  	37
	 Section 12.1.
	  	 Representations and Warranties of Institutional Trustee
	  	37
		
	 ARTICLE XIII MISCELLANEOUS
	  	38
	 Section 13.1.
	  	 Notices
	  	38
	 Section 13.2.
	  	 Governing Law
	  	39
	 Section 13.3.
	  	 Intention of the Parties
	  	39
	 Section 13.4.
	  	 Headings
	  	39
	 Section 13.5.
	  	 Successors and Assigns
	  	39
	 Section 13.6.
	  	 Partial Enforceability
	  	39
	 Section 13.7.
	  	 Counterparts
	  	39

  

			
	 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

  

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 AMENDED AND RESTATED 
  
 DECLARATION OF TRUST 
  
 OF 
  
 SIERRA STATUTORY TRUST II 
  
 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 Sierra Statutory Trust II (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 
  
 (e) a reference to
the singular includes the plural and vice versa. 
  

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 “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 James C. Holly and Kenneth R. Taylor, 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. 
  
 “Common Security Certificate” means a definitive Certificate in fully registered form representing a Common Security substantially in the
form of Exhibit A-2. 
  

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 “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 Sierra 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 3.86%, 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. 
  
 “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. 
  

 4 








 “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. 
  
 “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. 
  

 5 








 “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
Sierra 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. 
  
 “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. 
  

 6 








 “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 “Sierra Statutory
Trust II,” 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 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. 
  

 7 








 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 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 
  

 8 








 (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 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. 
  

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 (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 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. 
  

 10 








 (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 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. 
  

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 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 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 

  

 13 








 
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 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 

  

 14 








 
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 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 

  

 15 








 
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. 
  
 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 

  

 16 








 
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 
  
 (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; 
  

 17 








 (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 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 

  

 18 








 
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). 
  
 (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. 
  

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 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 James C. Holly and Kenneth R. Taylor. 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. 
  
 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 

  

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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 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 

  

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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 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. 
  
  

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 (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 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 

  

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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. 
  
 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 

  

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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. 
  
 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 

  

 25 








 
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; 
  
 (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. 
  

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 (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. 
  

(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. 
  
  

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 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 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. 
  

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 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. 
  
 (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 

  

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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 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. 
  
  

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 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 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. 
  

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 (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 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. 
  

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 (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. 
  
 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. 
  

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 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 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 

  

 34 








 
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. 
  
 (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. 
  

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 (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:

  
 (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 

  

 36 








 
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; 
  
 (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); 
  

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 (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): 
  
 Sierra Statutory Trust II 
 c/o Sierra Bancorp 
 86 North Main Street 
 Porterville, California 93258 
 Attention:
Kenneth R. Taylor 
 Telecopy: 559-782-4994 
  
 (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 
  
 (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): 
  
 Sierra
Bancorp 
 86 North Main Street 
 Porterville, California 93258 
 Attention: Kenneth R. Taylor 
 Telecopy: 559-782-4994 
  

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 (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.

  
 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 
  

 39 








 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

	
	 SIERRA BANCORP, as Sponsor

		
	By:	 	 /s/ Kenneth R. Taylor

	 	 	

	 	 	 Name: Kenneth R. Taylor
 Title: Chief Financial Officer

	
	 SIERRA STATUTORY TRUST II

		
	By:	 	 /s/ James C. Holly

	 	 	

	 	 	 Administrator

		
	By:	 	 /s/ Kenneth R. Taylor

	 	 	

	 	 	 Administrator



  

 40 








 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) 15,000 Floating Rate Capital
Securities of Sierra Statutory Trust II (the “Trust”), with an aggregate stated liquidation amount with respect to the assets of the Trust of fifteen million dollars ($15,000,000.00) 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) 464 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 3.86% 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 2.75% (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; 
  

 I-4 








 (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. 
  

 I-5 








 “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%
		
	 March 2007
	  	101.050%
		
	 June 2007
	  	100.750%
		
	 September 2007
	  	100.450%
		
	 December 2007
	  	100.200%
		
	 March 2008 and thereafter
	  	100.000%

  

 I-6 








 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. 
  

 I-7 








 (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
	 	15,000 Capital Securities

  
 March 17, 2004

  
 Certificate Evidencing Floating Rate Capital Securities

  
 of 
  
 Sierra Statutory Trust II 
  
 (liquidation amount $1,000.00 per Capital Security) 
  
 Sierra Statutory Trust II, 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 James C. Holly and Kenneth R. Taylor, as Administrators, U.S. Bank National Association, as
Institutional Trustee, Sierra 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. 
  

			
	SIERRA STATUTORY TRUST II
		
	 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 3.86% 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 2.75% (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 .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)). 
  

 A-1-5 








 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 assignee’s social security or tax identification number)                    
                                        
                                        
                              
  
                                       
                                        
                                        
                                        
                                        
                                        
           
  
                                       
                                        
                                        
                                        
                                        
                                        
           
  
 (Insert address and zip code of assignee) and irrevocably appoints 
  
                                       
                                        
                                        
                                        
                                        
                                        
           
  
 agent to transfer this Capital Security Certificate on the books of the Trust. The agent may substitute another to act for him or her. 
  
 Date:_______________________ 
  
 Signature:___________________ 
  
 (Sign exactly as your name appears on the other side of this Capital Security Certificate) 
  
 Signature Guarantee: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	  	464 Common Securities

  
 March 17, 2004

  
 Certificate Evidencing Floating Rate Common Securities

  
 of 
  
 Sierra Statutory Trust II 
  
 Sierra Statutory Trust II, a statutory trust created under the laws of the
State of Connecticut (the “Trust”), hereby certifies that Sierra 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 James C. Holly and Kenneth R. Taylor, as Administrators, U.S. Bank National Association, as Institutional Trustee, Sierra
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. 
  

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

			
	SIERRA STATUTORY TRUST II
		
	 By:
	 	 
	 	 	

	 	 	 Name:

	 	 	 Title: Administrator



  

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 [FORM OF REVERSE OF COMMON SECURITY] 
  
 Distributions payable on each Common Security will be payable at an annual rate equal to 3.86% 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 2.75% (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 .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)). 
  

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 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. 
  

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 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 Guarantee2 
  

 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. 
  

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